Feb 25, 2020
Today's podcast is an oldie but goodie. A podcast we first released in May 2019 was so popular we decided to share it again! In this episode, we take you on a journey of how self-service has woven its way into so many of our daily activities from paying for gas to checking in for a flight and really what are the consumer expectations for these types of offerings.
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Amy Lombardo: Hello again, this is Amy Lombardo, your host for this episode of Commerce Now. In today's episode we're joined by Matt Redwood who is the head of self service checkout for Diebold Nixdorf's retail division. And today we'll discuss how self- service has woven its way into so many of our daily activities from paying for gas to checking into a flight and really what are the consumer expectations for these types of offerings. So hi, Matt and welcome to COMMERCE NOW.
Matt Redwood: Thank you for having me.
Amy Lombardo: Always a pleasure to talk to our friends in the retail division. So Matt, let's talk a little bit about your background first. Can you tell the listeners a little bit about yourself?
Matt Redwood: Absolutely. So as you said, my title is head of self service for Diebold Nixdorf. Been in the company about 15 months now. It was brand new position within the company and DN saw the need to put more focus on the self-service checkout. So look after the self-service checkout business for Europe, Middle East and Africa. I've been in and around self-service my whole career. I've been in retail for a nearly 10 years. So, I've worked with multiple different retailers all across the globe on their self-service strategy. But also that self-service implementations to make sure they're deploying the right solution into the right place.
Amy Lombardo: Very good. So Matt, what I wanted to do was start at a very high level and talk about some macro trends that are shaping the retail industry because you can't get away with reading any headline of any major industry publication these days without seeing something about self-service in there. So can you talk a little bit about some of those macro trends that are shaping the retail industry today?
Matt Redwood: Sure. So self-service in the form that we see at most grocery stores has been around for 15 years, which you know in the retail landscape is a long time. But it's taken a long time I think for retailers really to understand self-service checkout to get to a position that deploying it in the right way and of course for the consumers to adopt it in the right way. I think we're really at a tipping point now where from a consumer perspective is, there's self-service in every part of our life. Whether you go to the gas station, whether you go to the train station on the app or you go to the grocery, there is a self-service option and what we see in our data is that consumers really now see it as point of convenience for them. They see the benefits of self-service checkout and they've moved past the point of not only wanting it but they actually now dictate it to retain it.
Matt Redwood: So we have a lot of retail customers that come and want to work with us purely because that's [00:02:30] amazing that stores are actually demanding it. I think when self-service initially came on the scene and a lot of retailers saw it as a great way to strip costs out of that store. And so a lot of retailers, particularly in grocery, really went for very very high density self-service checkout deployment. They stripped a lot of stuff out of their stores but what they came to realize that actually they saw a bit of a drop in the consumer experience within their stores and I think the assumption was that they put self-service checkout and they remove staff, customers will use it and everything will be fine. But actually what happened is that had a detrimental effect on the consumer experience in the store because there weren't staff to help where consumers really valued the experience within the store.
Matt Redwood: So what other retailers now do is actually, it's not about a reduction in staff, it's about a redistribution in staff.
Amy Lombardo: Right.
Matt Redwood: If you take tasks that were normally done by the system and you give it to the customer to do, that frees up that member of staff to then be in other areas of the store to make sure that customers can find products, or the shelves are well stocked, they're well priced. So actually getting the experience right or getting the efficiency right at the self-service checkout as a knock on effect on the customer experience all the way right back through the store.
Amy Lombardo: Right. So Matt, can you explain how consumer's knowledge and their comfort level is shifting in terms of how consumers are engaging with the self-service technology today versus maybe what they did when retailers first started introducing it many years ago?
Matt Redwood: Sure. So I think there's really a perception shift with self-service checkout that's happened over recent years. I think when self-service was first introduced to stores, there was a bit of negativity and a bit of push back from consumers because they saw it as a replacement of the members of staff within the store, especially very loyal consumers that went to the same store every single week to do their shopping. They built a reputation with the member of staff. The thought of that member of staff being taken away and replaced by a machine was hit with a lot of negativity from consumers. The shift that's really happened over the last couple of years is consumers value the choice, the choice to check out or to interact with a brand, a retailer in the way that they want.
Matt Redwood: So now what we see a lot of retailers doing is focusing on giving consumers as many channels to shop within their stores or checkout within their stores as possible. So the role of the assistant has changed completely from just a member of staff and the checkout to really kind of a customer experience manager within the store. So the tasks that would normally be done by an assistant at a point of sale system will now be done by the consumer either on a mobile device or self-service checkout or a kiosk.
