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Retail Industry Updates

Why Self-Service Retail Will Continue to Grow in Popularity

(iStock/Tero Vesalainen)

Retail self-service is far from a new concept.

In fact, it dates back to 1833 with the invention of the coin-operated vending machine. Skipping ahead a bit, 1969 ushered in the first ATM in the United States, and 1992 brought in the first supermarket self-checkout. Self-service retail kiosks and other in-store digital experiences have clearly been around for decades. It’s just that the technology has changed — and the pandemic has accelerated its adoption among retailers.

Visit a local restaurant, for instance, and chances are good that you’ll be ordering via a microsite. Many retailers are doing the same thing, positioning QR codes next to displays. All it takes is a scan from a smartphone, and consumers are transported to an immersive digital experience filled with product details and contactless shopping options. And with consumer appetite growing for mobile ordering, stores are now dedicating space for hand-off stations to minimize bottlenecks and in-store congestion.

More Than Simply a Great Retail Experience

Contactless shopping and self-service retail kiosks seem to be the answer for how to enhance the customer experience in retail at first glance, most notably for digital natives who’ve been redefining engagement for years now. Oftentimes, however, it’s more about operational efficiencies and labor cost.

That was the ultimate goal for Panera Bread when it rolled out interactive retail kiosks. Instead of ordering from cashiers, customers can now select and pay for menu items on a tablet at the front of the store. That innovation massively increased the throughput of the chain’s kitchens, freeing up labor for order fulfillment and allowing for greater efficiency in the dining experience that increased food sales.

McDonald’s is moving in a similar direction: The fast-food chain also has self-service retail kiosks in every store, with some locations offering this as the only ordering option. Some stores also use geolocating devices to bring food directly to tables. Again, operational efficiencies like these can reduce the number of employees needed per shift or allocate them to other areas.

Enhancing Customer Experience with Contactless Shopping

Investing in and integrating contactless shopping options into stores shouldn’t be done too quickly. Retailers must take the time to understand where such technology makes the most sense to deliver the best in-store digital experience. The following are often the best places to start:

1. Use customer data to determine self-service opportunities. Capture enough data, and patterns begin to emerge — particularly around how consumers would like to interact with your brand. This provides the opportunity to determine where exactly you can use self-service retail touchpoints within the shopping experience to shift labor and increase operational efficiencies. In fact, 76% of businesses report data being critical to organizational performance.

Take the deli counter. It’s one of the most labor-intensive departments at grocery stores, and during peak hours, you often need more than one person on the floor. But a number of grocers use shopper data to predict what customers will want at certain times of the day, offering presliced meats and prepackaged salads to grab on the go. This self-service retail option takes a person out of prep to be redeployed elsewhere in the store.

2. Find a balance between technology and human touchpoints. As you work through the in-store digital experience, it’s important to ask yourself two questions: What’s essential to the immediate transaction? What’s essential to the ongoing customer relationship? Your answers will help you decide how to best balance the transactional with the relational in customer experience.

No matter the type of self-service technology, it’ll never replace the social (and often economic) value of human interaction — especially with customer care. Take chatbots, for example. After a few preliminary questions, 70% of people would rather speak to a human representative. The reason? Trust. Nearly half of consumers who prefer human reps aren’t confident such technology will understand them.

3. Find a noncompetitive peer to help build your ideas. Remember: If you want to go fast, go by yourself. But if you want to go far, go together.

Most smaller retailers work with limited resources, making it difficult to implement contactless shopping solutions while also offering personalized in-store experiences that can compete with the likes of Walmart or Target. But when you build an ecosystem of retail partners, it’s much easier to brainstorm ideas for proof of concept to balance customer relationships with the best in-store digital experiences. You can also identify how you’re going to retrain customers with this new operational approach.

With any new technology, it can take time to arrive at the right self-service retail solution for your store. What works for one retailer won’t necessarily work for all. But if you rely on the data and never lose sight of that human element, you can rest assured that you’re moving in the right direction.

Scott T. Reese is a passionate leader, a “what’s next” enthusiast, and an arbiter of progress — with the detail-oriented, get-it-done attitude needed to make sure those big ideas are actually accomplished. He currently serves as chief technology officer at Harbor Retail, a Grand Haven, Mich.-based firm that helps retailers solve challenges through integrating strategic research, innovative retail design, smarter tech, custom manufacturing at scale and all forms of logistics.