Self-Service revolution.

Self-Service revolution.

It defeats the purpose when businesses heap work on their customers.

 Once upon a time shops used to keep all their goods behind the counter. When customers came to the shop, all they had to do was to tell the sales clerk what they wanted, and then wait while their purchases are bagged up. It is only then that they would hand over their money. All these changed in 1916 when Clarence Saunders, the father of modern retailing, opened his first Piggly Wiggly supermarket in Memphis, Tennessee.¹ Saunders changed the face of retailing when he introduced the idea of self-service, in which customers selected their own groceries from the shelves. They will then take their baskets or carts to a cashier on their way out. Saunders claimed that his idea would slay the demon of high prices by cutting labor costs.²

 
By 1932 the Piggly Wiggly store was the undisputed king of the retail industry, with 2,660 stores across United States. In the 1920s, Saunders did lost control of the company. However, that did not stop him from continuing to innovate and look for ways to perfect the fully automated shop. One of his innovations include the “shopping brain” – a feature that allows customers to choose items displayed under glass as well as keep a tally of their bills.³ As a business, Piggly Wiggly is no longer as popular as it used to be. As a matter of fact, it is now a shadow of its former self. As of three months ago, it has only about 600 stores in United States, and it operates only in 17 states.⁴ But their “self-service” idea, among others, has conquered the world.

You are on your own, folks

 The self-service revolution is still very popular on to this day. In many states, the CVS, a large American pharmacy chain, has replaced cashiers with self-service pay-points. Also a British grocery chain by name Waitrose, offers their customers what can be considered a modern-day version of Saunders’ shopping brain. In that regard their customers were given the choice to scan and tally their purchases. Another institutions that has almost perfected the self-service model are the banks. Most banks are cutting down their branches while, at the same time, making it ever easier for customers to do transactions online as well as via the ATM. Companies like Unilever and other consumer goods giants are seeking to convert some of their emerging market customers into freelance sales folk – a model pioneered in United States by such firms as Avon and Tupperware. Such customers who became their freelance sales people peddle Unilever’s products to friends and neighbors.⁵

 The travel  industry has also joined the elf-service club. And the industry is very ruthless when it comes to engineering its own employees out of its business. For instance, by using the apps in their smartphones, customers can now book their own trip. They no longer need the airline employees to print their boarding passes as they can do this in their houses before setting out. When the customers get to the airport, they are allowed to scan their boarding passes and passports at a machine. And in some airlines, customers can weigh and tag their own luggage. They can even haul it to the conveyor by themselves. In many hotels, a customer may not see any check-in staff or porters. A good example is the Omena Hotels – a Scandinavian hotel empire. This hotel sends PIN codes to its customers to enable them open their doors. Soon all the customer needs to do to get into their room at this hotel will be to simply wave the Apple Watch on their wrists.⁶

It is not an exaggeration to say that the variety of businesses touched by the self-service revolution is growing every year. Take Threadless,⁷ a group of clothes designers. This company invites customers to submit their own patterns, after which they are given the chance to vote on which ones should be produced. Threadless is just one of them: some technology companies now turn their smart customers into unpaid troubleshooters. They do this by encouraging these customers to participate in user forums where their insights can be used to solve other customers’ technical problems. Some newspapers, particularly the Huffington Post, encourage its readers to write as unpaid columnists. How about multinational companies like GE? The story is the same: GE is currently working towards creating a new business model. Under this model, GE will no longer need to keep a stock of spare parts for its jet engines. Instead, their customers will have the option of downloading digital designs of the parts on their computers. They can then make such parts on their own by means of a 3D printers.⁸

 There is no doubt that all these are wonderful for businesses. But does their customers feel the same way?  According to the available published evidence, these days many people are constantly being asked to do “unseen” jobs by everybody from Amazon to the Internal Revenue Service. No wonder many people constantly feel stressed and overworked. And because people these days spend so much time pressing buttons and speaking to machines rather than interacting with other people, they also feel so alienated sometimes.⁹

The above picture may look too gloomy, but they are not always the case. This is because the self-service revolution is not only about the companies. As a matter of fact, it is sometimes driven by customers’ preferences. For instance, there are lots of customers who finds it quicker to choose their own groceries than to wait for someone to do it for them. A lot of customers don’t like queuing at the check-in counter at the airport. Such customers usually prefer to print their boarding passes at home. Besides, customers can always fight back if they get frustrated about a company’s self-service model. For instance, many companies were forced to revert to having people answer the phone when customers complained about automated telephone services. Also many people now choose to have their shopping delivered to them, instead of driving to out-of-town, self-service supermarket.¹⁰

 The vital questions

The self-service revolution did raise two key concerns. First, self-service industries may claim that they have eliminated personal touch from their mass-market offerings. But they had continued to chase the wealthy and the well-heeled customers with extravagant, premium offerings. In other words, they had divided consumers into two classes: the poor consumers belong to the “cattle class” while the wealthy consumers are the “business class.” This classification makes it easy for these companies to “herd” the cattle class into the back of the cabin and to offer them little service; while the business class are pampered with superior service. A good example is Virgin Atlantic, a British airline. Their customers that fly Upper Class were provided with private cars to take them to and fro airports – a privilege which economy class customers do not get. Their Upper Class customers also have flunkeys waiting in the lounge to cut their hairs and polish their shoes. One thing is for certain: this type of preferential treatment might intensify resentment of the haves by the  have-nots. Not only that, it also make it hard for the have-nots to get entry-level jobs.¹¹

 Second, businesses need to understand the importance of meeting with their customers. If they never meet their customers, the result may be disastrous: they will lose touch with them.  From a business standpoint, self-service is great for saving costs. But this saving comes at a high cost for the business. This is because the effect of self-service over time is to train customers to shop on price. This means that the customers can easily switch as soon as a slightly cheaper rival comes along. And one final point: British’s mainstream supermarkets are now suffering from an inversion of German discounters.¹² Firms will be making themselves vulnerable to the same fate if they stop trying to differentiate themselves with good service.

 

 

References

 

¹Clarence Saunders. (2014). NNDB,  Retrieved August 25, 2015 from http://www.nndb.com/people/054/000166553/.

²Schumpeter: The Piggly Wiggly Way. (2015, May 9). The Economist. Retrieved August 25, 2015 from http://www.economist.com/news/business/21650554-businesses-should-think-carefully-about-continuing-heap-work-their-customers-piggly.

³Mitchell, Tucker. 2013. "A Pig’s Tale: How the Grocery Store Was Invented ." SCNow, January 16: Retrieved August 25, 2015 from http://www.scnow.com/opinion/columns/article_5137c928-56c3-11e2-a5c2-001a4bcf6878.html.

⁴Schumpeter: The Piggly Wiggly Way, op. cit., p. 64

⁵Ibid

⁶Ibid

⁷Threadless(2015). Shop Threadless. Retrieved August 25, 2015 from https://www.threadless.com/

 

⁸Schumpeter: The Piggly Wiggly Way, op. cit., p. 64

⁹Lambert C.(2015): Shadow Work – The Unpaid, Unseen Jobs that Fills Your Day. Berkeley, CA: Counterpoint.

¹⁰Schumpeter: The Piggly Wiggly Way, op. cit., p. 64

¹¹Ibid

¹²Ibid