Connect with us

BizNews

Does self-checkout impact grocery store loyalty?

Self-checkout systems, despite their advantages in terms of speed, ease of use, and cost reduction, can result in lower customer loyalty compared to regular checkout systems, especially when the number of purchased items is relatively high (e.g., more than 15 items)

Published

on

In an effort to reduce costs and improve customer satisfaction, retailers have implemented self-checkouts in stores across the country. They have become increasingly popular, but some brands like Walmart are removing self-checkouts in some locations while adding more in others. There are many advantages and disadvantages of self-checkout for both the customer and the retailer, but little formal research has investigated the impact of self-checkout on customers’ shopping experience. This led researchers from Drexel University’s LeBow College of Business to look at how self-checkout systems in grocery stores influence customer loyalty compared to regular checkout systems.

Yanliu Huang, PhD, an associate professor in LeBow, and a former Drexel graduate student, Farhana Nusrat, PhD, now an assistant professor at the University of San Diego, conducted five studies that showed customers are more likely to remain loyal to the grocery store when using regular checkout service. They found loyalty is demonstrated by an increased likelihood of returning to the store in the future.

These findings and the full study were recently published in the Journal of Business Research.

Huang and Nusrat established that the perceived ease of checkout and a sense of entitlement played a role in explaining the effect of loyalty. They also noted the number of items purchased during the shopping trip also affects how the type of checkout influences customer loyalty.

“Our findings indicate that self-checkout systems, despite their advantages in terms of speed, ease of use, and cost reduction, can result in lower customer loyalty compared to regular checkout systems, especially when the number of purchased items is relatively high (e.g., more than 15 items),” said Huang.

Specifically, they noted that the perceived saved effort during the checkout process and the customers’ sense of entitlement explain the effect of checkout type on customer loyalty. Extra effort required to checkout and bag purchases and the expectation of being served by the store were negative consequences of self-checkout and decreased loyalty to the store. But, when shoppers viewed the extra effort in self-checkout as a rewarding experience, their store loyalty matched that of regular checkout shoppers.

Huang and Nusrat’s research is a compilation of five studies of data collection through crowdsourcing platforms. In the first study, they surveyed people who reported grocery shopping within the last seven days about their most recent grocery shopping trip and were asked to indicate which checkout method they used, followed by customer loyalty questions. This study demonstrated that regular checkout customers reported higher loyalty to the store than self-checkout customers.

In the second, third and fourth studies, Huang and Nusrat used hypothetical scenarios to have participants imagine that they took a grocery shopping trip to a supermarket and made purchases. In the regular checkout condition, participants were told that a cashier helped them at the checkout counter with the scanning and bagging process. In the self-checkout condition, participants were told that they scanned and bagged all items themselves at checkout. Then participants were shown a screen displaying the price of some items and the savings made.

In all five studies loyalty to the grocery store was measured, as well as perceived saved effort during the checkout process and customer entitlement in the third study. Results from the third study showed that customers’ perceived saved effort during the checkout process and their sense of entitlement, explain the effects of the checkout system on customer loyalty to the store. While the fourth study demonstrated that the effect of checkout type on customer loyalty will most likely happen for a high basket size, when the number of items purchased during a shopping trip is greater than 15.

In the fifth study – a field study – Huang and Nusrat introduced an intervention by encouraging participants to associate the extra effort involved in self-checkout with rewards. Specifically, in the first stage, participants who indicated that they would visit a supermarket to grocery shop within the next five days took part in the study and were randomly assigned to read either a neutral passage about trees or a passage about how self-completing a task that requires effort can make them feel accomplished and rewarded. The purpose of this intervention was to influence participants’ perception of self-checkout, making them think of the extra effort involved in self-checkout as rewarding and satisfactory. Participants were then asked to go grocery shopping within the next five days, upload the receipt of that shopping trip, indicate which checkout method they used, and answer store loyalty questions.

“We found that when customers were encouraged to think of the extra effort involved in self-checkout as a rewarding experience, their perceived loyalty to the store was similar to those of regular checkout shoppers,” said Huang.

Haung and Nusrat noted this research can help inform retailers on whether they should install or remove self-checkout systems, and how to better manage the self-checkout systems to ensure positive customer experiences.

