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The Human Factor

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Turning Time Savings at-Retail Into Customer Care

The first vending machine was introduced in London, England to sell postcards, and just a few years later, America ran away with the concept when the Thomas Adams Gum Company began placing self-service gumball machines on train platforms, providing passengers with what, at the time, was a unique shopping experience. Retail automation - meaning the ability for consumers to purchase without the assistance of a clerk or salesperson, or even a retail environment - has gone way beyond the original vending machines and now is a key feature of the retail landscape.

Today, we have automated payment and delivery systems for almost every consumer product under the sun. With mechanical and digital improvements to ensure reliable operations and security, consumers regularly pump their own gas, buy airline tickets online, perform routine banking transactions via ATM machines, register themselves at hotel kiosks, and check out their own groceries at the supermarket.

Automation has caught on because it is a good idea for both the retailer and the consumer. For retailers, it reduces overhead by eliminating the cost of human labor - or at least significantly reducing it. Rather than hiring a fulltime clerk, the retailer needs only a few hours of an employee's time to program and/or re-stock and service the machine. Machines are designed to deliver the same service to every customer every time. Because machines are incapable of recognizing or making choices, they won't violate store policies, give unauthorized discounts, or forget about this week's two-for-one offer. They know if a coupon has expired. And machines don't need coffee breaks, vacations, or sick days.

The bottom line is customers like automation. Anyone who has waited 20 minutes in a supermarket checkout line to buy a loaf of bread can appreciate the simplicity and directness of doing it yourself through the self-checkout line. Some human interaction is lost in this, but often overall customer satisfaction isn't affected because customers are actively engaged in getting themselves through the purchase process, rather than simply standing there wondering why a simple errand takes so much time. And it's no surprise that, in many cases, customer satisfaction lies in getting in and out of the buying process as quickly as possible.

MORE THAN BREAD ALONE

While automation has brought significant advantages, it also has some recognizable drawbacks. For example, the big-box retailers have been able to offer discount pricing by selling in volume at no-frills warehouse-style stores. Although their internal operations are fully automated, their profits come from selling a case of mustard at what amounts to a rock-bottom per-item price, rather than taking a higher mark-up on singles. They use automation to keep their internal operations lean, while shifting other traditional costs to the consumer. Their customers buy in bulk, wrestle with case-size packaging, and warehouse their own inventory. But the return is that the retail price is low.

How then does a small to mid-size retailer compete? Certainly not on price alone. Selling any product purely on price has been described as "a race to the bottom." Obviously price sensitivity is always of interest to the consumer regardless of the economic seasons, but it's not always everything. Selection, service, quality, experience, convenience, and familiarity are significant.

A more positive response is the value-added approach to establishing a distinct store brand. Creating an in-store, customer care marketing plan (CCM) holds the unique power to precisely guide, advise, and direct the shopper in his/her final moment of decision. At the heart of an effective CCM plan lays the capacity to respect and connect to your customer base, while growing your revenue. Providing shoppers with a shopping experience based on friendliness, helpfulness, and clarity that stays with them after they leave the store can foster customer loyalty that is priceless. This can be done in a number of ways, including developing a niche or a specialty, such as organic foods, a wide variety of wines, or exotic offerings like buffalo meat or ethnic foods.

It is also important for retailers to consider rethinking the roles their employees play in the store as part of a push for higher customer care in-store. If more automated processes free up their time, making them customer service representatives and product specialists rather than generic clerks and shelf stockers might be an impactful part of a marketing plan.

Retail automation supports and even fosters this concept. Automated processes and in-store design features save time and labor. Where else should this time and labor go but up? Let's return for a moment to that simplest of all automated devices, the vending machine. While it provides a way for consumers to quickly and easily purchase a product without third-party human intervention, machines are also limited in the number of items they make available and the way products are purchased. They present a fixed menu. What if the consumer wants something else? Or doesn't know which product has the least fat or no dairy? A knowledgeable employee in the produce department can help explain the difference between a banana and a plantain, and maybe introduce the consumer to other unusual recipe ingredients.

Health and wellness is an area that's very popular right now, but it also can be very confusing. If something is labeled "organic," is it the same as "natural"? Is there a meaningful difference between "frozen," "fresh," and "free-range" poultry, or between sea salt and the other kind? Government standards regulate the labeling of food and drug products. Do you know them? Most of us don't. There are legal restraints on who is qualified to give nutritional and health recommendations, but employees can learn and explain how much real juice is in a "reconstituted" product, how much sugar, and perhaps if it's beet or cane sugar.

While retailers may be reluctant initially to invest in hiring a qualified nutritional specialist, they might assign an employee to take some training in interpreting labels, for example, or learning about different types of pasta, seafood, or cooking techniques. Adding another dimension to the job description also gives the employee a greater sense of self-worth and makes them more valuable to the store and to customers.

Another option is to occasionally bring in the "experts," including chefs, cosmeticians, or cleaning specialists for in-store events and demonstrations. You might need them for only a couple hours per week when appropriate traffic is at its peak, and these events can be promoted inexpensively using in-store signage or announcements in the weekly circular. CPG sales reps and vendors may serve as a source of additional information about their products and product applications, and they may be willing to offer some training.

"HIGH-TOUCH"

Wegmans, a regional supermarket chain in the northeastern U.S., has raised these ideas to a science, with employees who specialize in cheeses from around the world, wines and liquors, seafood, and more. The store regularly publishes Menu magazine and has chefs on staff who prepare meals that can be eaten in the store or taken home. Some supermarkets may not wish to provide what Wegmans calls its "near telepathic level of customer service," as they may not have a receptive local market for these types of services. However, the central idea is sound: setting your store apart by going the extra mile to provide services your customers will appreciate and that generates a sense of store loyalty. Adding value with a focus on customer care in-store doesn't have to break the budget. Retailers are very creative, and I would anticipate seeing more focus on assisting and educating the customer in the months and years to come.

Retail automation has given us all a more accurate and faster way to accomplish routine and repetitive tasks. By enabling self-service, automation has shifted much of the work of shopping to the consumer, and it has also reduced much of the one-on-one human interaction that was the traditional way to build retailer's relationships with customers and the community.

The digital revolution that brought high-tech to everyday life has also driven the movement toward "high-touch," or more personal and customized service. Other observers have noted that, today, customer loyalty increasingly is driven less because a consumer likes a store - or bank, or mechanic - so much as by the "pain of change." That is, the customer may have an existing account with a particular retailer and switching to a different store only involves more work and inconvenience. This is loyalty by default, and surely we can do better than that.

The time and labor we save by utilizing today's technological solutions can easily be re-channeled into providing a higher level of customer service, the "high-touch" element that is so often neglected or eliminated as unnecessary. Taking even the smallest steps toward recognizing each customer's individual needs and sincerely trying to fulfill them goes a long way to enhance the consumer's shopping experience, giving them a good reason to return. It's a re-investment that is certain to show positive returns in good will and customer loyalty.

Kudos always to the retail industry that continues to work diligently to bring consumers automated services that save everyone time and money, while investing diligently in their retail brand and brand experience.

Tim McKenzie is president and COO of Vestcom International, Inc., the leading provider of shelf-edge communications and specialized marketing services for retailers. His creative, problem-solving efforts have helped increase sales and decrease operational costs for industry-leading retailers. He can be reached at tmckenzie@vestcom.com.

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