The Use of Self-Service Technology in Retailing

University Degree Business and Administrative studies

Introduction

Today’s fast paced world is becoming increasingly characterized by technology-facilitated transactions. Growing number of customers interact with technology to create service outcomes rather than personally interacting with a service firm employee. Meuter et al. (2000, 50) defined self-service technologies (SSTs) as “technological interface that enable customers to produce a service independent of direct service employee involvement.”

Given that the emphasis in the academic research has focused mostly on the interpersonal dynamics of service encounters, there is much to be learned about customer interactions with technology-based self-service delivery options (Bitner, Brown, and Meuter 2000, 141). It is increasingly evident that technological innovations and advancement will continue to become a critical component of customer-firm interactions. These technology-based interactions are expected to become a key criterion for long-term business success. This continuing proliferation of SSTs conveys the need for research that goes beyond the interpersonal dynamics of service encounters into this technology oriented context (Pasuraman 1996, 58).

This paper shall focus on one of many industries where SSTs had been prominently implemented, which, in particular, is the airline industry. This research’s goal is to gain insight into the effectiveness of SSTs for the industry and the research will be based on both the customer and the organization’s perspective. This includes the possible costs and benefits that the customer and the organization might gain after the implementation of SSTs.

This paper will also emphasize on the point that despite the dramatic increase in the use of self-service technologies across industries, customers may need help during the transition period from full- to self-service (Strother, Fazal, and Rettich 2010, 191). For instance, in the airline industry, companies generally position the staffs beside the check-in kiosks to help their passengers. Despite the increasing trend toward self-service technologies, organization must communicate with and provide service to customers through multiple channels in order to meet customer needs. The role of professional communicators is essential to ensure a smooth transition from full- to self-service (Strother, Fazal, and Rettich 2010, 191).

Service Encounters and SSTs Dynamics

Academic researchers have recognized the critical importance of technology in the delivery of service. It was suggested that the traditional marketplace interaction is being replaced by a ‘marketspace’ transaction (Rayport and Sviokla 1994, 3). The ‘marketspace’ is defined as a “virtual realm where products and services exist as digital information and can be delivered through information based channels” (Rayport and Sviokla 1994, 3). The foundation of customer-firm interaction has significantly changed in this new marketspace environment. SSTs are a classic example of marketspace transactions in which no personal contacts is required between buyer and seller.

Several studies have investigated issues involving SSTs, mainly focusing on the development of user profiles. Langeard et al. (1981) among others were one of the firsts to identify and describe customers who might be willing to use self-service delivery alternative. They attempted to segment markets on the basis of willingness to participate actively in the delivery of services. It was eventually found out that participants tend to be younger, single, and better educated and have a lower income level. Bateson (1985, 67) explores the choice between a self-service option and an interpersonal service delivery system. Bateson examines the attractiveness of self-service options when the usual monetary and time-saving incentives are controlled and finds that a significant group of people choose to use self-service options even without the monetary or time-saving benefits.

One important issue to be noted from these early studies is that both Langeard et al. and Bateson is that they made no distinction between technology-based self-service scenarios and the more labor-based self-service situations. Only two of the six self-service scenarios across the studies were technology-based (i.e. using ATM machines or purchasing traveller’s tickets from an automated machine). It is likely that the technological aspect of recent self-service options has a more unique influence on consumer perceptions.

Dabholkar (1992, 564) conducted a more in-depth research by evaluating SST’s service quality using a comparison between an attribute model based on what customers expect from the computerized fast food ordering SST across various attributes (expected speed of delivery, ease of use, reliability, enjoyment, and control) and an overall affect model based on beliefs about the use of technology and the need for interaction with service employees. Dabholkar finds out that the attribute model to be superior in predicting evaluations. It was also revealed that enjoyment and control are the two most influential attributes.

Correlating these studies into the ...

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Correlating these studies into the research, it could be said that the same theories also apply within the context of airline industries, in a sense that the primary reasons for consumers using SSTs are because of its efficiency and reduced cost and labor, as well as freedom of control and a feeling of superiority (Abdelaziz, Hegazy, and Elabbassy 2010, 17). Customers no longer need to go to a physical check-in kiosk and wait in a queue to purchase their tickets. They can now do it online through a website which would take them to a step-by-step process, in which they could complete all the procedure in one sitting. SSTs via the internet in airline services could also grant the consumers more freedom in their service options, and another plus point is that they could do it in a more relaxed atmosphere (i.e. in their own home with their own PC) where they could take it easy in making their decisions. Additionally, giving the customers the opportunity to do the procedures themselves may give them a sense of superiority. All in all, it is not an overstatement to say that almost all flight passengers these days choose to utilize SSTs in making their purchase.