Matt Redwood: And that frees up that member of staff to actually deliver the right level of customer experience within that store. So I think the perceptional shift has been away from that machine is taking a member of staff's job to actually that machine is an option for me to check out of the store and it's freed up the member of staff to deliver a better customer experience somewhere else in the store where I wouldn't normally get it.
Amy Lombardo: So Matt, I wanted to comment on what you just said because I think about how when I go to my local grocery store and I use self-checkout all the time, maybe because I'm a control freak and I like to see what I'm actually scanning and paying for. I let my kids do it sometimes, but then I hear time and time again, you'll see certain generations that come up and they say, I don't want to use this, this takes longer. And there's always a problem with it. And I'm just wondering is that a perception issue? Is it a training issue? You know, can you comment on that a little bit in terms of maybe just generational preferences and using self-service?
Matt Redwood: Sure. I always say to retailers, deploying self-service checkout is not as simple as deploying a point of sale solution because innately it's a change in so many processes in your store. So we really refer to self-service checkout as a business change solution because it enables retailers A. To make their stores more efficient and but also B. Delivering a much, much better customer experience to their consumers. But the byproduct of that is because of the interaction is so different between the brand and the consumer, that retailer has to change so many processes in their stores for self-service to really be efficient and work well.
Matt Redwood: So things like cash management, how they staff their stores, how the staff interact with the customers, how their customers interact with them as a brand, all changes. So there's a huge amount of operational shift that has to happen. So I'd say a big part of getting self-service right is how you operationalize it. Ultimately it puts a lot more onus on the staff to deliver a better customer experience because you're taking away so much human interaction within the store. But when [00:07:30] staff do interact with consumers, it's that much more important that they deliver a much, much better service. So I think it's probably a combination of not just the technology but how you staff the stores, how you operationalize your stores. It all comes together to really deliver the right customer experience.
Amy Lombardo: Got It. And so in self-checkout or really varying ways to shop, it goes beyond just self-checkout. So there's smart phones, there's handheld scanning devices in the stores, [00:08:00] all of these different types of self service options. How have these changed the way consumers engage with brands?
Matt Redwood: Well, I think it's giving consumers a lot more choice in terms of how they do interact with the brand. If you think about a customer journey of a grocery shopper five years ago, they'd make the decision that they want to go shopping and that may be influenced by family or what they're going to eat tonight, what they have in the fridge. [00:08:30] They'd make the choice to go to the store. They'd shop that store, they'd pick their products, they'd go to the checkout, they'd check out and they'd leave.
Matt Redwood: Now what we're seeing is the customer journey is actually a lot more cyclical and yeah, retailers really have to focus on the digital journey. So how do I influence that consumer when they're away from my store, when they're away from my brand? So yeah, while they're watching type TV, how do I influence them to actually shop at my store, rather go to a competitor store and then how do I drive that consumer into that store [00:09:00] and enrich that customer journey when they get there?
Matt Redwood: So give them the choice to shop your brand in the way that they want. Once they get to your store, enable them to shop the store in the way that they want, but put the right technology in there to enrich that consumer experience. Apply the right level of staffing to the store as well to supplement that technology journey. Allow them to check out in the way that they want. I think now more than ever we're seeing retailers really put the most amount of choice in that technology [00:09:30] that consumers can use to interact with a brand than ever before.
Matt Redwood: But then it doesn't stop when they leave the store. Once they left the store, how do I influence that consumer to come back my store and actually driving the consumer into the store and actually making sure they come back is as a bigger part of the customer journey as the in store piece. So just giving the consumer a good in store experience isn't enough anymore. You've really got to enrich the consumer experience all the way around the circle.
Amy Lombardo: [00:10:00] Do we see custom retail apps tied into self service options? So I think of Target for example, and I have their cartwheel app and I always get special discounts given to me just through the app. And then a lot of times then it's for the ease of self service. So do we see that customized apps maybe have any type of leverage on how self-service is used?
Matt Redwood: Yeah, absolutely. So [00:10:30] when you think about a mobile app, and more than ever, every single consumer has a mobile, a piece of technology that allows them to effectively never go to a store again. But what retailers can do with that app is they can actually influence that consumer come to that particular brand or that particular store. And as you said that may be through personalized adverts, it could be through promotions or through a loyalty system. But ultimately that's an amazing tool for retailers to, I wouldn't say target [00:11:00] specific consumers, but definitely engage with consumers when they're away from that store or make sure they come into their store. And then really the use case flips because if you take the online second screening type of example of, I want to buy a TV. I might go into a store and look at TVs, but there I'll be using my mobile phone to second screen. And actually I'm researching prices all the time.
