How Home Depot tackles queues

Yesterday, we looked at how Disney was taking on lines; today, Home Depot is up. Fast Company has a brief article on what the home-improvement chain is doing to keep customers moving through its stores (Home Depot Innovates Customer Checkouts, Apr 16). The article points to four things (which are numbered on the diagram below):

1. PLASTIC ON THE FLY
2. SCAN NOW, PAY LATER
3. LEAVE YOUR WALLET IN THE CLOUD
4. SEE YOURSELF OUT

Read Full Post »

Using RFID to eliminate airport queues

How should airlines get passengers through airports with minimal delay? One possibility is to provide loads of capacity. There are two ways to do that. One is hire lots of staff or put out lots of kiosks. That requires both money and space. The Wall Street Journal reports (The Trump Card at Check-In, Dec 29) that Qantas has found an alternative way to expand check-in capacity on its domestic routes: Use technology to greatly reduce the processing time so the same number of kiosks can process far more customers. This graphic summarizes their revised process.

Radio-frequency ID cards (RFID) chips are key to making this work.

The system, built around radio-frequency ID cards (RFID), is similar to toll tags used on highways and bridges. Top-level frequent fliers get an ID card that is flashed at a kiosk in the ticketing area. In seconds, the system finds the reservation for that day, assigns a seat based on personal preferences if one wasn’t pre-selected and checks the passenger in. When everything is good to go, a beacon illuminates.

To check luggage, the passenger goes to a baggage drop point, flashes the frequent-flier card in front of a reader and drops luggage on a baggage belt. The bag is weighed, and lasers measure its dimensions to make sure it complies with limits.

Top-level frequent fliers have heavy-duty RFID tags called “Q Bag Tags” for their bags that replace paper luggage tags. The technology reads the bag’s “identity” as it moves from luggage belts to carts to airport tarmacs. This ensures luggage gets loaded on the same flight as its owner. Other travelers get a paper tag for their bag with an imbedded RFID chip.

Read Full Post »

Tweaking retail operations to deal with changing customer behavior

I am getting ready to teach my service operations class next term and that has had me plowing through articles on retail operations and there have been a number of them recently. Let’s start with an apparent problem. Many stores are supposedly seeing more competition from Web-based retailers. This is apparently very true for retailers like Best Buy who live and die with branded goods that are easy to research on line (Best Buy Sales at Risk as Surgical Shoppers Lose Impulse: Retail, Businessweek, Oct 17). That has put a premium on good customer service that converts traffic into sales and possibly gets shoppers to buy more.

“Most retailers are geared for people to come buy,” said Maddocks, a former chief marketing officer at Nike Inc.’s Converse. “Retail has to start gearing itself to sell, to get more out of every person that walks through the door.”

[Bill] Martin [chief executive officer of ShopperTrak] has been analyzing shopping patterns for the past 15 years. Typically traffic and sales growth rise or fall in tandem. Last year he spotted something new. Even as retail sales grew 3.5 percent, according to the NRF, traffic declined 0.5 percent, he said.

When the trend continued this year Martin didn’t know how to explain to clients what was happening, so he asked his researchers to dig for answers. They discovered Americans were turning into what he calls “surgical shoppers.”

Men were the original mission shoppers, and they adopted e- commerce first because it saved time. Faster Web connections and a better shopping experience drew in more women. This has accelerated change in shopping behavior because women outspend men and retailers have long focused their efforts on them.

“Women now go into a store, hoping to go right to what they need like a man would,” said Delia Passi, CEO of Hollywood, Florida-based Medelia Inc., which advises companies such as Home Depot Inc. on how to appeal to female shoppers. “The science of retail shopping has changed, and unfortunately the retailer hasn’t.”

Read Full Post »

Shadow work and self service

How should we think of self service? Is it good for society in any sense or is it stealthy way to increase costs for customers? An article in today’s New York Times argues for the second point (Our Unpaid, Extra Shadow Work, Oct 30). The opening paragraph sets the tone:

THE other night at the supermarket I saw a partner at a downtown law firm working as a grocery checker, scanning bar codes. I’m sure she earns at least $300,000 per year. Even so, she was scanning and bagging her purchases in the self-service checkout line. For those with small orders, this might save time spent waiting in slower lines. Nonetheless, she was performing the unskilled, entry-level jobs of supermarket checker and bagger free of charge.

In the eyes of the article’s author, the lawyer has been co-opted into a dubious labor deal.

