|| The Perspective
Monday, 26 February 2007
The complete version of this article will be published in the April issue of Self-Service World Magazine.
Click here to download a complete PDF chart of Alex's steps.
After two decades of experience as a kiosk vendor to dozens of worldwide retailers and brands, I switched roles. In 2005 I formed Selling Machine Partners, a company that partners with retailers to develop cross-channel strategies, vendor RFPs and project implementations, and, in doing so, I went from being a vendor to being a client.
In this new role I’ve rapidly come to the humbling realization that many of my prior assumptions about customer expectations were misguided and internally focused. And I see many of my talented vendor colleagues in the industry mirroring my mistakes and losing business to savvier, more customer-focused competitors.
Emerging technology decision making at large firms is governed by natural selection, a process that many kiosk providers understand but haven’t mastered.
Here are a few tips to better help your clients:
1. Know the client’s business. As a client, we expect our vendors to be in synch with our company goals, industry background, key management names and competitors. I’m amazed how often I have to prod prospective vendors to turn off their computers, get out of the office and visit our stores to gain a sense of the brand and how our customers interact with store associates.
2. Listen carefully and offer specific suggestions. As a client, when I explain our company’s problem and goals to a vendor, I don’t want a PDF catalog or URL with links to dozens of products in response. I want a few strong recommendations on how to solve my particular problem. I don’t have the expertise or the time to sort through product specifications.
Clients value strong problem-solving skills in their prospective vendors. My clients are numbed by too many long power points that never focus on a specific solution for our situation
3. Provide real information. My vendor heroes are seasoned technology project managers and pre-sales engineers who are authentic, brilliant, great listeners and can stick with the engagement after it is sold. As a marketing guy, I know we need the “sales” team on sales calls, but their job should be to manage the process (and get the coffee/bagels) and keep quiet during the meetings.
Today, clients don’t need or want to be entertained by five-star restaurants or elaborate office décor. Clients want to beat their competitors and enhance customer experience by procuring great, innovative products and services at reasonable prices.
Monday, 19 February 2007
Lord knows the kind of self-service some JetBlue and Delta passengers were contemplating recently.
The winter storm that walloped the northeast in February grounded hundreds of planes, but the snow arrived so quickly that many flights were cancelled between leaving the gate and reaching the end of the runway. Some jets even froze to the pavement, trapping hordes of unlucky travelers on the tarmac for 10 or more hours.
Chainsaw? Blowtorch? After more than 10 minutes at the gate, I’m ready to begin clawing my way out of an airplane, and if the claw is at the end of a hammer, so be it. Things begin to smell on a grounded airplane. The crying of children becomes more determined. The panting for nicotine from deprived smokers becomes more desperate.
Travel horror stories are as common as, well, travel horror stories. Even I tell them, but when I do, it’s to fit in with grumpy road-warriors, to mask the fact that I still love to travel. The cool travelers, it seems, do nothing but gripe about it. Me, flying to London on business makes me a big shot. Most of my family is so rural, they’re more likely to suffer from tractor lag.
One aspect of travel you don’t hear so many complaints about these days is check-in. Self-Service World has covered it a great deal where it intersects with kiosk technology, and regular readers of this magazine and its online counterpart, SelfServiceWorld.com, know we celebrate self-service airline applications as a pioneer for the whole industry. In fact, only the ATM exceeds them in terms of helping usher in a new era in customer-facing technology and the public’s willingness to use it.
After 9/11, the airlines were faced with tremendous economic challenges. Bookings were down significantly, and the cost of new security measures was enormous. Necessity, the craggy mother of all inventions, foisted upon the industry a voracious search for relief. Self-service significantly sated the appetite.
The remedy was so effective, it has helped lift the entire industry, and promises to keep airlines at the leading edge of the business-to-consumer intersection.
James Bickers, Self-Service World editor, wrote this just a few months ago in an online column:
For British Airways, self-service has been an unqualified success.
British trade publication Computing is reporting that BA saw 80 percent of its traffic go through self-service check-in. A company representative said that’s well ahead of the company’s schedule, as is the move to paperless ticketing, which is now at 90-percent customer-adoption rate.
Good news regarding airlines and self-service has been coming fast and furious in recent weeks; just a few short days ago, Air Canada announced that it was saving some major money through the use of self-service. (The company said it spends 16 cents to check in a traveler through a kiosk, versus $3 through a staffed counter.) And a recent report by SITA stated that the airline industry’s move toward self-service is saving it billions of dollars.
Another aspect of the SITA survey predicted that aviation will become the world’s first totally Internet-protocol-enabled industry.
"This year’s Airline IT Trends survey provides the clearest evidence yet that the airlines will be the world’s first fully Web-enabled industry," Paul Coby, SITA chairman, said in a release. "IP is the underlying communication technology that enables many new applications, such as online reservation systems, so it has brought a radical change to air travel, ever since SITA developed the first Internet booking engine just over 10 years ago. It is also driving the self-service business model, which is both convenient for passengers and helps airlines keep ticket prices down."
Bickers ended his piece with a question that becomes more relevant every day, and the silence meeting it becomes resoundingly loud: When will other industries, such as foodservice, step up with more self-service? The airlines have proved three things: Customers use it. Self-service saves the deployer money. And sometimes it takes a financial disaster to get a business off its keister. Let’s hope that when it comes to other consumer-driven businesses, it doesn’t take the third to reveal for them the first and second.
Wednesday, 14 February 2007
Recently Ric Kahn, a columnist for The Boston Globe, published a piece about his experiences with the self-service world. He spent a few days trying out all kinds of vending kiosks, self-checkout machines and even self-service massage chairs. At the end of his excursion, based on the reactions of people he talked to, he indicated that the rise of self-service will result in a future where machines will replace humans in blue-collar jobs.
