April 29, 2004

It's a do-it-yourself world

Nice cover story from USA Today.

It's a do-it-yourself world
By Bruce Horovitz, USA TODAY
You shuttle the hungry horde to McDonald's. The kids dash to the Playland and disappear inside that climbing contraption. Your parental duty is to get them McFood fast — but you feel queasy about leaving them alone.
Home Depot customers in Philadelphia scan their purchases.
By Eileen Blass, USA TODAY

Then, you see it: a kiosk.

More precisely, it's a self-service kiosk for ordering food. This one's smack in the middle of Playland. You order grub for the gang by touching the screen. You pay for it by sticking cash — or a credit card — into the machine. And an employee brings you the french-fry-laden feast — and your change.

This isn't McPie in the sky. These self-service kiosks are being tested at six Denver locations and one in Chicago. "It's a parent-saver," says Christa Small, director of restaurant innovations for McDonald's.

It's also the latest, real-life example of how — with an assist from technology — America is oh-so-rapidly evolving into a self-service nation.

Self-service used to be for paupers. Now, it's for kings, too. Billions upon billions of dollars are to be saved — or made — in the New World of self-help.

Sales from self-service kiosks of all kinds — from those that sell airline tickets to those that place food orders — topped $161 billion last year and could reach $1 trillion in 2006, according to IHL Consulting, a technology research firm.

By Robert Deutsch, USA TODAY
A self-service laundry in Queens, N.Y.

Many self-service gizmos that used to be novelties are common. They're at the ballpark — dispensing tickets. They're at the library — checking out books. They're at ski resorts — spitting out lift tickets. And they're common as carrots at grocery store checkouts.

Some 95% of U.S. supermarkets will use self-checkout of some sort by 2006, estimates IHL. That compares with 6% five years ago.

But nowhere is it more common than at the airport.

From 2001 to 2003, there's been a 78% increase in the number of people who use kiosks to check in at airports, says Forrester Research. The labor-cost savings to the airlines: an average $3.52 a person. The stress savings to people: priceless.

Just do it yourself

"Consumers have given up on the notion that a business will do something right," says Watts Wacker, futurist at First Matter, a consulting firm. "Things go much better when you do it yourself."

That's why 75% of adults ages 18 to 24 say that at a fast-food drive-thru they'd rather place their order on a kiosk or touch screen than over an often-hard-to-understand speaker, says Hudson Riehle, senior vice president of research at the National Restaurant Association.

David Govaker almost always prefers self-service — particularly at the airport. The health care executive and frequent business traveler from Arlington, Va., prints his boarding passes at home.

"The last and only time in recent memory that I used a human to check me in, the airline dude gave me the wrong boarding pass, so I was accosted by security when my ID didn't match my ticket," he says.

Self-service is touching each of us — particularly frequent travelers — from the airport to the car rental to the parking garage to the hotel.

But the universe of potential self-serve businesses is expanding. There are self-serve dog washes in Oklahoma City and some cook-it-yourself restaurants where customers pay hefty prices to stand around and grill their own steaks.

Behind this: companies aching to save costs on the backs of abiding customers and an evolving, Google-ized, eBay-loving America that seems to want self-service for everything. The world of self-help has come a long way since do-it-yourself gas pumps and ATMs.

"It's a manifestation of our growing distrust of business," insists Wacker.

But where will it stop?

As far as Lawrence Dvorchik is concerned, it won't. Last weekend, his company, KioskCom, hosted a conference in Las Vegas of more than 100 top corporate users and makers of self-serve kiosks. The focus of this year's convention: how to keep kiosks from breaking down. Nothing drives the self-serving consumer crazier than bum equipment.

That's why Chris Meleg, a technology product manager from Houston, has stopped using it at the local supermarket.

"It never works," he gripes, "and you always have to have someone come over and help because the computer is convinced you are stealing."

Avoiding incompetent clerks

But others say self-service beats the alternative: dealing with incompetent workers.

"There are so many people in customer service areas who have no social skills," says Sue Reiss, a sales manager who lives in the Florida Keys. "They make the experience more unpleasant than handling it myself."

Because of Reiss — and millions of consumers who share her sentiments — America is coming closer to becoming a society of self-serve solitude. Many companies — eager to save on labor costs and respond to consumer demand for self-empowerment — are happy to oblige:

•Airlines. Just five years ago, self-serve check-in at airports was virtually unknown.

