LEE JING YI 14552977 Essay topic : The role of self-service technology within service retailing In the 21st century,

technology becomes ever more advance. Many people agreed that technology has become an integral part of the marketplace. In addition, the advance technology is also profoundly impact the business services and consumers lifestyle. It results in the growing importance of service and relationships in the economy. Based on the research, some people agreed that the traditional marketplace interaction is being replaced by a marketspace transaction (Meuter et al.2000, 51). The interactions between customers and retailers have changed in this new marketplace area. Selfservice technology is one of the examples of marketspace transactions which do not have face-to-face interact between customer and retailer (Meuter et al.2000, 51). Selfservice technologies defined as technological that allow customers to perform services independently without interact with any employees (Sannes 2001,139). Although consumers are living with the fast pace of modern-day living yet not all consumers will adopt a new innovation as well as advance technology at the same rate. Therefore, retailers who implemented self-service technology are actually targeted on innovators. The characteristics of innovator are venturesome and willing to adopt a new product or service technology. In addition, retailers are also targeted on single, young and educated consumers (Meuter et al.2000, 51). In reality, some of the consumers are actively seek out checking in the airport, information kiosks at cinema, automated teller machines (ATMs), self-scanning in supermarket, banking by phone and services over the internet (Meuter et al.2000, 50). Other consumers, however, intentionally avoid such self-service technologies. Retailer should understand and know well how customers evaluate SSTs in order to improve their performance (Kuang-Jung 2005, 307).
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There are four types of self-service technology interfaces are being used. The first type is telephone & interactive voice response (IVR) systems. This system is more useful and suitable when customer wants to make orders, customer surveys and customer billing inquiries (Bitner, Ostrom and Meuter 2002, 99). Usually, this selfservice technology is giving advantage for banking industry, airlines industry, insurance companies, pizza restaurants, universities and credit card companies. For example, customer calls to the bank for enquiries.

Another type of SST will be internet based or other on-line connection systems. Internet based means deliver services through internet. Internet banking, online shopping and bill management services are the examples of internet based services. For instance, Amazon.com is one of the popular webpages that allow consumers make order and purchasing through online. Amazon.com has its customized and efficient services (Bitner, Ostrom and Meuter 2002, 97). In addition, ATMs and pay-at-thepump gas stations are also examples of on-line technologies. In banking industry, consumer allows transferring money from the savings account to another account through the ATM at any time due to ATM is on-line technology.

Next will be the interactive freestanding kiosks. Interactive kiosk is for public use that delivers information or enables transactions (PFU Limited 2011). Many shopping malls and retail stores offer install these kiosks both inside and outside their stores. These types of kiosk bring convenient to retailers and consumers. It able to help retailers and consumers determine availability of a product (PFU Limited 2011). Besides that, consumers can also find kiosks at the cinema that allow using credit card to purchase and print out the movie tickets. In addition, interactive freestanding kiosks

are also popular and friendly use in the airport that for consumers quick checkout and print airline tickets.

The last type of self-service technology is Video, Digital Video Disk (DVD) and Compact Disc (CD) based technologies which normally used for educational purposes. This type of SST allows customers to learn, motivate, receive information and train themselves. Examples include health information websites, self-help videos and training videos. Banking industry will use this media introduce new services to consumers and also train their employees. Besides that, colleges and universities provide education classes by using video and CD format. Many people believe that using video media to teach student will increase the passing rate due to video have sounds (Chang-tse 2005, 78). On the other hand, in the business area, GE Medical Systems provides video and satellite-television-based (just in time training) on its equipment for hospital customers. It allows customers to train themselves anytime.

Many industries have implemented self-service technology especially banking industry due to self-service technology will offer advantages to both providers and consumers. The main advantages to banking industry from successfully implementing SSTs are cost reduction, increase customer satisfaction and loyalty and reaching of new customer segment (Bitner, Ostrom and Meuter 2002, 98). For the customers, SSTs offer them convenience, time saving, ease of use and entertainment from using the technology.

According to Bitner, Ostrom and Meuter (2002, 98), banking industry and retailers do not need to pay so much on labour cost and training cost once they have implemented

the self-service technology. The costs of paying IVR and interpersonal telephone call are cheaper than paying the labour cost and training cost. The average cost of paying IVR is 45 cents and interpersonal telephone call is $7.60 (Bitner, Ostrom and Meuter 2002, 98). Therefore, self-service technologies definitely will reduce the costs. However, banking industry will face the increasing of expenses if the service technology doesnt gain adoption from consumers because of the payment of operational workers and new machine technology (Kelly, Lawlor and Mulvey 2010, 4) Besides that, the uses of SSTs in bank industries enable to reduce the cost while enhancing service efficiency and effectiveness. For examples, the operating costs of mobile banking are one-fifth of comparable banking services at a traditional bricksand-clicks bank (Proena 2011, 193).