Read the Boston Globe article here.
I disagree with this outlook, and here’s why.
Self-service is not a new concept. One of the first self-service applications, the ATM, has been around since the late ’60s, and branches or tellers have not disappeared as a result. Kahn predicts that banking jobs will decrease over the next few years. But as Tracy Kitten, editor of ATM Marketplace, a site dedicated to the global ATM market, points out, the world has actually seen a renewed interest in brick-and-mortar branches, where self-service can complement teller functions, not replace them.
“In the ’90s there was a buzz about multifunction ATMs that would replace branches,” Kitten said. “Those so-called ‘branches in a box’ were going to help financial institutions cut costs and reach more consumers.”
The reality has been quite different. What the industry has learned is that we cannot cut out the human element. Consumers still want the brick-and-mortar experience but also expect fast access to their cash, hence the still-growing popularity of the ATM. We now see other self-service devices and functions playing roles within the branch itself — allowing FIs to automate certain processes so that tellers and other branch staff can devote more time to building relationships with their customers and members.
Self-service machines do something that humans cannot or don’t want to do: provide services 24/7. At times, they can also cut costs for the customer. Not many people complain about having to pump their own gas, mainly because it has become a money and time saver. One swipe of a card, no waiting for attendants, in and out. A woman mentioned in Kahn’s column said she supported the idea of self-service pumps, but refused to use the self-checkout at the supermarket because it’s “just not right.” An interesting rationale, considering pay-at-the-pump and self-checkout are the exact same concept.
Kahn elaborates on the supermarket self-checkout aversion by mentioning retail RFID, which will allow customers to automatically purchase items on their way out the door. A sensor reads the tags on the products and automatically charges the debit card that is in the shopper’s wallet. Kahn fears that this will eliminate barcodes and the employees that scan them.
The truth is that RFID is essentially the same process as self-checkout, only more convenient and time-saving for the customer. Instead of cutting checkout jobs, stores are redeploying their employees into more customer-service roles. My local Kroger store just opened a Starbucks outlet, where the baristas can also be seen working in other parts of the store. The Home Depot recently ousted their CEO because sales plummeted after an implementation of self-service kiosks and a lay-off of employees. A wiser maneuver would have been to redistribute those workers throughout the store to increase conversion and use human interaction to sell more items.
Realistically, the self-service industry is benefiting the very people that Kahn is trying to protect. Self-service is speeding up commerce, allowing more money to be moved and at the same time improving the quality of service.
The fear of futurists is that self-service will lead to a cold society where humans no longer interact with each other and commerce is entirely run by machines. Sound familiar? Orwell wrote about it in 1984. Kubrick depicted it in 2001: A Space Odyssey. Luckily for us, futurists are often wrong. It is 2007, and the bleak dystopia of a machine-run world has yet to come. Faster and more convenient shopping? Now that future is here.
Tuesday, 06 February 2007
Since March, I’ve been hitting the road, taking one week a month to visit companies in the self-service and kiosk industry. During those trips, I’ve had the opportunity to visit a few companies engaged in the DVD-rental kiosk business. As someone who is a big fan of movies, but not a big fan of going to the video store, I get very excited about DVD kiosks. I’ve just been waiting for a DVD kiosk to be installed near me.
The wait is now over. My local Albertsons in Texas now has a redbox unit. I was about to take a road trip with my wife and kids to visit her family in St. Louis, so I thought I’d stock up on some movies for the car. Since you can return the videos to any redbox nationwide and there’s a redbox in the McDonald’s near my in-laws’ house, returning them was a snap. Cost for two-day rental of three movies after $1 first-timer discount: $5. Cost of my sanity on a 12-hour drive with three kids: Priceless.
Redbox now has deployed more than 1,700 units throughout the United States. In addition to locations in McDonald’s and Albertsons, they’re also testing them at Walgreens and Wal-Mart. DVD kiosks are popping up everywhere, from KOA Kampgrounds to the Tokyo underground. They’re perfect for apartment complexes, university campuses and convenience stores.
According to Video Business Online, redbox has doubled in size over the past 12 months, and the company hopes to be in more than 20,000 locations worldwide within five years. You know how many McDonald’s and Wal-Marts there are out there; this thing could be huge. DVDPlay, one of redbox’s competitors, rented its five millionth movie in June.
There are a lot of companies getting into the mix. In addition to redbox and DVDPlay, I’m aware of at least 23 others vying for a piece of the $25 billion dollar video market. The kiosks range in size from two feet square with 75 DVDs to about the size of a soft drink vending machine holding up to 1,000 DVDs.
To entice people to try the kiosks, several vendors are offering discounts and free first-time rentals. Vendors also are offering online reservations to ensure the title you are seeking will be there when you visit the kiosk.
You might be wondering how will digital downloads impact the market. First, let’s look at the downloading-at-home market. While the iPod and its online store, iTunes, have revolutionized the music industry, speed and quality are two deterrents to full-length movie downloads. Plus, most people don’t want to watch a movie on a 2.5-inch screen.
Microsoft recently launched a movie download service for the Xbox 360, though users have reported many problems with the service. Downloading a movie can take an hour and a half or more depending on your Internet connection. Most people are too impatient to wait that long.
Once the legal hurdles are overcome, you could see on-demand DVD burning kiosks on the rise, increasing their potential catalog of movies 10 fold.
For now, the holy grail could be a combination of instant gratification from a DVD vending kiosk and the convenience of returning movies by mail a la Netflix. It will be interesting to see how this all plays out.