Self-Service Brick & Mortar Stores Leave Your Brand Vulnerable to the Competition

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Self-service brick & mortar stores don’t make sense. Removing the human component from the transaction results in just an exchange of goods and services for money, devoid of any connection. Customers want a human touch, even if they don’t know it.  Once it happens, the customer looks forward to a repeat performance. The associates make a difference and without them, you leave your customer vulnerable to the competition. Every company should think twice about self-service – it is rent being paid for no good reason.  Better to put more dollars into an e-commerce site and closing the physical locations.

The other day I was invited to a new retailing concept – a pop-up store filled with digital displays, iPad’s and various electronic shelving. If a customer wanted to know where a handbag was made, it could be picked up from the electronic shelf and all the detailed product information appeared. My host thought it was cool; I wasn’t impressed.  There were also digital displays where a customer could type in a question. I wanted ask, “Why aren’t there any sales people in the store?” but decided not to be rude.

We often hear the phrase, “I’m not sure what they were thinking.”  The “they” in this instance are retailers.  Retailers should learn lessons from e-commerce. Most e-commerce sites are completely devoid of person to person interaction.  A customer is viewing one company’s site, looking at a great sweater and in seconds a pop-up screen appears with a similar sweater for a lower price. The customer hits the pop-up and it takes you to yet to another business; a lost opportunity for either generating a first time or repeat customer.

Back to the physical store.  If you are going to have a physical store, fill it with associates who can create and build customer relationships. Associates who are properly trained and want to help and serve customers.  Research has shown that customers who are “repeat customers” spend significantly more the second time than the first and that makes logical sense. And I know from research that the biggest driver of a customer coming back, a repeat customer, is to have the same person who helped them the first time, help them again. That’s a connection and it’s not self-serve.

The check out in any store is important. Safe to say I’m not a big fan of self-service check-out stations since most of the time they don’t work well and it’s awkward to fill the small sized bags with big items and have the system register the price correctly. How many times do you have to get help with the key to reset the machine. Whenever there is a call for the key, you know that’s an extra 5 minute wait.  My local CVS replaced some of the cashiers with self-service stations.  My first thought – penny-wise and pound foolish. But, to my delight, most of the cashiers were placed in the aisles to help customers find what they were looking for. The other day, at least 3 people asked to help me and one went into the storage room to try and find an item I wanted. That was a good business decision; associates were not removed just repositioned to better serve customers.

In this climate of start-ups, global economies and big players as Amazon, your business is under attack every day. Making your brick & mortar stores devoid of human associates will quickly make it devoid of human customers.

What do you think?

8 COMMENTS

  1. Hi Richard: I sense from your post that if I’m considering opening a bricks-and-mortar retail outlet, my only path to revenue success is to employ people – lots of them – to engage with my customers. Otherwise, if I understand your point correctly, I’m better off building a website. “If you are going to have a physical store, fill it with associates who can create and build customer relationships.” – That may be an attainable goal, but it’s a very optimistic one. Employees, part-time, at minimum wage, times two or three shifts, weekends included . . . able to create and build customer relationships . . . OK – now things are starting to get challenging profit-wise, and I haven’t even signed the lease agreement.

    Of course, many employees have personal matters of their own to attend to, and they may not show up at the appointed time, or at all. So there must be overlap – or “fat” – built into my staffing model. More cost, more training, more forms to fill out and submit. If I staff too thinly, my team will up and quit in frustration. My customers will hate me. There are no easy answers, no magic potion. No wonder that in the digital era, we’ve all grown accustomed to performing more of the work that was formerly the domain of the Retail Associate. We pump our own gas, check out our own library books, read restaurant menus on our mobile devices and order meals – all without the “human touch” (an experience that I thoroughly enjoyed recently at the Houston, Texas airport).

    Some retail models are high-touch, and customers expect to engage with staff. Luxury hotels, fine dining, boutique men’s and women’s clothing come to mind. But alas, even luxury hotels are tinkering with having my plush, warm-from-the-drier robe and slippers delivered to my room via robot. Everyone’s seeking to cut costs, I guess. Still, for those industries, I generally agree with your point. People like to be served by people.

    Other retail models are doing quite well by paring back on the human touch. Both Amazon and Microsoft have already rolled out cashier-less bricks and mortar stores, and they are fine tuning the operations. These experiments were not a bust, as detractors had warned. Just as with Home Depot, WalMart, and other large volume retailers, they are depending on clear packaging, mobile computing, and ubiquity of consumer information to propel their skinnied-down staffing models, allowing customers to find products and make in-store buying decisions completely on their own. In and out, quickly! What’s not to like? Given the well-known difficulties with filling stores with associates pulling down salary and benefits, I’m looking for more customer self-service – or at least self-reliance – in retailing’s future. When I need ‘high touch’ in a bricks and mortar buying venue, I’ll head to a high-end men’s clothing store. First, I have to want to pay for the amenities. On second thought, I’d rather just save the money. By now, I’m pretty used to just digging through the rack of sale items and waiting in the long queue to get to the one cashier on duty. Self-service: I’ve gotten some fantastic bargains that way, and I keep going back.