The next advantage of implemented SSTs is SSTs able to increase customer satisfaction and loyalty. Customer satisfaction is the degree to which customer expectations of a product or service are met or exceeded. Almost every business firm agreed that customer satisfaction is vital for success (Barlow and Maul 1999, 15). In order to satisfy customer satisfaction, service retailers who work in banking industry must learn and know what drives customer satisfaction. As mentioned above, SSTs offer customer convenience, time saving, ease of use and entertainment from using this technology (Kelly, Lawlor and Mulvey 2010, 4).

SSTs able to solve customers intensified need. Normally, SSTs have longer and flexible hours of operation therefore SSTs are frequently help customers to solve immediately problems. For example, one of the customers needs the cash immediately due to his father needs to have an emergency operation in the hospital. Unfortunately,

the hospital only receives cash yet all the banks were closed. In this time, SSTs will help him as he could get the money in a hurry from the ATM. The customer gets satisfaction on it and this is how the SST helped alleviate their concerns. SSTs are always bringing convenience to everyone (Sannes 2001, 139).

There are 68% satisfying incidents about satisfaction with the SST was driven by the benefits that provided by using SSTs. Customers observed that the SST was a better alternative than the previous interpersonal method of service delivery. For example, provide alternative delivery channels in the banking industry as alternative from ATMs to telephone banking or from PC-based to wireless services. All of these alternatives could satisfy the online customers and so online customers are the loyal group (Meuter et al.2000, 55). Besides that, many customers agreed that SST was easier to use than the interpersonal service option due to SST has a straightforward process and have simple steps. For example, one of the banking customers said, "I prefer SSTs because it is simple and convenient for me as I just only put my card in to the ATM and followed the easy instructions then I got my cash and a receipt (Meuter et al.2000, 55).

The last reason and advantage for banking industry to implement SSTs is reaching of new customer segment. SSTs in one of the ways to create new channels to reach new customer segments. New customer segment is vital for every company as the more customer segments will increase the company profit. According to Bitner, Ostrom and Meuter (2002, 98), successfully implemented the SSTs such as Web-based SSTs will expand the company customer base. For instance, banking industry can advertise their service program to world-wide markets through the Web-based SST in order to

increase the new customer segment and eventually increase the profit. This approach could make banking industries to become successful in the business world. Furthermore, SSTs can also improve service quality perceptions, customize services and offer flexibility to consumer needs (Kelly,Lawlor and Mulvey 2010, 4).

In contrast, there is challenging for implement SST as well. In fact, not every consumer adopts the self-service technology. There are some factors that affect SSTs adoption and uses which are presentation of the services, design of the SST, the way banking industry manages and prevents SST failures, the way banking industry advertises the SST, the ability of banking industry to keep the SST up-to-date and improve the SST (Chang-tse 2005, 79). Sometimes, consumers will avoid SSTs even they favorable attitudes towards technologies because SSTs cannot totally replace the personal interaction. SSTs do not have face-to-face communication therefore hard to maintain good relationship between retailers and customers. Once there is lost customer commitment and loyalty, banking industry hard to increase profitability. (Meuter et al.2000, 57).

Based on the research, the larger groups of consumers dissatisfy SSTs because of technical failures. Technical failure means the technology always breakdown while the customer interacts with the technology. For instance, internet brokerage services, broken ATM and pay-at-the-pump machine (Meuter et al.2000, 57). Once the technology failure, customers are not able to log in to the banking website to transfer money or check transaction record. In addition, for customers who prefer mobile banking, the telephone line in banking industry is important. Sometimes, it would break down as well. The technology failure will make customers feel annoying.

Therefore, this is the challenging for banking industry which implementing selfservice technology. Banking industries have to manage and prevent the SSTs failure and also have the ability to do service recovery all the time (Meuter et al.2000, 57).

Furthermore, the way of SSTs presentation of the services also quite important as it is also one of the challenging for banking industries and retailers. For SSTs to work, customers must be technology savvy else they do not know how to use the SSTs. In fact, SSTs can be simple and also can be complicated. More and more companies and banks have moved to SST and removed all the other service options. For those customers who are not familiar to SST or not technology savvy, they will feel annoying and dissatisfied with the SSTs (Meuter et al.2000, 57). For example, Williams father is not technology savvy customer. He does not understand the instructions which provide on the banking website therefore he cannot transfer money through internet. He finds that the instructions are so complicated and he is dissatisfied with the new service. As a result, this is the challenging for SSTs which hard to satisfy every consumer. Yet, SSTs presentation of the services should provide as simple as it can (Meuter et al.2000, 57).

The accurate ways to implement SSTs is very important. Banking industries implemented the SSTs by research what are the customer wants and needs and focus it (Bitner, Ostrom and Meuter 2002, 104). Not all the customers understand how to use the various technologies. Therefore banking industries have to provide phone or on-line chat support for an Internet based technology. In order to ensure customer adoption and use, SSTs should to be designed for customers and not technicians. SSTs should make the application user-friendly. To solve the problem, banking

industries use focus group to understand customers needs (Bitner, Ostrom and Meuter 2002, 104). Adequate customer research is the only way to achieve this. Banking industries should listen to customers perceptions (Bitner, Ostrom and Meuter 2002, 104).

