Self-checkout stores like Amazon Go and Walmart Scan & Go are hyped as holding the promise to revolutionize in-store experiences. In fact, some believe that the self-service concept is positioning itself as the heir to the customer service and convenience throne. However, this begs the question: does self-service really facilitate the change in service that customers expect from today’s stores?
In 2017, Macy’s announced that it would bring its new self-service shoe concept to three Chicago-area stores, allowing customers to bypass the sales associate and just buy the shoes themselves. Macy’s is facilitating this initiative by bringing stock from the back room to the sales floor, giving customers quick access to the entire inventory. Along with offering self-service, Macy’s is also improving its merchandising and assortment strategies for shoes. Collectively, these initiatives have led to shoe sales increases that are “well above” that of regular stores. However, Macy’s and the media seem to boast about the self-service aspects rather than the tactics that improve in-store inventory, claiming that in-store shopping behavior has changed.
Looking at Macy’s process, self-service may not be the true reason why shoe sales are seeing a boost. One main driver is that shoes are on the sales floor rather than in a back room, and customers can try on more shoes in the same amount of time. Bringing the inventory onto the floor removed friction. It’s the act of removing this friction that is driving an improvement in sales, not whether the customer performs the service by themselves. Now imagine how effective every sales associate would be if they had quick access to all the store’s inventory. Service levels would increase and the sales process would improve.
Self-Service Can Be A Death Spiral
It can be very tempting for retailers to embrace a self-service model because it eliminates the need to reinvent store processes to meet the growing expectations of customers. With self-service, retailers don’t have to train associates, and associates don’t have to ask qualifying questions to customers.
Ultimately, this lack of service and engagement is how the ‘death spiral’ starts. Retailers might gain a temporary benefit from either higher sales or lower costs, but over the long term, it diminishes the brand and future sales. When retailers remove the associate from the in-store experience, they:
- Diminish the role of their store: Retailers cannot only focus on stocking products. In a world where any product can be instantly purchased from anywhere, simply having inventory position as a brand strength is not enough to keep a store relevant.
- Weaken the role of the associate: Moving to self-service will weaken the role of the associate, relegating them (in the eyes of the customer) to be simple stock keepers. With retail stores on the ropes, brick-and-mortar retailers must leverage their strengths — the associate is a differentiator and an advantage. Winning retailers understand this and are empowering their associates to be brand and service ambassadors.
- Reinforces a single, online channel: Why should customers go into the store when they can simply purchase online? After all, a store with boxes piled high doesn’t offer any unique value except for timeliness. Models from data scientists have shown that when investment in the store is reduced (and when the store closes), the lift in online sales is just temporary. Also, omnichannel shoppers are more valuable to retailers.
- Reduce revenue: Customers that are assisted buy twice as much as those who are not assisted by associates. When interacting with shoppers, store associates have the chance to build trust, find out what customers need and ultimately sell more products. Without customer engagement, the shopper will often only buy the product they came for, not realizing the store carries other items they need.
To Survive, Reimagine Store Operations
To succeed and stand out, retailers must embrace hands-on customer service in a way that ensures efficiency. Some steps that stores should take to improve operations include:
- Increase speed of service: Advanced communication technology allows associates to locate inventory exponentially faster. With more efficient communications, employees can pull and deliver a product from the stock room without the on-floor sales associate having to break engagement with the customer.
- Provide upsell and cross sell opportunities to the associate: Too often, stores are not thinking of the associate when it comes to personalization. Realistically, the store employee can best serve the exact needs of the customer because they’re able to communicate face-to-face and learn exactly what a shopper needs and expects from a store visit.
- Test and optimize, just like e-Commerce: One key feature of e-Commerce’s success is its ability to evaluate data to deduce best practices. To find what works best in stores, retailers need the capability to capture in-store data and A/B test new engagement techniques for associates and continuously optimize their processes. This is harder than turning to self-service, but it improves business operations, the customer experience, and creates an upward growth spiral.
- Enable the associate to be “on demand”: Customers who prefer self-service do so until they need help. Once they need assistance, they expect that help to be immediate and contextual. To provide this on-demand service, retailers should create mechanisms that allow the customer to identify when they need help, provide the associate tools to better understand what customers want, and train associates to spot when a customer is in need.
Self-service models are easy to mistake for high-convenience ones. It’s easy to stack boxes high, watch sales lift and then derive that the associate had no value in the shopping experience. But this simply isn’t the case. Associates are the backbone of a store’s competitive advantages. While it may require more resources than letting the customer do all the work, it’s much more productive in the long run to give employees the tools they need to deliver a more engaging and successful in-store experience.
As SVP of Marketing for Theatro, Adam Silverman is responsible for driving all aspects of marketing including sales enablement, product management, corporate communications and market strategy. Prior to Theatro, he has held e-Commerce and marketing leadership positions for top tier retailers such as Musician’s Friend, Target and Wet Seal. During that time, he led significant digital transformation projects including selection and integration of enterprise commerce applications, created award winning digital shopping experiences including the first social commerce application, and developed effective brand strategies. As Principal Analyst at Forrester, Silverman drove research and thought leadership of in-store technologies and strategies.