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The Perspective |
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Monday, 29 October 2007
Two financial institutions (FIs) sought to enhance customer service; one through self-service and the other through assisted-service. Both approaches enabled the FIs to reduce wait times for customers and free up staff time for higher value activities. For one credit union, it also saves space in compact in-store branches.
Self-service
BECU (formerly Boeing Employees’ Credit Union) in Seattle has moved to a self-service route. The largest credit union in Washington State with more than $7 billion in assets, BECU serves more than 500,000 members from 37 “tellerless” in-store branches.
These tellerless branches are half the size of a typical in-store branch, ranging from 350–400 square feet, yet fulfill all the functions of one. BECU has used self-service technology to allow it to fit more functionality into the smaller footprint it has available in many supermarkets.
Each tellerless branch consists of two workstations and an ATM, as well as a few Internet kiosks to demonstrate online banking, and a phone to reach the call center. The employees at these branches are consultants who cross-sell products, rather than tellers who process transactions. The consultants are available to service, educate and advise BECU’s members.
For example, if a member brings a deposit to the consultant, the consultant will teach the member how to use the ATM to make deposits. (If the customer doesn’t have an ATM card, the consultant drops the customer’s deposit into an “Express Box,” which is swept daily and processed in the back office.) If a member wants a balance transfer, the consultant escorts the member to the online banking kiosk, where the consultant teaches the member how to use online banking.
Consultants demonstrate the low-cost channels to members on a continuous basis, but do not directly handle transactions.
These branches represent what Celent believes to be one successful future path of in-store banking: They are designed to grow the customer base and then deepen relationships within that base.
Assisted service
First Citizens Bank in Raleigh, N.C., has 340 branches in North Carolina, Virginia, West Virginia, Tennessee and Maryland. The bank, with $16 billion in assets and 5,000 employees, has been piloting assisted service.
The new system provides an integrated assisted-service environment where customers use the ATM-like interface to “tee-up” their transaction. The teller completes the transaction by collecting the deposit or dispensing the cash. Typically, one teller alternates between two customer stations.
As part of the introduction to assisted-service, the bank created a concierge position within the branch to route customers to the appropriate area of the bank and explain assisted service. The concierge worked exclusively with assisted-service customers during the first 60 days of roll out at each branch. This was one key to the project’s success.
Initially, tellers and customers were concerned about teller job security. Customers had relationships with the tellers and did not want those tellers replaced by machines. Tellers were told that the technology helped reduce customer wait times and it allowed staff to migrate from transactional to service positions — all while maintaining First Citizens’ focus on customer service. As a result, customer feedback was positive.
Business results also were positive. Simple transactions were handled more quickly and staff was redeployed to higher value concierge positions. Now about one-fourth of all assisted-service-appropriate transactions are going through the assisted-service line. FCB’s goal is to drive this number to 60 percent.
The conclusion from both financial institutions is that self-service and assisted service can play a role at the branch. There are many ways to deploy assisted service, but to do it successfully requires people trained to assist the customers through this transition.
The author is a senior analyst for consulting firm Celent LLC's banking group and is based in the firm's San Francisco office.
Monday, 15 October 2007
We’ve all been there. Put a dollar bill in the acceptor, wait a second, then it spits it back out. Smooth out the corners, try another bill. Repeat process and hope the wind isn’t blowing or you’re chasing your buck down the street. Worst case scenario is that it doesn’t even attempt to take the dollar and you walk away without an Almond Joy.
It was actually the opposite kind of experience that instigated my investigation into bill acceptors. I was using a U-Scan system at a grocery store and paid in cash (which I almost never do anymore). I put the first bill in, waited for the regurgitation, but instead it smoothly took my cash and credited me for the transaction.
I was surprised, so later that night I bought a Coke from a vending machine and had similarly good experience, which begs the question: Why do some bill acceptors gladly accept my cash while others spit it back at me?
