Retail Self-Service Kiosks: Innovation Continues
Release Date: 08/23/2021
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In this special episode of COMMERCE NOW, Elliot Maras, editor from Kiosk Marketplace and Matt Redwood, Director of Advanced Self-Service Solutions at Diebold Nixdorf discuss the continuation of innovation in retail self-service and how self-service can offer a better customer experience.
Retail Customer Experience.com - https://www.kioskmarketplace.com/podcasts/expert-offers-insight-on-how-self-service-improves-the-customer-journey/
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Speaker 1: In this special episode of COMMERCE NOW, our very own Matt Redwood, Director of Advanced Self-Service Solutions, joins Elliott Maras, the Editor of Kiosk Marketplace, where they will discuss self-service innovations, and how [00:00:30] retailers rely on self-service for a better customer experience.
Elliott Maras: Welcome to self-serve kiosks. The innovation continues. The consumers have spoken. Not a day goes by that a new self-service solution is not introduced.
In recent years, restaurants have taken a very visible role, introducing self-serve kiosks. In addition, retailers, from high-end department stores to supermarkets [00:01:00] to convenience stores, are relying on kiosks to serve customers faster and offer a better customer experience.
This past year, COVID-19 avoidance of human to human interaction has pushed retailers to offer more self-serve kiosks. I'm Elliott Maris, the Editor of Kiosk Marketplace. Joining me today is Matt Redwood, Director of Advanced [00:01:30] Self-Service Solutions at Diebold Nixdorf.
Matt, how did we get here? What did retailers see, that made self-service journeys so necessary?
Matt Redwood: I think one word really kind of encapsulates the journey that retailers have been on with self-service, and that's flexibility. When you look at the journey that we've been on as an industry with self-service, in the very early days, it was very much about [00:02:00] removing cost, removing labor, from the front end.
If you look at why retailers are really deploying self-service now, and how they're deploying them, it's really more focused on how they can deliver a much more flexible operating model within their stores. So rather than stripping staff out of the stores as a cost saving, they actually redistribute those staff. Because what they've realized is we've got to a critical mass now, where consumers want, demand, and expect a self-service offering in the [00:02:30] store. They very much see it as a faster, easier way of checking out in a store, that gives them much more control over the interaction with that retailer.
And that's a very, very important point, because if the consumer is demanding that, the retailer no longer has to push that as an offering that that is being driven by their own demands, and what that means is they can then take staff that would ordinarily be serving the customer, and they can put them into other parts of the store, to deliver the best consumer [00:03:00] experience. So if you look, a lot of data, particularly around self-serve kiosks, some of the bugbears of consumers is that they have to queue to check out or interact at the front end, or there isn't staff where they want it, either in the aisles or in the main body of the store, where they expect a good level of service. And self-service really ticks those box, because it allows retailers to put higher density of checkouts or order points [00:03:30] within the store. That in turn will reduce the amount of queues, increase the throughput through the store, so you get a better consumer experience, and it frees up staff to then go and provide a different functionality within the store, or a consumer experience, better consumer experience elsewhere in the store.
So it really delivers against the two big bugbears of the consumer, as well as gives the retailer much greater flexibility, and I think the flexibility piece has really been [00:04:00] key over the last 18 months, in terms of, if you look at the different changes in rules and regulations and shopping habits and consumer trends that retailers have had to contend with, the self-service device has really given them much greater flexibility to be able to deal with those changing trends on a daily basis.
Elliott Maras: Are successful retailers done, after they've implemented self-service across their footprint?
Matt Redwood: Absolutely not. So, the [00:04:30] really interesting thing about self-service, is that it bridges two very fast-moving industries.
One is consumers, consumer expectations, consumer trends, and the second is technology, and if you think about those two entities, they both move at an incredibly fast speed, and what that means is the retailer has to constantly move. They have to constantly change. They have to constantly adapt. They have to constantly upgrade and evolve their experience [00:05:00] within their stores, to keep up with both technology that's moving extremely quickly, but also consumer demands, which evolve extremely quickly. So I don't think there's ever a self-service environment or deployment that sits still for a very, very long period of time. It's a constantly evolving, constantly changing landscape, and retailers have really got to stay on top of that.