This is “shadow work,” a term coined 30 years ago by the Austrian philosopher and social critic Ivan Illich, in his 1981 book of that title. For Dr. Illich, shadow work was all the unpaid labor — including, for example, housework — done in a wage-based economy. …

To do the work requires extra jobs, like commuting. The commuter often has to own, insure, maintain and fuel a car — and drive it — just to get to work and back. These unpaid activities ancillary to earning one’s wages are examples of shadow work. …

The conventional wisdom is that America has become a “service economy,” but actually, in many sectors, “service” is disappearing. There was a time when a gas station attendant would routinely fill your tank and even check your oil and clean your windshield and rear window without charge, then settle your bill. Today, all those jobs have been transferred to the customer: we pump our own gas, squeegee our own windshield, and pay our own bill by swiping a credit card. Where customers once received service from the service station, they now provide “self-service” — a synonym for “no service.” Technology enables this sleight of hand, which lets gas stations cut their payrolls, having co-opted their patrons into doing these jobs without pay.

Examples abound, helping drive unemployment rates. Airports now have self-service check-in kiosks that allow travelers to perform the jobs of ticket agents. Travel agents once unearthed, perused and compared fares, deals and hotel rates. Shadow-working travelers now do all of this themselves on their computer screens. Medical patients are now better informed than ever — as a result of hours of online shadow work.

If you have read this blog for a while, you may already be able to guess that I may not completely agree with the above analysis. Indeed, I generally prefer self-service options. That, of course, is my preference. However, I have to think that self-service makes many people’s lives better off whether or not one wants to worry about shadow work.

Read Full Post »

In defense of self-service checkout

I have previously stated that I love self-service checkouts. It may just be that I hate making eye contact (ask anyone who has had to sit through me teaching). I consequently worry every time there is a story suggesting that supermarket chains are eliminating them. Gady had a post on this trend this summer and now the Associated Press is piling on with an article that was picked up by several newspapers (Supermarkets start bagging self-serve checkouts, Sep 26). Here is what the AP says:

Big Y Foods, which has 61 locations in Connecticut and Massachusetts, recently became one of the latest to announce it was phasing out the self-serve lanes. Some other regional chains and major players, including some Albertsons locations, have also reduced their unstaffed lanes and added more clerks to traditional lanes.

Market studies cited by the Arlington, Va.-based Food Marketing Institute found only 16 percent of supermarket transactions in 2010 were done at self-checkout lanes in stores that provided the option. That’s down from a high of 22 percent three years ago.

Overall, people reported being much more satisfied with their supermarket experience when they used traditional cashier-staffed lanes. …

An internal study by Big Y found delays in its self-service lines caused by customer confusion over coupons, payments and other problems; intentional and accidental theft, including misidentifying produce and baked goods as less-expensive varieties; and other problems that helped guide its decision to bag the self-serve lanes.

So one interpretation of this is that the systems are too hard to use and thus unappealing to the average shopper. The counter argument to that is in the United Kingdom. Tesco, the heavyweight champion among British supermarkets, racks up 10 million transactions per week on its self-service tills, fully one third of all its transactions (Tesco Deploys NCR Self-checkouts in Central, Eastern Europe, Sep 16, Progressive Grocer). Perhaps the Brits are more willing to adopt new technology or maybe Tesco aggressively understaffs it regular registers so that customers have no choice but to use the self-service option. In any event, it should be possible to have a decent level of adoption in the US.

The question then is what’s in it for the customer?

Read Full Post »

A table tablet

So how far can we push self service? That’s an interesting process design question. There are clearly instances in which (at least some) customers prefer to do the work for themselves as opposed to waiting for a staff member to serve them. But just how far that be taken?

A California start up is now trying to see if it can move self service into full-service restaurants. At many restaurants, customers already participate in the service process by, say, picking up their food at the counter or clearing their table when they are done. E La Carte, however, is targeting restaurants which otherwise have “proper” sit-down service. They provide a tablet that resides on the table and allows customers to peruse the menu or order more drinks at their leisure. Here is how it is described in Slate (This Waiter Doesn’t Need a Tip, Apr 22):

It works like this. The company manufactures tablet computers with full-day battery lives and a credit-card reader attached. The interface is easy enough for a grade-schooler to use. You select what you want to eat and add items to a cart. Depending on the restaurant’s preferences, the console could show you nutritional information, ingredients lists, and photographs. You can make special requests, like “dressing on the side” or “quintuple bacon.” When you’re done, the order zings over to the kitchen, and the Presto tells you how long it will take for your items to come out. Want a margarita in the meantime? Just add it on the console, and wait for the waiter to bring it. Bored with your companions? Play games on the machine. When you’re through with your meal, you pay on the console, splitting the bill item by item if you wish and paying however you want. And you can have your receipt emailed to you.

According to CNNMoney (Your new waiter is a tablet, May 16), the system has been installed in a number of Bay Area restaurants and has been well received. The company claims that it has boosted sales 10% to 12%, largely by enabling impulse purchases (another round of drinks is an excuse to play with the toy).

The question is whether in the long run this is an attractive process redesign.