  2. Discussion of the myriad and varied ramifications of Digital Transformation is, seemingly, everywhere (and unavoidable). I’m capitalizing the first letter of each word because the pervasiveness of digital transformation has all the feel of Big Data a few years ago and Reeingineering in the 1990’s. All things digital and innovative, especially mobile access and communication, is now consuming both attention and resources at many organizations. It is having most impact, and will likely continue to do so, in traditional bricks-and-mortar industries such as retailing and banking. From my perspective, service and other interface elements isn’t an ‘either-or’ proposition. It’s an ‘and’ proposition, where humans and technology combine to provide enhanced customer value.

  3. Hi Richard.
    Very good analysis on the self-service agenda of many brick & mortar stores. We find them at many Air ports as well. Removing the human touch from the stores require major culture change and it leaves the customer the choice for moving to a better service center where the customer is cared for. Managing customer preferences without the human touch is a real challenge. However, the new generation of customer may think differently as the exposure to new ways of operation in stores gets accepted more easily. Repeat customer visit may not happen as customer personal touch is missing at self-service points and no bargaining can happen.

  4. Hi Andrew, as always, thanks for your valuable comments and thoughtful insights. As you know, I frequently write blogs that demonstrate my passion for human relationships. I realize that there are always people who don’t seek out a relationship when looking for bargains or buying grocery items, but if they can find that special person at the end of a long queue that can ask them if they had a great day and give them a special smile, it can make their day…even better. When Ken Tindell, chief executive of the Container Store was asked how can he pay $50,000 a year to a retail associate, he responded, “one great person is worth three good people”. I think every business can learn by that. Lastly, although I live in Manhattan, my company’s headquarters are located in NJ. In New Jersey, the customer is not allowed to pump their own gas; it’s done by a service attendant. My choice is clear; I always get gas in NJ. It’s fast and sometimes they even wash by windows and say, “thank you Mr. Shapiro for stopping by, have a wonderful day”. When I call my bank, I want self-serve, when I go into a retail store, my desire, is to interact with a real person and not a machine. But everyone is different. Richard

  5. Michael, thanks so much for your comments. Technology is definitely here to stay, but companies need to ask the question, will the technology enhance or detract from the customer experience? If they are only looking for short-term gains; they will eventually experience long-term loss of customer loyalty. When I stand back and view self-servicing check-out lines from afar, I view that half of the time, customers get frustrated with the systems and need help. If we end up with stores filled with robots, I’m not sure how one store can ever lock-in loyalty. To me, the strongest loyalty bond is between two people; Rochelle at Macy’s, Jefferson at Starbucks, Iron at City Crab. I can never see myself trying to build a relationship with a robot no matter how cool the first encounter might be. Richard

  6. Hi Soodesh, thanks for your comment. When it comes to airport self-service check-out, I constantly see people giving-up and placing their intended purchases back on the shelves or just leaving them at the kiosk. Airports are a bit of an anomaly. Generally, depending on where you are flying, you may never go back to that specific i..e Hudson Store to purchase items based on the human touch. However, certainly it’s a reflection on the brand. I can guarantee that a well trained and customer friendly airport store associate can make valuable recommendations to customers as they check them out and most likely increase overall sales for the airport store. Richard

  7. More and more I learn to recognize and appreciate good customer service around a product. The knowledge and service experience gained by shopping at a great B&M store for example can be worth a lot. However I live in a digital age and cannot give up the temptation to price each B&M provided product out on the internet. If the customer experience is offered along with a competitive price the store has me. If not, it may go back to the shelf and I will give it further consideration at a later time. I have simply window shopped and bought online for a lower price. I am aware of the fact that this type of mentality is closing B&M stores across the U.S.A. Though over time I have been burned by bad CX using online retailers with the lowest price too. Even those like Amaz- seem to decrease their service over these recent years. To combat that I factor in the CX and what amount of money over the impersonal internet provider I am willing to pay. My observation of most others is to window shop and buy online at a lower price; maybe these folks have not encountered the range of good and bad I have. It is hard not to do this sometimes. I do not make this consideration at a physical store where there is no customer service. For example, everything I shop at Wal- or Tar- gets a price check. Is that wrong?

  8. Hi Don, thanks for your comment. Every customer and person is different. To reinforce what you are saying, it’s true that Best Buy turned themselves around by not only having excellent customer service but by matching the prices of Amazon. There is no reason to purchase a TV from Amazon if you can actually get recommendations from an educated sales associate and also know you are getting the lowest price too. However, if it’s not an electronic product and it’s a men’s suit…. I would much rather pay more for advice from an experienced sales associate. Anyway, the customer is never wrong; just everyone is different. Richard

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