If you look at the marketplace today, it's very much about differentiation. So it's [00:05:30] not just about putting self-service devices into a store. It's now about putting the right self-service combination for your store, and actually tailoring that offering to that particular store. But more than that, what other innovation or other technologies can you bolt on to self-service, to enrich that consumer experience even even further? And I think there's a bit of a race at the moment for differentiation and consumer experience, so retailers are constantly looking, constantly evolving, [00:06:00] constantly adding to the self-service experience, to try and differentiate themselves and their brand from their competition.
Elliott Maras: If expectations from consumers are to be more in control and achieve greater speed and efficiency, how can a retailer improve an existing self-service journey?
Matt Redwood: So I think there's a couple of things to look at here. Obviously, a retailer will always want to sweat the asset for as long a period as possible, [00:06:30] but trends change. As I said, consumer trends change, technology trends change, and just expectations in terms of service offering changes within a store. So there's a lot a retailer can do to constantly evolve the self-service devices that they currently have in store.
I always say, which is sometimes an unpopular opinion, that the technology is easy, but getting a self-service device up and running is the easiest bit. Operationalizing that technology is the bit that really delivers the most amount of value. And if you [00:07:00] think about the moving parts associated with operationalizing a device within the store, it may be changes to staff, or efficiency of staff, and maybe different consumers, different proficiency levels, different times of the day, therefore different peak or different stresses on that particular store, and there's a lot that retailers can do operationally to improve the performance of the devices within the store.
The second piece is evolving the actual technology, and if you think about [00:07:30] a common trend that's talked about a lot, cash, the demise of cash, everyone talks about the demise of cash, but if you look at cash utilization from a global perspective, it's disappearing or not disappearing at different rates in different markets, different geographies, even regionally within certain countries. So retailers have really got to think about how they evolve the technology over a period of time, to react to some of those changing trends.
[00:08:00] The third piece, I think probably the most important, is really a shift that we've seen in the last 18 months, which is a diversification of what we would consider self-service, and if you think five or 10 years ago, retailers had the choice of a cash card self-service device or kiosk and a card only version.
Now, if you look at the technology landscape, you've got mobility, you've got personal devices that the consumer may want to use and shop within the store. [00:08:30] You've got mobility, you've got kiosks, you've got traditional self-service, and you've got everything in between. So it's extremely difficult now, I think, for a retailer to find the right combination of technology for each one of their stores. So even retailers that may have "a legacy estate" can still do a lot to actually introduce new variants of self-service device, maybe focused on different consumer shopping journeys, or shopping habits, really with the view of driving more [00:09:00] to a hundred percent self-service stores, and driving more self-service utilization.
Elliott Maras: All right, Matt, which retail verticals or segments are most proactive in introducing self-serve kiosks?
Matt Redwood: So from a kiosk perspective, it has to be hospitality, so the fast food environments, where it lends itself to an order and pay kiosk. If you look at some of the big brands that do [00:09:30] either dine in or takeaway fast food, they've really focused in on moving a lot of that on-site order process to kiosks. And what that's enabled them to do is really pivot, and change the focus of their staff in stores, more to the order preparation, the cooking, or serving the drive-through. So it's really enabled them to drive a much, much greater efficiency [00:10:00] within their stores, and how they utilize staff.
The other thing that I think a lot of fast food retailers that have moved to an order and pay kiosk within their stores have managed to benefit from, is an increase in revenue. We see a much larger basket size when consumers are utilizing a kiosk than when they're being served by a member of staff, because you always have the up-sale option. The kiosk will never forget to upsell. It's always there, so it's always going to push the [00:10:30] consumer to spend more.
So from a kiosk perspective, hospitality absolutely. But what's interesting is, a lot of the retailers that have deployed traditional self-checkout devices, so your tier zero, tier two grocers, are now actually looking at more kiosk-based technology for other areas of their store, so either in their ... if you're in a convenience offering, or clothing and home, or technology, or even customer services side, they're looking more towards the [00:11:00] kiosk business which was traditionally in hospitality, and actually using these usually larger form factor, larger screen devices, to deliver a more enriched consumer experience, in other areas where they could deliver a self-service journey.
Of course, a lot of these retailers also have a hospitality offering as well, and we're seeing that overspill of self-service into hospitality in that grocery sector as well.
