From the July 2002 issue of Entrepreneur

Some of the people ringing up groceries on registers at Bob's Big M Store in Wolcott, New York, don't work there. They just shop there. Co-owner Robert Delf says a self-service checkout line has proved more than acceptable to customers. "We think it's something they like and might not come here otherwise," says Delf, 36.

Self-service has long been accepted in gasoline sales and financial services. Consumers have eagerly adopted gas pumps that let them fill up without going into a store and ATMs that allow consumers to get cash, check balances and transfer funds 24 hours a day.

Driven by improved technology, opportunities for cost savings and success in other fields, self-service is showing up in a broad spectrum of retail, information and service industries. Customers buy airline tickets at self-service kiosks, exchange jars of change for bills at coin-counting kiosks, custom-mix their own CDs at music store kiosks, and order and pay for their sandwiches at kiosks in Schlotzsky's delis. Using only telephone keypads, they check flight schedules, move money between mutual funds and navigate company switchboards. They make a variety of purchases through self-service Web sites, configuring their own laptops at Dell Computer's e-commerce site, stocking up on bestsellers at Amazon.com, and ordering cellular service plans using Verizon Wireless' online tools.

They perform these transactions and more, all of which once required human intervention, without ever seeing, speaking or writing to a salesperson or customer service representative.

Do It Yourself


"How would you like to be in the retail gasoline business and not have pay-at-the-pump?"

Before trying self-service, experts advise you to study and know your customers. See what, if anything, self-service can offer them. Self-service often appeals to people who want to be in control. A desire to avoid dealing with insurance brokers and car salesmen is one reason consumers have embraced self-service in insurance and used-car sales, according to Prescott.

Check your own costs and benefits. Self-service technology isn't cheap. A self-checkout stand costs about 20 percent more than a human-operated one, says Delf. And an automated voice-response telephone system can cost $4,000 a line, Prescott says.

But self-service saves money as well. One way is by allowing businesses to grow without adding employees. Grocers can have more checkout lines in the same space because self-service lanes don't take up as much room. "One of the key drivers for self-service is cost savings," says Prescott. "There's no question it's cheaper, and the return on investment can be as quick as 150 days."

Self-service has to do more than cut costs, however, says Leonard Berry, distinguished professor of marketing at Texas A&M University in College Station. "It's a good idea only if it's designed for the consumer's benefit and not only to save the company money," says Berry, author of Discovering the Soul of Service (Free Press). Forcing customers into self-service against their will only drives them to competitors. So another key is to provide a full-service option for customers who don't like doing it themselves or who encounter problems.

There are other risks. Confusing or awkward self-service systems may alienate customers. Some services and products, such as alcohol and tobacco where age must be verified, are not suitable for current self-service technologies. Security against theft is also a concern.

Self-service has been around for decades, but its best years may lie ahead. Retina scanners promise to identify and age-verify shoppers by looking at their eyes. Improved voice-response systems will allow businesses to improve service without adding costs. Interactive self-service will help entrepreneurs collect data about customer preferences. More companies will offer more convenience and more options and build higher levels of customer loyalty-all by letting them do it themselves.

Under the right circumstances, self-service can be huge. Not many years ago, it was common for motorists to pull into a gas station and have an attendant jump to help them. Then came self-serve gas pumps and now the ability to pay at the pump as well-a self-service innovation that has become the standard. "How would you like to be in the retail gasoline business and not have pay-at-the-pump?" asks Berry. "You're not competitive if you don't have a pay-at-the-pump option."

Contact Source

  • Bob's Big M Store,
    12030 Park Ln., Wolcott, NY 14590, (315) 594-9535