Role of SSTs within the Airline Industry

In recent years, the airline industry started to introduce a variety of innovative check-in technologies. The dedicated self-service check-in kiosks are now an integral part of many airport facilities, and the new e-ticket service also allows the use of online check-in. These new features enabled the airline industry to reduce the time and staff required, thus saving a substantial amount of costs in the operation. Additionally, it also helped them to increase the number of passengers due to reduced number of queues (Abdelaziz, Hegazy, and Elabbassy 2010, 18).

Abdelaziz, Hegazy, and Elabbassy (2010, 18) classified the typical SSTs that an international airport has into four; information kiosk, ticketing kiosk, retail kiosk, and Common User Self Service (CUSS) kiosk. Information kiosk is a standalone desk or an interactive computer terminal that provides information. Ticketing kiosk can be used by customers to purchase tickets, check baggage, and monitor the status of arrival and departing flights of a specific airline. CUSS kiosk is relied by the airline industry in helping to ease congestion and prevent long lines in check-in counters. Retail kiosk act as a booth where people can purchase food, magazines, or souvenirs before or after a flight.

To compile these characteristics in a nutshell, computerized terminals allow customers to avoid long lines at ticket counters and check in for their flights at their own convenience. Customer service agents are relieved from the burden of manually entering information and checking in a large number of passengers before flights. They would be able to help people who have difficulties with kiosks and those who need to discuss special accommodations instead. The self-service model reduces or in some cases, eliminates the needs for airline staffs to personally cater for passengers in performing tasks that the passengers themselves are often willing and able to do it themselves. The main challenge faced by various aviation companies is in fact, keeping a large number of kiosk assistance on standby 24/7 to handle surges in passenger traffic.

Customer Responses to SST Encounters

Given the proliferation of SSTs and the wide variety of types and purposes of these SSTs, it is critical to understand how customers feel about them, how they use them, and whether they are willing to use it in the future. This section shall focus on the dis/satisfaction underlying SST experiences. It is well established that customer satisfaction can affect customer retention and profitability (Anderson and Fornell 1994, 247). Thus, understanding the underlying factors that trigger dis/satisfaction in SSTs has important managerial implications on customer-firm relationships.

Research has shown that customer evaluations are influenced by attributions for success and failure in interpersonal service situations (Bitner 1990, 71). With SSTs, customers create the services for themselves therefore it is possible that they will have higher acceptance for the responsibility of the outcome (Mills, Chase, and Marguiles 1983, 305). If customers accept partial responsibility in dissatisfying situations, they may be more likely to use SST in the future. Again, this could have important managerial implications as companies develop new SSTs and struggle with service encounter failures.

While new technologies are revolutionizing the retail environment, some customers do not necessarily see the incorporation of technology as an improvement (Meuter et al. 2003, 902). In their research, Meuter and his team surveyed over 800 customers utilizing a web-based survey. Their central focus was to study what they termed ‘Technology Anxiety’ and its impacts on consumer usage of SSTs. The finding indicates that respondents with higher levels of technology anxiety use fewer self-service technologies. In addition, technology anxiety was also found to influence overall feelings of satisfaction, intentions to repurchase and the likelihood of participating in positive word of mouth (Curran et al, 2003).

Pros and Cons of SSTs in Retailing

As discussed above, the implementation of self-service technologies can improve the quality of services a firm gives to its customers Technology can make the task of shopping easier and more manageable. Technology can add convenience and enhance time management as well.

However SSTs can, and sometimes, fail. The ATM that mistakenly eats a bankcard and the interactive voice response system that mishears an order are a few examples, or if based on the context of the airline industry, server errors which rendered several ticket orders to be missed, or server downtimes are some of the common problems that can be found in a flight service’s SST. About half of the time customers recall failures rather than successes when using SSTs, and contrary to Mills, Chase, and Marguiles’ (1983, 305) belief that customers tend to have higher acceptance of their failures since they create the services for themselves, on some occasion, customers may blame companies and their technologies, not themselves, for these dissatisfactions (Nakata 2003, 69).