Besides that, banking industry should be very clear on the strategic purpose of the SST. SSTs able to reduce costs, increase customer satisfaction and reach new customer segments (Bitner, Ostrom and Meuter 2002, 104). Customers will have a negative attitude about SSTs in banking industry if customers observe they are only implementing the SST due to cost saving. Banking industry should let customers know the benefits of the SST and also provide benefits to customers over and beyond what the alternative provide. By doing this, it can bring positive feelings to the customers about the SST (Chang-tse 2005, 81).

Moreover, banking industry actively promote the use of SSTs as in increase the awareness of new SSTs. Customers must be aware the benefit of new SST before they try it. Previously, banking industry held marketing activities to introduce new SST. Sometimes, banking industry provide some incentive could lead to customers to try the SST (Bitner, Ostrom and Meuter 2002, 105). Additionally, SSTs in banking industry will successful if banking industry knows how to prevent and manage failure. As mentioned before, one of the reasons that influence customers stop using SSTs is failure of technology and service. Obviously, banking industry always need to develop robust systems and provide for on-the-spot recovery whenever possible. In fact, the simple SST process and well-designed will help to minimise the failure. (Bitner, Ostrom and Meuter 2002, 105).

Lastly, banking industry implemented SSTs by preparing for constant updating and continuous improvement. SSTs will easier to out-dated due to the rate of evolution relating to technology service delivery is so fast (Bitner, Ostrom and Meuter 2002, 105). Banking industries have to always update the technology and make improvement on it in order to get continuously successfully in the business world (Bitner, Ostrom and Meuter 2002, 105).

As mentioned before, self-service technologies are very common in the banking industry. One of the Australia banks which named Commonwealth bank has implemented SSTs long time ago. The Commonwealth Bank of Australia (CBA) is one of Australias leading providers of integrated financial services (Commonwealth Bank of Australia, 2011). Commonwealth bank is commitment to all Australians that ensure flexibility and choice in providing a varied range of financial products and services (Commonwealth Bank of Australia, 2011).

Currently, Commonwealth Bank customers are conducted electronically. This trend of use SST has been growing quickly. Electronic transactions that used by Commonwealth Bank include ATM, Electronic Funds Transfer Point of Service (EFTPOS), telephone banking and internet service (Commonwealth Bank of Australia, 2011). SST is greater due to it generally offer customers greater flexibility, efficiency and convenience. Not every consumer familiar with the new technologies therefore Commonwealth Bank provides long-standing information and education program (Australia Human Right Commission, 1999). In addition, Commonwealth bank not only targeted on young customers yet also targeted on older customers and customers with a disability. For the elderly and customers with disability, bank will special assist
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them by the way of additional services and fee-free banking (Commonwealth Bank of Australia, 2011).

NCR is a developer of self-service technology. NCR claims that Australians have adopted self-checkouts at almost double the rate of US and European customers (Anthill Magazine, 2010). There are thirty-nine percentage of Australians would choose bank that offered them self-service for transactions such as bill payments and statement printing. Nowadays, consumers do not have a lot of time hence a third of bank customers would choose the branches that bring them convenience (Anthill Magazine, 2010). According to Commonwealth Bank (2011), there are over 4000 ATMs across Australia which is the highest coverage of any bank in Australia. It shows that, customers able to access their money from ATMs anytime and anywhere. Commonwealth bank indicate it is one of the ways that they put customers needs first (Commonwealth Bank of Australia, 2011). Next, as mentioned above,

Commonwealth bank provides internet banking. Every customer included older customers and customers with disability; they can do basic banking transactions securely over the NetBank at home. NetBank is Commonwealth Banks internet banking service (Australia Human Right Commission, 1999). NetBank is allowing to access 24 hours a day, 7 days per week. It is so convenient for everyone.

Based on the research, commonwealth bank selects consortium to upgrade online banking system in Year 2003. Commonwealth Bank selected IBM Business Consulting Services and Eontec Ltd as the successful tenderer to upgrade its online banking service (Commonwealth Bank of Australia, 2003). According to Hugh

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Harley who is the Commonwealth Banks Group Executive, said, "The internet banking service after upgraded will guarantee that Commonwealth Bank customers continue to have market leading online access and services available. Our online customer base and transaction activity continue to grow rapidly. He also said that upgrade the online banking system provide the increased capacity to support future customer growth and will also expand the range of services available online (Commonwealth Bank of Australia, 2003).

In conclusion, self-service technology is vital and valuable to banking industry. Banking industry should understand and know well how customers evaluate SSTs in order to improve their performance and eventually increase profitability. Once the banking industry implemented successful SSTs, it could bring many advantages to both banking industry and customers. Commonwealth Bank aims to ensure all Australians, regardless of age, disability or mobility, have the opportunity to access its services.

(2588 words)

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