The Remedies: Make sure you’re solving a real business problem. Talk to customers, not just your corporate users, who are much more technically savvy. Partner closely with the business units involved. And remember, there is no help desk in this world.
The Payoff: If it works, do-it-yourself technology can save millions on labor costs, speed sales and delivery times, and improve customer satisfaction.
They don’t bite. They don’t snarl. And they don’t even frighten small children. Still, they can be so intimidating that the only option is to pull the plug.
Who’d have thought that something as benign as do-it-yourself kiosks could be so formidable that no one would use them? Certainly not executives at Hallmark Cards Inc., who sat back and watched while archrival and No. 2 player American Greetings Corp. rolled out its own machines in 1992 and saw sales boom. Not to be outdone, Hallmark rushed to market with its own version, eventually putting almost 2,700 of them in grocery stores and malls across the country.
But almost as if the machines had sprouted fangs, customers avoided them. Some curious consumers did check them out and liked them, but they were in the minority. So earlier this summer, Hallmark pulled about half the machines out of stores. The company’s plan? Start over.
Hallmark is far from the only company that needs to tame a technology beast. From department stores to fast-food chains, movie theaters to airlines, more and more companies are starting to put technology into their customers’ hands. The goals are worthy–cut labor costs, speed up service, and improve customer satisfaction–but it doesn’t come without risks.
Sure, consumers like the idea of helping themselves. But with no help desk to support them, they can get scared away or annoyed by even small glitches and seemingly simple interfaces.
Turn customers off too many times and you might lose them–and that can easily turn into a CIO’s nightmare, particularly if the IS department is called in to retool a mechanical monster. After all, once the technology heads out the door, so does your control.
Not a ‘Hall of Fame’ Success
Just ask Hallmark. For the Kansas City, Mo., company, a number of things went wrong. First, the industry was pumping out too many card kiosks into the market at one time for them to succeed, says Mary McClure, vice president of consumer product technology. But she also admits there were things the group hurried through that, if it had taken more time, could have given them a better chance for survival.
Hallmark was in a hurry because it was late. By 1993, when Hallmark was just rolling out its first set of machines, American had close to 10,000 of them in the marketplace. Undoubtedly, American’s aggressive push into the kiosk market made Hallmark nervous. “We would have had a very difficult time if this situation had been reversed,” says John Klipsell, American’s senior vice president of electronic marketing, in Cleveland. American was able to nail down the kiosk market largely because it had acquired a small company that invented the machines and had already done substantial research on customer acceptance of them. That left Hallmark in the lurch.
“We needed to speed up on our development time line, and our testing time was limited,” says McClure. While ideally she would have liked to test them as they were being prototyped and developed, the luxury of time was one the consumer technology group simply could not afford.
Combine the rush with the fact that McClure’s division didn’t have a close partnership with Hallmark’s internal IT group, and the subsequent problems become even clearer. McClure says a stronger relationship with IT would have helped the consumer technology division better manage the learning curve associated with the kiosk technology. “[That] certainly would have helped, as well as [more partnering with] outside groups. That would be the one thing I’d do differently,” she says. IT, she points out, already
has a strong matrix relationship with her division. But its main task has been to support the “back-office” functions associated with consumer technologies, such as billing.
But even if you have the IT department involved, there can still be problems. At Bloomingdale’s, a bridal registry kiosk is being rolled out to all 15 of the company’s stores–and any new stores that open–despite minor bugs in the touch-screen interface and complaints from users. “If you’re there to pick up [the registry list] quickly, it’s a total pain,” says customer Cathy Messing, who uses the bridal registry kiosk in Bloomingdale’s, in Chestnut Hill, Mass.
Some 12,000 couples register annually in the eight stores that have the bridal registry kiosks, and registry sales account for 10 percent of total revenues for the Home Division at the $1 billion New York-based company. The kiosks exist because “if you cannot service the customer within 5 minutes of their walking into the store, you will generally lose them,” says MaryBeth Shea, corporate director of Bloomingdale’s Bridal Registry. Fixes for the older machines, which Shea admits need upgrading, will come a s the company extends and improves its registry service.