To get an inside look into the inner-workings of bill acceptors, I spoke with Alec Shekhar, Americas marketing manager at MEI. MEI has a large market share of bill acceptors in vending machines, self-checkouts, kiosks, retail safes and casino gaming machines.
The answer to the question is not complicated, Shekhar said. Vending machines have been around for 20-30 years and while a lot of machines have been updated or replaced, there still are machines out there with old technology in them.
“In the past, magnetic readers and bill recognition technology were not as robust,” Shekhar said. “New optical technology is being put into today’s bill acceptors that can better recognize worn or creased bills.”
Most people have put their money into a bill acceptor at some point, but may not understand the inter-workings. Customers begin by putting their bill into the slot, also known as the bezel, which triggers the acceptor to grab the bill.
A bill acceptor’s main purpose is to take currency, but also to validate it, and there are two available means for doing so. Once inside, an optical scan system verifies a bill by finding “identifiers” in the paper that are placed there by the mint during manufacturing.
A magnetic scan looks for magnetic signatures given off by the ink on the bill. If authenticated, the bill is deposited in a cash box or cassette located behind the acceptor. The whole process takes one to three seconds.
The aesthetics of bill acceptors have generally remained the same over the years; it is the authentication technology which caused our bill regurgitation in the past. Shekhar said recognition technology began greatly improving around 1995. Since then most of the old bill acceptors have been switched out.
There has been a shift in the market from magnetic to optical technology in the past 20 years. Shekhar said that MEI exclusively deals with optical scan technology because those acceptors never touch the bill, which prevents jams. Magnetic scanning systems are more apt to be fooled by counterfeit bills, even now. They also tend to easily reject bills that are worn.
Another reason why I’m having better customer experience with bill acceptors at self-checkouts is because the quality — and price point — of acceptors in those machines is higher. Quality-wise, there are several levels of bill acceptors. The top tier lines are used mostly in self-checkouts and casino gaming machines because of their reliability.
“Especially in a casino setting, the acceptors have to take the bill because if not, people just won’t gamble on that machine, likewise with self-checkout,” Shekhar said.
Vending machines, on the other hand, generally have lower-tier bill acceptors installed in them, which is one of the reasons we’ve struggled with them in the past. Also consider that many vending machines are outside and that rain, light and other environmental conditions have an effect on the performance of the bill acceptor.
An obvious, yet not immediately considered reason that self-checkout bill acceptors tend to outperform those of vending machines is because people generally use smaller denominations of money in vending machines. Singles and five dollar bills see more circulation and are usually more worn than say, twenties, which Shekhar says he sees a lot of in self-checkout cash boxes.
Lastly, consider the last time a bill acceptor wouldn’t take any of your bills. When I took a step back and thought about it, I realized it’s probably been several years. Shekhar said it’s like that with most people.
“People have long memories,” he said. "When it comes to bill acceptors, they’re seeing memories from the past.”
Monday, 08 October 2007
RoboTom’s, developed by the York, Pa.-based Shipley Stores LLC and opened in September 2001, is considered by many to be the first fully automated convenience store in the United States. Although it closed in 2004, the idea of an automated store lives on as convenience stores continue to examine how vending can minimize labor and real estate costs and maximize consumer satisfaction.
Shipley’s designed RoboTom’s sites to be a complete convenience experience with several vending machines offering convenience-store staples and hot food items such as pizza, while also providing unattended fueling.
How did Shipley’s come up with the idea of RoboTom? “We had a location that we really didn’t know what to do with at the time,” said Roger Fuller, Shipley’s store systems administrator.
“We got initial good reaction, but I don’t think the community was ready for that — to go to an unmanned convenience store and get their oil and milk out of the same machine, even though they never touched each other. We were a few years ahead of where our community was ready to be,” he said.
In another market, Shipley’s opened a second, scaled down RoboTom’s that enjoyed better customer reception. Still, the base wasn’t there and the company discontinued its operations.