By May 2003, half of Northwest Airlines' customers were using it. Last month, nearly 75% used it. Northwest expects 80% by the end of the year.

While most airlines have kiosks, Northwest has kiosks in more airports than any other airline.

"It's empowering," says Al Lenza, vice president of distribution and e-commerce. "People like to browse and claim the aisle seat."

Over the past five years, Northwest has spent $10 million on self-serve check-in equipment. It's been so successful, the airline is testing self-serve options curbside.

The Northwest parking garage in Detroit has a self-serve check-in kiosk, and its garage in Minneapolis has self-serve luggage check-in.

•Hotels. While self-service hotel checkout has been available for years, only recently have hotels begun to test self-serve check-in.

After testing it last year at the W New York hotel and Sheraton Boston, the Starwood hotel chain this month began to try it at the larger Sheraton New York Hotel and Towers.

Without stopping at the front desk, arriving guests can also change the type of room they want — or even the view. "Consumers are showing us they want self-service everywhere," says Steve Hankin, chief marketing officer.

Marriott is testing self-check-in at three locations — after testing and nixing it several years ago. But most guests still prefer to check in at the front desk, says Mike Jannini, executive vice president.

Many hotel kiosks have glitches. "Hotel kiosks are not ready for prime time," says Henry Harteveldt, vice president at Forrester. "They lag behind the airlines."

•Retailers. In 1999, Stop & Shop tested a single self-serve wand at a checkout stand in Massachusetts. No one used it.

"It wasn't a self-service world yet," says Maryann Sclafani, project manager for self-checkout.

Today, Stop & Shop has self-service lanes in slightly more than half of its 340 stores. And one in five customers is using the self-service lanes. Every new Stop & Shop Superstore is installing them. Eventually, Sclafani says, all Stop & Shops will have them.

Some customers swear by the technology — others swear at it.

Bonnie Royle, a pension plan administrator from Tucson, accidentally placed a gallon of milk on top of the tomatoes she had scanned while using the self-checkout lane at her grocer. When she went to retrieve the damaged produce, the machine embarrassed her by barking: "Put the tomatoes back in the bag!"

'Far, far bigger' than anticipated

At Home Depot, self-checkout has been a huge hit with the chain's do-it-yourself clientele.

While most large grocery stores with the option see about 20% of sales in the self-checkout lanes, Home Depot stores with the self-checkout option are boasting 34% of their sales in those lanes.

"This is far, far bigger than we anticipated," says Bob DeRodes, executive vice president of information technologies. Self-checkout is now in slightly more than half of Home Depot's 1,540 U.S. stores.

Other plans for self-checkout? "Well," says DeRodes, "my son thinks the self-checkout machines should say, 'Have a nice day.' "

•Tax services. At H&R Block, all its forms of online tax preparation are at 40% of its business this year. That's expected to nearly double within the next few years, says Mark Ciaramitaro, vice president of e-solutions.

This has forced H&R Block to broaden its online tax offerings and to bow to customers' demands for various hybrids of self-help and professional help with taxes. "It's like building your own desk but having a carpenter come give some pointers," says Ciaramitaro.

•Restaurants. Self-service isn't just about high technology. At some restaurants, self-service means putting on the chef's hat and cooking your own dinner.

Such is the case at Prime Quarter Steak House, which began with one location in Madison, Wis. — and now has seven in the state.

But self-service doesn't mean cheap. All self-cooked steaks — from T-bone to filet mignon — fetch $16.95. The restaurant has four grills that can accommodate up to 30 customers at a time. It's a social affair.

"People come in and make friends in minutes," says owner Al Sanger. "And you don't have to wait for a waitress to take your order."

The waitress does deliver the side orders and drinks, however. And still expects a full-service tip.

•Dog wash. Self-service has even become Fido-friendly.

Barney "Mac" Brown saw a woman hosing down her dog at his self-service car wash in Oklahoma City. He warned her that the high-pressure hose could harm her dog. But she said her dog was too big to fit in her sink and too big to lift into her tub.

So Brown, 84, enclosed one car-wash stall and converted it into Mac's Self Service Dog Wash. The dog wash comes with wash tubs, hoses and hair dryers.

A dog wash costs about $6 — a far cry from the $40 that many pet groomers charge for a bath. The wash took in $1,600 in February. Brown has plans to open one next to the city's new dog park.

"This could be bigger than the car-wash business," says Brown. "And noisier."

USATODAY.com - It's a do-it-yourself world

Posted by Craig at April 29, 2004 04:37 PM