Customers prefer to do it for themselves

Last month Tesco announced plans to install 20 self-service checkouts at its Bishopsgate branch in London, which will for the first time account for more than half of all tills in a store.

The scale of the project is evidence of the growing popularity of self-service technology.

Each week, some 1.5 million Tesco customers use self-service checkouts. The tills have a touchscreen with multimedia graphics, voice and visual prompts, and a signature capture pad for completing credit card transactions without the need for intervention by staff.

Tesco is to extend the technology to include belted checkouts for trolleys in addition to the current basket-only terminals, and upgrade systems so they can accept vouchers, deactivate security tags and dispense cash.

Fellow retailers Marks & Spencer and Sainsbury’s have also seen significant interest in self-service technology, as have other industry sectors, particularly travel and transport.

British Airways was an early adopter, and uses the technology to allow passengers to buy tickets, manage their bookings and check in for flights.

‘We have found that customers prefer to do it themselves,’ said Mike Croucher, head of IT at BA. ‘There is no need to queue other than at airport security.’

Croucher says the airline’s figures indicate clearly that customers are keen on self-service technology, and predicts that it will eventually overtake BA’s desk sales. ‘Last month we checked in half a million passengers at the desks and 300,000 online and at self-service kiosks,’ he said.

When BA moves to its new headquarters at Heathrow Terminal 5 in 2008, its goal is to have 80 per cent of customers using self service.

Croucher says the benefits to the business are significant, including massive cost reductions associated with printing and a reduction in paper. There is also less need for desk space, which is expensive to lease and staff.

Ovum analyst Gary Barnett says self-service can be expensive to install because it is non-standard technology, particularly for businesses such as airlines and banks that have additional security requirements.

‘But integration with existing systems is not complex, and many retailers have experience of connecting online channels to their core mainframes already,’ he said.

‘It is proving to be win-win: it lowers costs and increases customer satisfaction because they can avoid long queues.’

But Datamonitor analyst Adam Jura says that full self-service is not yet imminent.

‘There will always be limitations because of how customers receive the technology, and face-to-face situations are necessary,’ he said.

‘There must also be confidence in security; if customers feel the transaction is not secure, they will be wary.’

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Further reading

Tesco closes tills to PIN fraud

IT helps BA profits take off

Consumers ready to do it themselves