But the story of vending doesn’t end there. In 2003, the National Association of Convenience Stores (NACS) profiled three more entrants into vending:
- Redbox, a small-footprint vending operation outside a handful of McDonald’s restaurants in the Washington, D.C., area featured dozens of convenience items and even DVD rentals. Its original format was, like RoboTom’s, discontinued in 2004, but redbox continues to evolve.
- In the United Kingdom, grocery chain J Sainsbury opened a fully automated, 130-SKU vending operation outside of one of its convenience stores. The vending option was intended for customers who wanted to shop in the wee hours, when the convenience store was closed. To Sainsbury’s surprise, it became popular with customers at all times, even when the convenience store was open.
- SmartMart, in Memphis, Tenn., opened in 2003 as the world’s first fully automated drive-thru convenience store where customers can select from 2,000 items via touchscreen. For age-restricted product sales, an interactive video system is used to verify the customer’s age.
And last year the vending story continued as NACS profiled Shop24, located on the campus of Morrisville College in upstate New York.
Shop24 is not a new concept — its units are installed in seven countries and have recorded more than 60 million consumer transactions in 160 locations throughout Europe. However, its U.S. debut was November 2005 at Morrisville College, where it offered students and employees 24-hour access to 200 items, from soda to milk to iPod download cards.
The reason for installing Shop24 was pure economics, said Glenn Gaslin, general manager of the Morrisville Auxiliary Corporation, which manages student services. For 15 years the school operated a convenience store with limited hours of operation, and its sales never covered its expenses. “We were losing money, and we weren’t providing the service I thought we should provide,” he said. “When we made a decision to install Shop24, we knew that the students would like this.”
By making Shop24 and all of the other vending machines capable of accepting student IDs for payment, sales rocketed. “They absolutely love it. Our sales increased 40 percent just by adding the card swipe on the machine. They don’t have to carry cash. All they need is their ID card. It’s the same card they use to get into their residence hall room and into a lot of the classrooms,” Gaslin said.
Shop24 also stocks sandwiches and students find them a convenient option at any hour.” They get the munchies at two in the morning. This is available to them. They come right down, put their card in, and they got a sub and off they go.”
“I don’t think it’s a 100-percent replacement for a convenience store, where you can go in and if you want to buy a coffee and set it up for the exact amount of sugar and cream that you want and shop around what you want for a snack,” Gaslin said. “But it will replace the 24-hour need — the convenience store that’s open 24 hours a day and does $10 in sales between midnight and five in the morning.”
“It’s just a convenience store that’s run by a computer and a robot.”
Shipley’s Fuller said, “[RoboTom’s] was a good concept. We learned that the customer was just not ready for that concept in the convenience store industry.”
But as more entrants have begun to evolve the concept, it appears that the customer is warming up to the idea.
Jeff Lenard is NACS vice president of communications and oversees media relations, communications and marketing on behalf of the convenience and petroleum retailing industry.
Tuesday, 02 October 2007
At the In-Store Marketing Expo in Chicago last week, I attended a session called “Measuring and Continuously Improving Digital Sign Network ROI.” The presenters were Brian Brooks and Kelly Canavan of 3M.
Brooks, with PhDs in cognitive psychology and neuroscience, has taken his knowledge of how the brain works and applied it to measuring the effectiveness of digital signage. To make his case, Brooks laid the groundwork by reporting on experiments that were done to measure what is going on at the brain level as it relates to branding.
In a blind taste test, consumers were asked to describe the Coke or Pepsi they were given versus a “generic” brand. What they discovered is that the taste testers thought that the Coke or Pepsi tasted better than the generic brand even though in fact the “generic” was really Coke or Pepsi. “Branding doesn’t just change our emotional experience, but literally our physical reaction,” he said.