Outside of hospitality [00:11:30] and grocery, we're starting to see a huge amount of uptake in two other sub-verticals. First is fuel and convenience. So, a big, big push at the moment to get experimental self-service kiosks into stores, not only for the kind of traditional self-checkout offering, but also for upselling purposes, for loyalty, to buy coffees, or to buy a carwash token. [00:12:00] So there's a kind of one-stop shop in one device, and then finally, in fashion retailers. So in retail environments, where it's more about the experience, and you want to deliver the best experience for that consumer, utilizing their kiosk in a large form factor, so that's about the efficiencies, which has really been the driver in a convenience of a grocery store. For fashion retailers, it's really about how do we free up staff, and how do we deliver the best [00:12:30] in-store experience?
So some very strong sub-verticals that are continuing to push more self-service, and we're now seeing some emerging sub-verticals that are starting to adopt the kiosk as well.
Elliott Maras: Okay. Well, how important are contactless and touchless options for customers?
Matt Redwood: I think extremely important. So if I break it down into two areas, if I may, that the contactless piece, [00:13:00] particularly around payments has been absolutely crucial for self-service adoption, particularly over the last 18 months to two years. The number one bugbear for consumers is spending or wasting time when they're trying to check out, or they're trying to use a piece of technology in store, and particularly for the card only transactions, contactless payment as a tap and go method, we've really seen a huge, huge boost in that [00:13:30] utilization, as consumers recognize it as a much faster way of transacting and getting out of that store. Obviously the shift from cash to card has also accelerated that trend even further.
The other side of the coin, what we call at DM a low touch to no touch, so utilizing a self-service kiosk, but actually utilizing it in a way that drives as little contact between the consumer [00:14:00] and the device as possible, has been really important, particularly over the last 18 months in the pandemic, to a, build consumer confidence to actually use the technology in the store, but also to drive more transactions through self-service.
So we've put a lot of effort and time and resource and money into working with our retail customers to actually optimize their self-service process, to reduce the amount of button presses and physical [00:14:30] contact between the end consumer and the device from a cleanliness and a safety perspective, but also, as I said, to build that confidence within that consumer, and we're now actually getting to the point where we're getting to a no touch kind of mentality, where consumers are actually really willing to use their own devices in conjunction with a self-service device in store, to even minimize that connection even further.
Elliott Maras: Well, at this [00:15:00] point, I'm sure a lot of our listeners would like to know, how can a retailer prepare to introduce self-service and what are the most important steps?
Matt Redwood: It's a really good question, and it's the question that we get a lot. The common misconception, or the pitfalls that a lot of retailers fall into when deploying or embarking on deploying self-service into their stores, is they focus on the technology. So they go straight for the technology, [00:15:30] and try and get the technology up and running. But as I said before, that getting the technology integrated and working with the right level of functionality is arguably the easy bit. Actually making sure that you're putting the right technology into the right stores for the consumer journeys that exist in that store, operationalizing it and utilizing your staff in the right ways, is really, really the crucial bit, and the one thing that I would say, or the process that I would urge any retailer that's looking to embark on this process, [00:16:00] is twofold.
Number one, work out what you're trying to achieve. So putting self-service into your store for the sake of technology. It'll work, but you probably won't drive it to a satisfying goal. Work out what you're trying to achieve, and more crucially, what you're trying to fix or solve within your stores. So it may be that you've got a problem with queuing, or your customer experience is not as good as it could be, or you've got a problem [00:16:30] with cost of staff within your store. Once you work out what you're trying to achieve, it gives you a goal to focus on. It also gives your supplier and all of your staff, a goal to work towards, to drive the best from that project. Once you've identified that problem statement, we would always urge to start with the data.
So analyze your store data, and at Diebold Nixdorf, we have a process called Storevolution Advisory Services, where we work with retailers on analyzing their [00:17:00] stores. We understand the trends within the stores, so the throughput, the peaks, the non-peaks, and the basket sizes, the tender type, and you can very, very easily and quickly build up a view of what's happening in that store, how consumers are shopping, and therefore what's going to be important to them.
It's only once you get to that point, I would then say, focus on the technology. So we've really done a lot of work up to this stage to understand what are we trying to solve within the [00:17:30] store, and how is the store currently operating, and how is the consumer shopping? Once we build out that picture, we can then put the right combination, and I say combination, because I think we've gone beyond just putting one type of self-service checkout in a bank of four within the stores, and it's very now about cherry picking the right combination of technology, and building up the right service offering, for each one of your stores. So it's very much about tailoring the technology [00:18:00] to your stores rather than a one size fits all, and you can do that very extensively in a data world, if you're using a data-driven approach.
