Capitalising on a trading high, Sainsbury’s has announced it will adopt a new investment strategy into automation to slash £1bn worth of costs over the next three years. This will take the shape of an increased reliance on customer self-service tills, warehouse robots and AI forecast tools, indicating that the supermarket giant is betting on innovation as a path to growth.
Alongside similar measures taken by Co-op, who this week announced they’d be boosting their self-checkout tills with AI technology, the Sainsbury’s move hints at a long future for customer self-service.
Not all customers are fans of having to check out their own shopping. Yet, to justify the move, Chief Executive of Sainsbury’s, Simon Roberts, stressed, “We have got to find better ways of doing things.”
Away from supermarkets, self-service is becoming the new normal, with numerous businesses relying on AI chatbots and online knowledge bases to help customers find their own answers, rather than speak to an actual human. However, exclusive data from Startups.co.uk presents a sobering reality. Of 546 business leaders surveyed, 34% noted they prioritised strengthening customer relationships to capitalise on opportunity, above the 26% that look towards innovating products and services first.
Why self-service isn’t always the answer
The new strategy uncovered by Sainsbury’s was cited as a move away from legacy systems that were slowing down the group’s operations and leading to more waste than necessary.
While the automation and AI craze has spurred many executives to praise the technology’s productivity powers, the formula does not compute well in the retail industry.
Last year in November, supermarket chain Booths decided to remove almost all self-service checkouts and repopulate tills with human staff. While the move was justified as a measure to curb shoplifting, it was also informed by customer feedback that expressed a preference for human-led customer service.
The move to reduce self-checkout tills may be welcomed by staff, too. A report found that close to two-thirds of remaining staff felt overwhelmed by the number of machines assigned to them. As the number of self-service terminals increases, so does human staff stress and the impact on customer satisfaction.
Risks of self-service in retail
Unsurprisingly, studies have shown that self-service tills are more conducive to theft. It’s as much as 21 times more likely for a shoplifter to get past a machine than a human, according to one report.
The Co-op move to boost its tills with AI systems seeks to address this growing shoplifting trend. According to statistics, approximately 4% of items scanned at self-checkout systems are not paid for and retailers experience a 50% higher rate of loss when using self-checkout systems.
Theft can simply be customers deliberately not scanning an item, or keying in the code for a cheaper item instead of the proper one, leading to high rates of missing inventory.
How to strengthen customer relations without relying on self-service
Disruptive technologies and innovation are not always synonymous with a ‘better way’ of bolstering magnetic customer retention rates or boosting profits. Rather than dismissing legacy systems, also known as ‘humans’, retail businesses are better off backing methods that will prioritise customer service.
To retain the integrity of customer relations, you can:
- Reflect on what your customer pain points are: whether it’s the frustration of not being able to find the right pastry on the Sainsbury’s self-checkout or scanning the wrong types of apples, put yourself in the shoes of your customer. If the data is telling you customers dislike self-service options, don’t force the technology on them.
- Flexibility in communication: offer various ways for clients to reach out and make sure you’re accessible. Adopting a self-service AI chatbot might be tech savvy, but if customers are stuck and unable to resolve their queries, all of a sudden your competition starts looking very alluring.
- Train your team: employees are the frontline representatives, so it’s always a good idea to invest in their training and their communication skills to ensure they have a client-centric approach. Invest in improving their communication skills to ensure a client-centric approach. You can also teach them conflict-resolution skills to help them deal with angry or problematic clients.