Brooks and 3M claim to have developed a method, using “vision science technologies,” to engineer a physical environment to achieve the desired results. In other words, 3M says they can take what they’ve learned in the lab – with humans wearing special goggles detecting eye movement – and apply it to real environments without humans and goggles.
As an example, Brooks showed a picture of a typical big box store and with numbers, showed the first four places the eyes would look. In this case, to a static sign on a table, then on to other static signage. The next picture showed the same scene, only this time a digital sign was added. Since the digital sign had a brown color on the page, the eye traveled to other places first and the digital sign last. But once the color on the digital sign was changed to yellow, the eye went to the sign first.
As Brooks would explain the science, Canavan would interject or interpret how it was relevant to the business world. When we walk into a store, “it’s not that we’re trying to decide what to look at, we’re trying to decide what to ignore,” explained Canavan.
Canavan went on to present case studies of hotel and foodservice environments which benefited from the implementation of digital signage. In the first pilot, a hotel was looking to increase sales at its restaurants. Sales increased 15-35% per day when digital signage content was used to promote the restaurants.
In the second pilot, the objective was to drive foot traffic to a specific station in a corporate cafeteria. When that station and a particular product were featured on digital signs, 27.8% more consumers went to the desired station and sales of the featured product increased five times.
With these vision science principles and tools, 3M asserts you can determine the best sign location and creative content for those screens. By conducting experiments in the field and analyzing the data, Canavan contends, you can determine the cause-and-effect relationships and make methodical adjustments for improvement.
We all know there’s an art to effective marketing, but now there’s a little more science to it.
Tuesday, 02 October 2007
At the In-Store Marketing Expo in Chicago last week, I attended a session called “Measuring and Continuously Improving Digital Sign Network ROI.” The presenters were Brian Brooks and Kelly Canavan of 3M.
Brooks, with PhDs in cognitive psychology and neuroscience, has taken his knowledge of how the brain works and applied it to measuring the effectiveness of digital signage. To make his case, Brooks laid the groundwork by reporting on experiments that were done to measure what is going on at the brain level as it relates to branding.
In a blind taste test, consumers were asked to describe the Coke or Pepsi they were given versus a “generic” brand. What they discovered is that the taste testers thought that the Coke or Pepsi tasted better than the generic brand even though in fact the “generic” was really Coke or Pepsi. “Branding doesn’t just change our emotional experience, but literally our physical reaction,” he said.
Brooks and 3M claim to have developed a method, using “vision science technologies,” to engineer a physical environment to achieve the desired results. In other words, 3M says they can take what they’ve learned in the lab – with humans wearing special goggles detecting eye movement – and apply it to real environments without humans and goggles.
As an example, Brooks showed a picture of a typical big box store and with numbers, showed the first four places the eyes would look. In this case, to a static sign on a table, then on to other static signage. The next picture showed the same scene, only this time a digital sign was added. Since the digital sign had a brown color on the page, the eye traveled to other places first and the digital sign last. But once the color on the digital sign was changed to yellow, the eye went to the sign first.
As Brooks would explain the science, Canavan would interject or interpret how it was relevant to the business world. When we walk into a store, “it’s not that we’re trying to decide what to look at, we’re trying to decide what to ignore,” explained Canavan.
Canavan went on to present case studies of hotel and foodservice environments which benefited from the implementation of digital signage. In the first pilot, a hotel was looking to increase sales at its restaurants. Sales increased 15-35% per day when digital signage content was used to promote the restaurants.
In the second pilot, the objective was to drive foot traffic to a specific station in a corporate cafeteria. When that station and a particular product were featured on digital signs, 27.8% more consumers went to the desired station and sales of the featured product increased five times.
With these vision science principles and tools, 3M asserts you can determine the best sign location and creative content for those screens. By conducting experiments in the field and analyzing the data, Canavan contends, you can determine the cause-and-effect relationships and make methodical adjustments for improvement.
We all know there’s an art to effective marketing, but now there’s a little more science to it.
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