Read Full Post »

Apparently our robot overlords want the crappy retail jobs too

How’s this for an alarmist headline? Retail jobs are disappearing as shoppers adjust to self-service (LA Times Mar 3) Here’s the article’s point of a view in a nutshell:

In an industry that employs nearly 1 in 10 Americans and has long been a reliable job generator, companies increasingly are looking to peddle more products with fewer employees. Shipping and warehousing workers are being replaced by robots that can process packages more efficiently than humans. Virtual assistants are taking the place of customer service representatives. Kiosks and self-service machines are reducing the need for checkout clerks. …

“We have a service economy, and the service sector is starting to automate,” Ford said. “We’ve seen that technology does destroy jobs in those sectors.”

The shift is as close as the corner store. Like gas stations and banks before them, supermarkets are encouraging patrons to avoid cashiers. Most major grocery chains have equipped their stores with a few self-service lanes, which research has shown boosts revenue and profits.

Shoppers at Fresh & Easy Neighborhood Market, a subsidiary of British retail giant Tesco, don’t have a choice — all checkout stations at the chain’s 156 U.S. outlets are do-it-yourself. Customers like the speed and shorter lines, said Brendan Wonnacott, a company spokesman.

This video focuses on AVT Inc., a maker of advanced vending machines that is featured in the article.

So is increasing automation in retail really a cause for concern?

Read Full Post »

High tech comes to vending machines

My office sits in Nathaniel Leverone Hall. I never gave any thought to who Mr. Leverone was until on a visit to my parents in upstate New Hampshire I drove past Dartmouth’s Leverone Field House. That got me wondering who the guy was. It turns out that Mr. Leverone was from New Hampshire and went to Dartmouth but made his fortune in Chicago. He was a vending machine magnate.

I got to thinking about Mr. Leverone again because of a Wall Street Journal article on the technological evolution of vending machines (Restocking the Snack Machine, Aug 3). Companies who sell through vending machines, like almost everyone else, has been under pressure of late. Margins are thin and a number of typical sales points (factories and offices) have closed.

The response, at least among those that own a large number of machines, has been to go high tech. Imagine, essentially, an Internet enabled Coke machine that tells its owner what has been selling.

“It’s only natural that, when times get tough, people search for new and better ways to do things and take risks on doing things they might not have done when times were going well,” says John Mitchell Jr., an owner of Treat America Ltd. of Merriam, Kan., which has about 12,000 vending machines in the Midwest.

Treat America’s drivers used to stock machines with the most popular foods in their regions, based on sales tracked manually by category rather than individual items. It was difficult to know how different products were selling in particular machines.

Since January, Mr. Mitchell has outfitted about 40% of his machines with systems that record and transmit real-time sales data in each of a machine’s 45 slots. Mr. Mitchell says he now knows that about 40% of the slots are what he calls “dead spirals,” dispensing less than one item per week.

While packs of Cheez-It crackers sell the most of any item in a vending machine in a Kansas City, Mo., call center, they don’t even reach the top 10 in a hospital three miles away.

“You’re catering to a population that might be as small as 30 or 40 people,” Mr. Mitchell says. “The unique preferences of that population can drive sales significantly.”

Read Full Post »

Self-service prescriptions?

Sure you will print out your own boarding pass and maybe you will ring up your own groceries, but would you pick up a prescription from a machine? That may be coming (Prescription medication kiosks just what the doctor ordered, Selfserviceworld.com, Dec 29):

Kiosks designed to remotely dispense prescription medication are clearing the final hurdles to implementation, and may soon be rolling out in the United States and in Canada’s most populous province.

Medication-dispensing kiosks raise concerns about safety and improper access to potentially dangerous substances, but executives in the sector say the machines are safe — and in some ways perhaps better than the traditional pharmacy method of dispensing prescription medications.

Read Full Post »

Love or loathe: Self-service checkout

I apparently am different from many Britons.  I totally love self-service checkout systems, particularly at grocery stores.  Many Brits apparently have a different take — at least according to the BBC (The problem with self-service checkouts, Dec 9):

New research suggests 48% of Britons think self-service checkouts are a nightmare, neither quick nor convenient. Quite the opposite in fact, and their complaints are all too familiar.

Now the article is unclear about the other 52%. Are they indifferent or in love?  Do they dislike the machines to an extent less than totally loathing?  What is clear is that the author of the piece has an ax to grind and would like to sink that ax into the speaker squawking “unexpected item in the bagging area.”

Despite her flights of hyperbole, the author has a point.  These machines are not perfect and take some learning to use well.  She points to specific issues like not being able to use your own bag or that mysterious warning when the recently bagged item does not match what the machine was expecting.  Apparently, Brits also have paranoid thoughts that have never crossed my mind:

Finally, after the palaver of paying, there’s the nervousness about leaving the shop. Did I scan it all correctly? Did I select the right type of bread roll from the menu? Will I feel the long arm of the store (manager) on my shoulder as I walk out the shop?

“I spend half my time worrying that security will arrest me for selecting the wrong price Blueberry muffin,” said shopper Sharon Adams when consulted in a survey on self-service tills conducted by Fatcheese.

Read Full Post »