Retail

Diebold Nixdorf On Rewriting The Retail Experience With Self-Service

Self-service technology is not exactly a new feature of commerce — consumers have seen variations of it in supermarkets for the better part of a decade, scan-and-go versions of it piloted by Amazon, and kiosks in QSRs for ordering and checkout. The definition of self-service has evolved, too, to include order-ahead features for mobile apps in retail settings as diverse as QSR, grocery and retail.

But, as Diebold Nixdorf’s VP of retail strategy, Arvin Jawa, told PYMNTS CEO Karen Webster for this week’s edition of Under the Hood, it’s only more recently that self-service technology has streamlined the checkout process for both consumers and retailers. Some of the early installations were — by everyone’s account — a little buggy.

For instance, Jawa noted that a self-service grocery checkout service might work just great until the consumer has an item that doesn’t scan properly, or needs to have his ID verified to purchase alcohol or can’t get the produce scale to work as it should.

Online order-ahead is brilliant in concept, but it was less brilliant in practice in the early days, when consumers would find they picked up their orders cold, or that they had to wait in line just as long to pick up their order as they would have if they’d just ordered in the store.

“The reality,” Jawa told Webster, “is that instead of adding convenience and fighting friction, these early passes at self-service were actually adding to it in some cases. And the problem in many of these early iterations was that the technology was leading instead of the retailers. It was sort of the hammer in search of the nail.”

But that, he noted, is changing — and quickly, these days, as retailers are rethinking their relationships with self-service tech. The point, he said, isn’t to start with the technology and then try to find a problem to apply the tech to; the point is to explore the journey consumers are already on when they visit that retailer, identify the points of friction, then apply the right technology to improve that customer journey. Importantly, Jawa said, self-service isn’t simply about letting consumers do more things themselves, but using technology to streamline their retail ordering experience.

Thinking through that process has its rewards: a recent PYMNTS study of 2,000 consumers reports that 80 percent of consumers really like self-service, and nearly a quarter of consumers said they would shop at stores more often if they had self-service checkout or offered order ahead options.

Resetting Retail’s View of Self-Service

By the numbers, retailer adoption of self-service technology has been somewhat limited to date. Deploying any new technology — particularly self-service technology — requires integration with legacy software platforms. Those integrations, Jawa noted, cost retailers time and money.

That’s changing, and so are the perspectives of retailers.

The legacy view of self-checkout is as an “ad hoc” add-on — a new touchpoint plopped on top of others already offered. That’s a hardware/tech first approach, Jawa noted, that defines self-service as simply giving consumers new touch points, when, instead, it’s about giving them new ways to customize their in-store journey.

“What we have found,” Jawa said, “is that when retailers shift their mindset to think of self-service as a business transformation, they really start to realize the real benefits and see that the case for deploying these solutions is actually pretty amazing.”

The pretty amazing stuff is measured in a retailer’s ability to optimize more of its physical store footprint, and redeploy its staff.

Instead of being forced to staff registers to keep traffic moving in the store, Jawa said that the right mix of manned and unmanned checkout stations means that staff are able to serve the customers who really want and need help, that in turn, improves customer engagement.

Self-service checkout, it turns out, has become a catalyst to personalizing the consumer’s experience with that merchant. From an app that provides options that consumers can tailor and “serve themselves” and order at their convenience, to freeing up staff in-store to help guide a consumer, self-service options avoid that one-size-fits-all experience of standing in line at the store, waiting to pay for the things they want to buy.

Bringing Consumers Along

With an 80 percent approval rating, guiding consumers through the self-service journey in the U.S. doesn’t sound like a heavy lift — it almost seems more like if the retailers build it, the consumers will come.

It’s not that simple, said Jawa, because consumers don’t just want a self-service experience — they, of course, want a good one. And because there’s no simple one-size-fits-all solution, what counts as a good experience will vary from retailer to retailer and customer base to customer base. Every consumer journey is different.

Customers, like the familiar Frank Sinatra song, want to do it their way — and will use self-service technology tailored to the journey at a particular retailer.

For example, he noted, McDonald’s developed its kiosk program with an eye toward expanding customer choice — so that once at the restaurant, consumers had more options than go to the counter or go to the drive-thru.  From there, he noted, it layered in things like table service or the ability to fully customize an order.

Starbucks, he added, is really in a league of its own when it comes to developing a whole new customer journey with mobile order ahead. It starts with a something as simple as a digital gift card to facilitate mobile payments, and then adding loyalty and mobile order-ahead, and then rewarding that order-ahead behavior with loyalty points to further cement the behavior.

But even simpler moves will work, Jawa said. Chick-fil-A wedded geofencing to its mobile order ahead platform so that restaurants could start prepping customers’ meals at just the right time to hand them a hot sandwich as they pull into the drive-thru.

There are even clever use cases for self-service outside of food, in apparel.

Rent the Runway, which operates five stores, recently put in a self-service option, triggered by observing its customer’s journey.

Store owners noticed that many of their clients came in early in the morning to drop off and pick up new outfits on their way to the gym so they had something to wear to work that day. The self-service experience makes it easy for those time-pressed consumers to get in and out without ever having to talk to an associate.

All this said — that full buy-in on the concept — will take time, as rethinking entire business operations and customer behavior patterns isn’t a snap of the fingers, overnight process. But, Jawa noted, as retailers continue to see the positive impact this is having on consumers globally,  it’s more a question of when, rather than if, self-service tech finds its way into the retail mix.

“Retailers need to convince themselves that they think it is good for their business, and once they’ve done that, they have to demonstrate the value to the consumer. Once we see that, I think the path really clears for this technology becoming a more powerful tool,” Jawa explained.

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