Once you've chosen and selected the combination of technology you want to deploy, I'd then really focused on operationalizing it, and there's a few points that really get overlooked. Things like staff training, are really, really crucial, particularly when you're trying to change the consumer shopping habits and customer journeys in your store [00:18:30] so dramatically. Getting the staff buy-in, getting the store managers buy-in, is extremely important, and then training those staff to effectively train your end consumer. They're the ones that deliver the good experience when you have that potential, that the experience could be bad. If you get a particular consumer that's not particularly proficient with technology, or they're not particularly confident, having a member of staff that can take them through the process on that first go, deliver that good experience, will often mean that [00:19:00] that consumer feels comfortable to come back and use that device again.
So getting your staff trained, getting their buy-in, getting them focused on the fact that these devices are not there to take their jobs away. It's really in addition to them, so that you can deliver the best consumer experience, is a really, really important message to drive right away across your business.
The other thing I would say is that self-service and deploying self-service successfully, is a real [00:19:30] change to how you run your stores. It's a change in the way your staff operate. It's a change in the way that you interact with your consumers. It's a complete change to the consumer journey, and it's a change in the general operating model for your stores, and you have to have that momentum within the business that this is not a technology project, where I'm going to put a piece of technology into the store, and it will get used. You really need to look at every aspect, every process within your [00:20:00] business, and make sure that self-service is dovetailed into that in the right way.
Elliott Maras: Well tell me, Matt, what should a retailer look for in a self-service technology partner?
Matt Redwood: There's a couple of things to look at, and I'll start with the technology itself. As I've said before, it's a diverse landscape now from a technology perspective, so when you're choosing your vendor, it's very important that they have the flexibility within their portfolio, that you may want [00:20:30] different formats, self-service device, different self-service offerings, in each one of your stores, depending on the store format or size or location, so it's very important that they have the flexibility in their offering, that you can pick different technology offerings for each one of their stores, or different combinations for each one of your stores, without driving huge costs.
So a modular hardware approach, as an example, gives retailers a lot of flexibility, in that they don't have to have the same device in [00:21:00] every single store. They can flex up or flex down the technology, the performance, the cost, depending on the store.
The second aspect of that, is really around the software. So much of the consumer experience, or the good consumer experience, I should say, is delivered by the software. So having rich feature functionality software, backed up with a very, very good innovation roadmap, is extremely important.
As I said before, there is a race to differentiate [00:21:30] the service offering in stores, and therefore having a supplier that has a rich innovation roadmap that you can input to and have a certain control of your own destiny, is also extremely important. But additionally to that, having things like open APIs is fantastic. It means that you can take control of your ecosystem. You can plug different technologies into the self-service platform, and really create your own offering, and that very much fits to the strategy that that Diebold Nixdorf has created.
[00:22:00] The last piece and another one, it's another aspect that is often overlooked when deploying self-service, is the service element. If you're going to transition a large portion of your consumers through self-service devices, self-service devices are generally more complex than, say, a staff device. They're also bashed about a little bit more, because you've sometimes got untrained consumers, they don't necessarily know how to use them, and therefore getting [00:22:30] a service offering that means those lanes are up and running for the maximum time possible is extremely important, and that really goes hand in hand with the technology. You've got to have the right technology, it's got to be deployed in the right way, and then you've got to have the right service wrapper wrapped around it to make sure that that technology is up and running for the maximum time possible.
If you're pushing 70, 80% of your transactions through three or four self-service devices in your store, and one of those lanes goes down, you've lost 25% [00:23:00] of your capacity. The knock-on effect of that is you're going to get queues build up, it's a poor in-store experience, you're going to get disgruntled consumers, they're not going to come back to your store because it was a bad experience. So you've got to really make sure that you've got a very, very solid service wrapper wrapped around the technology, to drive the highest lane availability.
Elliott Maras: Well, I think this takes us to the end of our allotted time. Matt, thank you for that excellent input. I thank our listeners for joining us.
[00:23:30] This has been Self-Service Kiosks. The innovation continues.
Speaker 1: Thank you to all of our COMMERCE NOW listeners, and if you're looking for more podcasts just like this one, log on to www.commercenowpodcast.com