Matt Redwood: So I'm now a professional shopper because I'm price matching as I'm going through the consumer journey. So it's really important that [00:11:30] retailers don't shy away from mobile. They actually embrace it because consumers don't like to be forced down a particular path. They want choice and they want clarity as well. Clarity of what they're buying. Clarity of pricing. So really retailers have to accept that every consumer has that mobile device and really put a lot of focus on using that to enrich the in store experience.
Matt Redwood: Of course., as well, consumers could apply the application to allow them to actually shop the store. So scanning products and [00:12:00] actually use it as the checkout. So yeah, self-service checkout then becomes a supplement to a mobile application because it allows them to finalize the journey within the store, potentially pay cash or pay card or get help from an assistant or coupons or loyalty. So really the self-service checkout on the mobile device shouldn't be seen as competing technologies. They really supplement each other.
Amy Lombardo: That's an interesting way of looking at it. So when a retailer is ready to make the shift to self-service or they need to modify their existing plan, something's not working right, maybe they are ready to add on some new functionality. What's your advice on how that retailer begins? And I ask you this because I go back to one of your initial comments here was the over simplification of self-service solution. So you can't just set it and forget it. So you know, talk to us a little bit about some of those advice pieces.
Matt Redwood: [00:13:00] Absolutely. So really important, as I said previously, not to consider self-service checkout as another point of sale solution. And as you said, which I'm going to use actually set and forget. We don't want any sets and forgets because it's not a guarantee that our consumer is going to use that device. So if anyone wants any help with that process, we have some great advisory services where we work with retailers specifically on identifying the right solution to put into their stores A. For what they're trying to achieve as a [00:13:30] business but B. For their consumers. So staff from a data point of view work out what the trading profiles of your store are. Work out what you're trying to achieve by putting self-service checkout at the store. Is it efficiency, is it customer experience or is it just because everyone else is doing it or your biggest competitor is doing it?
Matt Redwood: That's quite an important [inaudible 00:13:51] to start from. And then I think really focused on the customer journey. So why do your shoppers shop at your store and what kind of customer experience are they [00:14:00] expecting? If you can nail those three points, then you can really identify what type of self-service checkout to put into your store. But then more importantly, how you operationalize it within your store.
Matt Redwood: So the landscape that we see now with retailers, particularly with retailers that are quite far advanced down the self-service checkout journey, they're not just putting one type of self-service checkout in to a store, they're putting three, four, five different types of self-service into a store and really focusing that particular solution [00:14:30] at a particular customer demographic. A. It delivers them the best operational efficiencies but it also delivers the best customer experience for their consumer, because it gives them the choice. So I would say focus on the operations and focus on getting the right solution for your stores and for your customers and then operationalize it in the right way.
Amy Lombardo: That was a good way of listing it out here for our listeners. So you talked about some of these new industries or just [00:15:00] the fact that retailers want to get on board if they're not there with self-service. Can you talk a little bit about maybe some of the unexpected types of industries that you're seeing? Because we all know of the grocery model or the C-store that it's pretty easy to grab something quickly, pay and go. But what are some of those like unexpected industries?
Matt Redwood: Sure. Self-service has been around for almost 15 years in the grocery industry, but for the first time I think retailers outside of grocery are starting [00:15:30] to sit up and notice self-service checkout as a way of enabling them to deliver the right in-store experience. So we're talking to fashion retailers, the petrol retailers, the GM retailers, the DIY retailers. Ultimately there should be no bounds to self-service checkout. The same person that shops in a grocery store is going to be the same person that goes to the DIY store on a Saturday because they're renovating the house or goes to the petrol convenience store because they want to buy petrol for their car [00:16:00] or takes their family shopping and goes through a fashion retailer. It's the same consumer. So I think we as a supplier to the industry really need to realize that actually every consumer is the same whatever shopping type their shopping in. And so if a consumer is demanding self-service in a grocery environment, why wouldn't they expect it in any other shopping environment?
Amy Lombardo: I think it makes our lives much easier and it gives you that piece of empowerment and control your shopping experience a little bit. If you're making the list [00:16:30] and you're checking your coupons, why shouldn't you just be able to finish the transaction as well? But maybe that's just me.
Matt Redwood: I completely agree.
Amy Lombardo: So Matt, I think this is a good place to wrap up our discussion today and I thank you for joining us here and sharing your insights. And to our listeners out there, if you're interested in more information on self service and retail, go to dieboltnixdorf.com/retailgrowth or click on the link in the podcast show notes. Until next time, please keep checking back on iTunes or however [00:17:00] you listen to podcasts for new topics on COMMERCE NOW.