The $92bn opportunity in store for Australian offline and online stores
The saying goes, if you need something done right, do it yourself. And today's shoppers are doing just that. Welcome to the latest version of retail checkout efficiency, in the form of self-service kiosks.
American retailers are having their best run since 2017, with strong sales across categories. As the boundaries between the digital and physical worlds disappear, retailers in all areas are aiming to offer customers an efficient, fluid shopping experience. That often means speeding up checkouts and breaking up lines, and as a result, kiosks are sprouting up everywhere.
Quick service restaurants (QSRs) are jumping on this bandwagon faster than a six-armed burger flipper because of the results. Panera found that its visits were up 12% after introducing self-service kiosks. Orders at kiosks are generally heftier too, according to the 2018 Tillster's Self-Service Kiosk Index, since customers who order at kiosks typically spend 15-30% more. Even Amazon is getting into the game this year, allowing customers to pick up online orders and drop off returns using self-service kiosks and lockers.
Why the new interest in self-service? The answer is rooted in human psychology. With a smartphone-loving generation, consumers are more comfortable interacting with a screen than an actual person. The social exchange can trigger insecurity and inhibition. And, in a restaurant setting, you have the sensitive topic of food and imagined or real judgements — a recipe for a less-than-perfect eating experience. But a kiosk or other self-checkout tool bypasses many of these factors, and customers respond well to that. It also cuts out the pressure to order quickly and puts ordering power back into the hands of the customer.
There are plenty of other theories about why people seem to spend more around machines versus humans. One is that the touch aspect makes the ordering process more interactive and fun. A 2017 study found that the intention to purchase using a touchscreen differed from others since it triggered a more experiential feeling than a simple utilitarian one. Which means it involves impulse and not the rational thinking you'd use for a more thought-out purchase.
While it does seem like more fun to order from a food-filled ATM, the next best explanation is that people choose more when they have more time to dwell on their options. Add avocado and double sour cream? Why yes. With a few more seconds, a consumer will add more items than they even knew they wanted in the first place.
The current landscape of kiosk technology runs the gamut — from fully automated service at Eatsa to novel combinations of humans plus kiosks at Shake Shack. But things are changing quickly. The self-service technology market is set to hit $31.75 billion by 2020, according to Allied Market Research. In fact, McDonald’s CEO Steve Easterbrook said in a 2018 earnings call that the burger chain would be increasing its kiosk presence at US stores, upgrading 1,000 restaurants with the new technology each quarter for the next eight to nine quarters. Seems like the next iteration of the modern restaurant is already at your (self) service.
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