Ginny Svorza, operating vice president of MIS and technology support for Bloomingdale’s, says she is unaware of sensitivity problems with the touch-screen. But recently, there have been hardware problems with the system, which is now maintained by Bloomingdale’s parent company, Federated Department Stores Inc., in Atlanta, Svorza says. When Federated changes the format of the screen, either to add information or give it a new look, the kiosk isn’t prepared and the system shuts down. Svorza, who acts as a l iaison to the corporate systems group, now has to get new software to the eight stores to correct the problem.
She is also involved in producing an enhanced registry system with more flexibility and information, which will be rolled out in early 1996. It will give sales clerks the capability to follow up on new products with brides who registered, as well as incorporate baby and anniversary registries.
Not everyone is completely convinced, however, that consumer technology is tame enough to be released into public arms–yet. Arby’s Inc., which manages and installs IT independently from its franchisees, is observing the self-serve trend closely but is being cautious about jumping on the bandwagon. This May, it rolled out 150 point-of-sale touch-screen terminals to company-owned stores and will have 150 more out by October. The systems can be used by either store clerks or customers, but for now, the fast- food company has chosen to keep the terminals facing their employees, not their patrons.
“It is possible that you could take this technology too far. You are supposed to be able to reduce labor [with it], but I don’t know if the technology is there yet,” says Matt Hale, director of restaurant systems at Arby’s headquarters, in Ft. Lauderdale, Fla.
A larger issue is that fast-food restaurants are designed around the concept of walking up to a clerk behind a counter, who is there to take an order. Introducing customer order entry into that environment could affect line flow, service, and sales. But ultimately, Hale needs to see proof of stronger customer acceptance of technologies in other companies before he’ll turn those terminals around.
No matter. The momentum of do-it-yourself technology is here to stay. Federated is planning to roll out a system that uses a handheld scanning device both to register brides’ item preferences and then to deduct gift purchases from lists in its 46 Burdines department stores in Florida. The Bailey Co., an Arby’s franchiser based in Golden, Colo., has installed a touch-screen customer order entry system developed by Tradeware Technologies Inc. in 26 of its 62 stores.
And, according to Paul Seigert, president and CEO of Tradeware, also in Golden, the system is also being used by Whataburger Inc., a Southern fast-food restaurant, and is being tested by Boston Market Inc., McDonald’s Corp., Burger King Corp., and Carl’s Jr. in California. United Artists Entertainment Co., Seigert says, is planning to use the system in theaters. And now, Tradeware is working on plans to install the system at gas pumps in rest areas so travelers can order their food while they pump. And tha t’s just to name a few.
So if your company is headed down this track, is there any way to stave off disaster? There certainly are some lessons to be learned from Hallmark’s experience. First, it looks like McClure’s and CIO Jim Miller’s organizations are working toward a much closer relationship, which should make the next version of the kiosk design go a little easier.
And even though McClure was forced to be in a hurry, she did a lot of the right things, such as diversifying her risk. McClure’s strategy of experimenting with several consumer technologies at one time–interactive television and the Internet are next–helped blunt the sting of removing the kiosks. That, plus the fact that premade greeting cards and gifts account for the bulk of its $3.8 billion annual revenue, meant the impact of the recall was “like a flea on an elephant,” according to a company represen tative.
Companies can ease their customers through the transition by understanding–and respecting–the fact that not everyone will take boos and hisses from unwieldy technology very kindly. The more partnering, planning, and testing IT and consumer technology groups do behind the scenes before pushing technology out the door, the less likely they are to unleash Godzilla.
But until they get it right, companies should appreciate customers like Messing. Technology has snarled at her a few times, but she’s not so intimidated that she won’t give it a second chance. She even registered in the Bloomingdale’s system for her own wedding. “I’m all for anything that makes life faster and easier,” she says.