Wednesday, May 20, 2015

Celebrate, or condemn, this self-service economy?

I have blogged about:
  • grocery stores, especially the small-talk
  • robots and automation
  • self-service future; remember this?
  • reading the Economist
  • watching television
In this post, I can bring them all together--hey, understanding the cosmos is all about connecting the dots, right? ;)

Every once in a while, I catch re-runs of That '70s Show.  Sometimes, I even stream it on Netflix as I work.  In one of those episodes, two hormone-raging teenage males decide to hit on, and pick up, married women at the grocery store--the Piggly Wiggly.
When watching the episode, I thought it was a fictional store, like how the town where they lived, Point Place, was a fictional name.

Now I know better.  Piggly Wiggly is for real!  I learnt that from reading this piece in the Economist, which argues that "businesses should think carefully about continuing to heap work on their customers."  The report begins with:
IN 1916 Clarence Saunders changed the face of retailing when he opened his first Piggly Wiggly supermarket in Memphis, Tennessee. Hitherto, shops had kept all their goods behind the counter: customers told the staff what they wanted, waited while their purchases were bagged up, then handed over their money. Saunders came up with the idea of self-service. Customers selected their own groceries from the shelves, and took their baskets to a cashier on the way out. Saunders proclaimed that by cutting labour costs his idea would “slay the demon of high prices”.
Who woulda thunk that!  Piggly Wiggly is for real.  And it began in Tennessee.  And it was nearly a 100 years ago that this idea of self-service began.  "as an idea it has conquered the world" indeed.  That Saunders was way ahead of his time, eh!

You thought I waste time watching TV! ;)

The self-checkout at grocery stores is merely taking the 100-year old idea to the next level.  And, of course, not going to the store but clicking the order from home and have somebody deliver it is all in that same continuum. As the Economist notes, "The variety of businesses touched by the self-service revolution is ever greater." The magazine includes its unique humor:
Before long, no doubt, self-service barbershops will invite customers to pop their heads into a clipping machine and turn a dial to select the severity of the cut.
Thankfully, I will be gone long before that--and I don't have to miss all the joyful small talk at the haircut place ;)

But, ... yes, there is always a but!
The rise and rise of the self-service business raises two worries in particular.
What are they?  For one:
Consumers are being ever more clearly divided into a “cattle class”, herded into the back of the cabin and offered precious little service, and a pampered “business class”, for whom no amount of fawning is too much.
Well, some people do not care about such inequality.  However,
Not only might this intensify resentment of the haves by the have-nots; it also robs the have-nots of entry-level jobs. 
Any other but?
The second worry is for businesses themselves. If they never meet their customers, they will lose touch with them.
 So what, you ask?
 although self-service is great for saving costs, its effect over time is to train customers to shop on price, and thus to switch as soon as a slightly cheaper rival comes along.
Maybe I need to stop reading and thinking, and instead do what those teenagers in That '70s Show always did! ;)


Ramesh said...

I hate the self service mania too - thankfully it will be a long time before it comes to India where we have a parking meter and an attendant standing next to it !!

I cannot understand it from a business perspective too. You make no personal contact with the customer and then spend a billion dollars on advertising on TV. Where is the cost benefit equation ??

Wait - if they are using workers on zero hour contracts as your first line with the customer, then I can understand - a pissed off employee if your worst person to have customer contact.

Frankly I think the service industry's obsession with cutting workers is completely crazy, even from a cost perspective. They'll learn the hard way that there is no substitute for human customer contact.

Anne in Salem said...

Grocery stores, banks, cinemas - it seems most businesses are going for self-service. I avoid self-service when I can since I feel like I am depriving someone of a job. Isn't ordering your groceries online more like the old system of the store collecting your goods for you?

Good thing we live in Oregon, the land of full-serve gas stations.

Sriram Khé said...

Oh come on ... no fun if we are all in agreement ;)

I hate to tell you this, Anne ... it is only a matter of time--a few more years--when Oregon, too, will join the rest of the union on gas stations. It is starting with the "rural" areas ...

Ramesh, yes, it will be a long while before the human contact will disappear in India ... the good thing for me is that my clock is winding down ;)

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