Self-Service in Retail Can Work, if You Do It Right

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In a time of shrinking payroll percents, self-service presents an enticing proposition. Unless a company develops and implements a successful self-service strategy, the allure invariably becomes victim of a heavy hit of reality. Self-service that is poorly executed will cost a company its customer base, erode top-line growth and deteriorate the brand.

Service level is as much of a critical strategy decision as is location, merchandise mix, operations and customer policies.

For a moment, put yourself in an aisle of a big-box retailer. Or a grocery super store. Or in an interminable line at the ticket kiosk at your neighborhood multiplex theater. How many times have you left without your intended purchase, wanted to kick a self-service register in the market, abandoned a shopping cart or wandered around in frustration looking for a warm body to provide assistance? The answer is probably at least once. In fact, many a book could be written about these experiences. Though companies miss the mark, there are the special few that get it.

Over the course of my 19 years of revenue improvement consulting, my company has had the opportunity to work with many financial services, retailers and vertical manufacturing companies. One of our founding clients, Pfaltzgraff, a legacy manufacturer of American stoneware and fine china, has some of the most effective self-service environments I have seen. Rather than group items by category (for example, table linens, glassware and kitchen tools, in opposite corners,) Pfaltzgraff makes the pattern the driver of customer experience. Each pattern treasured by Pfaltzgraff collectors (and there are thousands) is in its own boutique. Coordinated merchandise is grouped by pattern. No searching. No frustration. Merchandise grouped in this manner contributes heavily to add-on sales. Pfaltzgraff was an early adopter of lifestyle merchandising, a hallmark of many successful self-service businesses.

Target has a lock on graphics as an integral part of its self-service strategy. The company fills its enormous wall space with stunning images that direct customers to what they are searching for, without having to ask. Although stores cover vast amounts of square footage, the images serve to shorten the distance between the customers and their desired location in the store.

Our client, DSW Shoe Warehouse, before it was purchased by a large department store group relied on signage and merchandise organization to direct customers to the shoes and sizes they are searching for in their 30,000 square foot and larger store locations. The no-frills look of the stores, huge selection and product signage (or "shelf talkers," as they were originally called) added to the excitement of finding great merchandise at great prices.

What do these environments have in common? Over the years, we’ve developed some Guideposts for Self-Service Success. First, it’s important to realize that self-service is a type of service, rather than the absence of service. With that in mind:

  1. Create intuitive environments: Use merchandise placement, signage and floor layout in such a way that customers effortlessly can find what they are looking for, or in a service business, accomplish what they intended to do.
  2. Provide extensive product and/or service knowledge: Features, benefits, related merchandise, available sizes, colors, comparisons to other products and warranty information all serve to answer questions and reduce customer frustration.
  3. Make sure customers know what to do and where to go: Clearly signed customer service locations, merchandise pick-up, cashiering and live human assistance are key to reducing stress while positively influencing customer impression of the brand.
  4. Use technology in line with customer expectations: When faced with the choice of using automated services, a customer mulls over, "Can I get out of here faster? Will I get a better deal if I use the machine? Is it easy to use?" If customers are to use kiosks, and other self-service machines, the machines must be equal to, or better than, their perception of an interaction with a live human employee.
  5. Analyze the business from customers’ perspective: Experience the business wearing your customers’ shoes. At each critical contact point (which might include the parking lot, the front door, the initial entry into the business, searching for desired merchandise and paying for merchandise or services) analyze what is going right and what can possibly go wrong. Then fix it before it does.

We are evolving into a service based economy. Yet the numbers of service employees are shrinking as fast as the trend of reduced staffing budgets. A well-executed self-service mission can provide critical strategy support at a time when it is needed most in the marketplace.

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