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Chairman of Marks & Spencer plc

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I had a fantastic speaking engagement in Berlin this week, courtesy of Qmatic, about which I will write next time. For the moment there is a burning issue which I feel the need to share with you.


My entire trip, my customer journey through Birmingham airport, breakfast in Weatherspoons, flight with Flybe and on to Hotel ZOO in Berlin was brilliant, marred only by the memory of one suboptimal experience.


W H Smith.


W H Smith’s travel business has grown steadily providing convenience retailing of “travel essentials”, namely, reading materials, confectionery and soft drinks for travellers like me in airports and railway stations across an increasing number of locations.


But when did the Head Honchos at W H Smith decide that their proposition was so compelling that they could remove any aspect of service from the process and “get away with it”?  Can there really be no impact on the brand’s credentials in the High Street?


Ironically, my gig in Berlin was to talk about the noble goal of seamless and connected customer journeys so the trip through W H Smith was a timely reminder of the harsh realities that consumers can face as the unintended consequence of a retailer’s actions.


Self-service check outs can be a great thing. One of David Maister’s golden rules, that occupied time feels shorter than standing around waiting for a belted till (I paraphrase), tells us that even if checking out for ourselves takes longer it feels shorter. Meanwhile, any of Daniel Kahneman’s groupies, (and I include myself here), will remind you that when we are able to do something for ourselves we feel clever, empowered, “self actualised”. Of course what the aforesaid groupies will also remind us of is the “peak and end state rule” that’s the one where in our memories, a scratch in the last thirty seconds of a superb three hour recording of a symphony on vinyl is enough to turn an enjoyable experience into a travesty.


And that’s why what I endured in W H Smith is important not just for them but also for the airport, the airline and even the hotel, my memory of which is shaded by the unpleasantness I experienced within the nightmare that was  my journey through W H Smith.


So what actually happened?


I decided to buy a bottle of water and some mints before I got on the plane.


First of all – all of the bottles of water on offer in W H Smith were HUGE unless I bought a twice as expensive sparkling water – first black mark. I didn’t want to refresh the entire plane, just to have something I could sip during my journey.


But then it got much worse, my heart sank as I came to pay and was confronted by a double bank of 12 “self-service” checkouts.


By the time that I put down my bag to serve myself I was already huffing and puffing.  I scanned my two items. The machine then insisted that I present my boarding pass. I’m on the airside of the airport, waiting in the lounge for my flight, why do they need to see my boarding pass? Which bright spark planned this into the customer journey?


I presented my boarding pass to the machine which remained mute and failed to acknowledge me. Now I had to wait for a member of staff to intervene. Two members of staff were present in the area but neither paid much attention to customers. When one of them finally came over she wordlessly took my boarding pass from me, flicked it between her fingers like an amateur conjuror, presented it to the scanner once more, and handed it back to me before moving off. But the mechanoid wasn’t finished with me yet. Now my transaction needed to be authorised before I could be allowed to pay. So once more I had to wait for my reluctant saviour to grace me with her presence and enter a code into the machine before I could part with money. I did get a grudging “sorry” mumbled at me this time.


All this for a transaction worth £2.92.


So let’s consider my “emotional journey” through this escapade. I had low expectations of my visit to W H Smith.  Even so they managed to dig below my humble aspirations. I couldn’t find the size of bottle of water that I wanted and yet every supermarket I have ever been in sells such a size – it seemed to me that they were trying to “supersize me” for their own convenience and not sell me what I actually wanted. And my heart always sinks when I see “Self Service” with no accompanying staffed checkouts. I know the maths. I know that, typically, customers take 20% longer to serve themselves than when served by an experienced checkout operator. Having to scan my boarding pass was a nonsense and ordering that my transaction be authorised was just a bad joke. In each case I had to wait for a surly member of staff to arrive slowly and reluctantly to grudgingly assist me.  Frankly this kind of thing makes me want to run around the store screaming. I want to grab a basket, fill it to the brim and take it back through self-checkout only to abandon it half way through!


Self-service is generally installed with the best of commercial intentions but ladies and gentlemen of the jury, as we know, that way lies the road to customer expectation hell.


And the financial argument for self-checkout?


Let’s assume that a member of staff costs £12k p.a, that the cost of a conventional till including maintenance written off over five years is £800 p.a. and that a self-checkout till costs double this @ £1600 pa.


A bank of four conventional checkouts fully staffed during working hours would cost £54.5k p.a, including a fixed cost of £3.2k


A bank of 12 self-service checkouts with two staff would cost £43.2k p.a, including a fixed cost of £19.2k.


I estimate that my transaction on a conventional till would have taken 45 seconds. On the day, on the self-checkout it took over five minutes. The need to authorise my transaction was saved for me alone but problems scanning boarding passes appeared to occur on average every third transaction. I estimate that these problem transactions took on average 3.5 minutes.


So my four conventional, fully staffed checkouts could handle a peak total of 320 transactions per hour whereas a bank of 12 self-checkout tills could handle approx. 360 transactions per hour (based on my estimates).


So, at peak trading, the self-checkout bank could handle slightly more transactions per hour and if they ran flat out during trading there is small cash saving. However, idle time will count against them, with their relatively high fixed costs whereas in the conventional model staffing can be scaled to match demand adjusting costs accordingly.


And of course, such a scenario also ignores the impact of impulse merchandising in a linear queue whilst waiting for staffed registers. In initial pilots back in 2002, W H Smith found that putting confectionary and ambient temperature bottled water into a linear queue for conventional registers raised sales by as much as a factor of four.    Why?  Waiting customers happily browsed impulse items, whilst having their certain knowledge of being served soon reinforced by my dulcet tones (blush), “Cashier Number Three Please!” from the call forward system. Compare this to the anxiety experienced by customers waiting to use self-checkout as they try to spot which machine is free and anticipate the grief that they will soon experience.


Self-checkout undoubtedly has a role to play, it helps to reduce the operating cost of high volume locations and used correctly it can enhance the experience of customers.  But it only works if there are adequate numbers of trained and motivated staff to support the operation.  Marks & Spencer get this right, W H Smith do not.


Me? Next time I will use Boots the Chemist where they have a linear queue, smiling humans and I can buy my water in 45 seconds.