Customers are always in need of better purchasing opportunities. But very often firms fail to visualize the customers' 'vision’. What the customers expect and what they perceives to get in return has a great impact on their satisfaction or dissatisfaction and their propensity to return to the firm’s service, or to seek alternatives from the competitors. Firms may aggressively pursue for implementing SSTs in their service, but in their rush, firms often disregard technology failures and the associated risks of losing customers because of technology related difficulties (Hsieh 2005, 79).

Factors Affecting SST Adoptions and Usage

There are a plethora of factors that contribute or detract from consumer adoption rates and satisfaction. Some of it are: quality of the products, services offered by the organization or firms, cost of the products, presentation of the services, design of the SST, the SST’s ability for service recovery (even if caused by the customer), the way the firm promote/advertises the SST, the way the firm manages and prevents SST failures, alternate choices for the same service (offered by the firm or competitors), and the firm’s ability to keep the SST updated and to continuously improve the SST.

The implementation and adoption of new technology brings several questions into the minds of the consumers. In this regard it can be said that self-service technologies are an effective source to reduce costs and increase the number of customers for the firm. However, it can also go the opposite way, if customers either would not try the new SST, or try it once and then shift to the competitors. Hence, this raises the question regarding what the customers actually value, and how would the firm’s new SST provides that value.

Communication has been found to influence the adoption of technology (Lee et al 2002, 562). Lee's study suggested that written and spoken communications from formal institutions had a positive impact on the customers’ decision to adopt a new technological innovation. Moreover, it was found that conversational communication greatly influenced adoption decisions. The combination of information from firms, family and friends had the strongest impact. Lee and his team surmised that since conversation is interactive, learning effects are increased and this leads to a behavioral change toward adopting a new innovation. This implies that firms implementing a new SST need to communicate in both written and conversational modes. It is necessary for them to demonstrate their product to the best extent possible and allow for interactions between their personnel and the potential customer.

Implementation Strategies for Gaining Competitive Advantages

Successful implementation of the SSTs project requires thorough studies of the needs of all involved parties and well-planned implementation strategies. Below are several strategies that may be used as a guideline for firms that are planning to adopt or improve their existing SSTs, this includes the airline industry as well:

Research what the customer value and focus on customer needs. Make the application for the kiosk user-friendly even to the most technically challenged user; include an on-screen tutorial. Make sure that the SST is focused on the customer and not just a way to reduce staff costs, success with SST is dependent upon customer focused design (Bitner et al. 2002, 103). Listen to the customer and strive to achieve more than they expect.
Provide protection and reassurances for privacy and security. Plan a countermeasure for hackers and cheaters. Make sure employees and customers are informed of the rules and measures for security and provide training if warranted. This will build trust with the customers. Security measures can be expensive, plan and budget for them throughout the life of the SST.
Minimize SST failure potential. The largest percentage of negative responses received in SST customer feedbacks were attributed to SST failure. A major complaint about SST was that there was often no recovery system when the SST failed (Bitner et al. 2002, 104). Firms need to develop a robust system and provide for on-the-spot recovery whenever possible.
Take an aggressive approach in advertising and promoting the SST. Let the customers know the benefits of this new service delivery mode. Awareness is a big part of SST success.
Plan for updates, repairs, maintenance, and general continuous improvement. Contingency planning is very important. The product life cycle of an innovative product is generally short. A firm must be able to evolve and adapt (Bitner et al. 2002, 106).

Conclusion

Technology had become an integral part of the marketplace. Consumers are increasingly given the option or are being asked to provide the service for themselves through the use of SSTs. It is important for providers of SSTs to understand how customers evaluate SSTs so that firms can improve on them. This paper has identified several factors that appear to influence dis/satisfaction with technology-based encounters. These factors can therefore provide insight for firms that currently offer or are planning to offer SST as an alternative method of service delivery.

It is important to note that SST is not just for the firm’s benefits, it is also intended to provide value for customers. The firm’s ability in providing a quick and easy service for the customer will influence the choices they make. It is also important to keep the customers engaged by providing innovations. Effective management of SST delivery options can also become an excellent means of creating a competitive advantage.

References

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The Use of Self-Service Technology in Retailing

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