“For example, to overcome the negative impacts of using self-checkout on customer loyalty, retailers should attempt to make the self-checkout experience more rewarding, like encouraging shoppers to think the extra effort involved in self-checkout is a rewarding experience,” said Huang. “Doing so offers retailers a solution to improve their self-checkout customers’ overall shopping experience, which in turn will facilitate higher customer loyalty.”

The researchers added that there is opportunity for similar studies to broaden the focus on other retail settings, including clothing, home improvement and luxury stores, as well as other forms of self-service technologies, such as self-checkout with RFID, scan-and-go apps, smart carts and self-service kiosks to measure customers’ experience.

BizNews

Sticking with old technology can be a strategic move

As competitors adopt new technology in some markets, firms that stick with the old technology may experience an initial decline before actually rebounding and even reaching new heights.

Published

on

Technological innovation — especially disruptive innovation — is often heralded as the best strategy for a company. But new research published in Strategic Management Journal found that as competitors adopt new technology in some markets, firms that stick with the old technology may experience an initial decline before actually rebounding and even reaching new heights. While the rise of a discontinuous technology does pose a substitute threat to the old technology, it also further exposes niche segments where companies can gain a foothold with customers who favor the old technology.

The analysis by Xu Li, a professor at the London School of Economics and Political Science, used archival data from the traditional Chinese medicine industry in China during the 1990s. In his interviews with managers in the field, he found that some chose not to innovate along with their competitors. In many cases, Li found these companies were performing well, if not sometimes better, by not making changes. Inspired by these conversations, Li chose to study under what conditions a firm may benefit from not innovating.

Li found some prior research on why companies would stick with older technology, but none explored why — during times of disruptive change in the market — sometimes firms are able to survive and even perform better within a small niche with old technology. What Li’s paper showed was that adhering to the old technology can, in some cases, be an effective strategy that ultimately improves firm performance.

The data showed a U-curve effect for traditional Chinese medicine firms that chose not to adopt new technology: The decline in performance began as a few competitors started launching a new technology, but later recovered and reached new heights as most competitors had adopted the new technology and exited the old technology market. But a lack of competition within the niche group of consumers who prefer older technology essentially gave these firms a monopoly within a smaller market as fewer competitors remained.

“Even though the new technology is often superior in terms of functionality, it doesn’t mean that every single customer or customer segment will be willing to move to the new technology,” Li says. “It’s important to understand what customers like about your product. We tend to assume that if a firm introduces something new, then customers must appreciate the new thing or the newness of the offering. But that’s not always true. The emergence of new technology can actually reveal people’s preference for something older.”

The research also refutes the idea that when the market is small, a company won’t perform better — but that depends on how many firms are still serving this niche. If only a few firms are left to serve this market, a company has far more power to charge higher prices among loyal customers with few other options.

“When you see a firm that is not actively innovating, we tend to believe the firm must be either incapable or is suffering — it’s always a bit of a negative tone,” Li says. “Sometimes staying with old technology might actually be a strategic choice, because by doing so it might also lead to better performance.”

Continue Reading

BizNews

Customers prefer text over video to provide service feedback

More people indicated they would likely leave written compliments or complaints about service on a restaurant-provided tablet powered by artificial intelligence. A video message option appeared to discourage leaving feedback.

Published

on

At a time when one viral video can damage a business, some companies are turning to their own commenting platforms rather than letting social media be the main outlet for customer feedback. Only one wrinkle: in this context, customers appear to prefer writing a message rather than leaving a video.

In a recent study, more participants indicated they would likely leave written compliments or complaints about service on a restaurant-provided tablet powered by artificial intelligence. A video message option appeared to discourage leaving feedback.

With more restaurants and hotels turning to AI to enhance their service, the findings indicate that methods that require “low self-disclosure” would work better, meaning ones that don’t require customers to provide very much identifiable information.

“Some restaurants and hotels actually ask customers to create video testimonials that they can share, but for general customers, it seems they feel more comfortable with low self-disclosure. This is probably because people still do not trust AI to that level,” said lead author Ruiying Cai, a researcher in Washington State University’s Carson College of Business.

With a lot of hype around AI technology, many people have misperceptions about what it can do, Cai pointed out, perhaps believing it is capable of a lot more than simply recording a message.

The study participants reported being concerned about what would be done with their information in all the scenarios, but this was heightened with the option to leave a video.

For the study, published in the International Journal of Hospitality Management, Cai and her colleagues presented different online scenarios to a total of 439 people. The participants were first asked to imagine a restaurant where they had either good or bad service. Then they reported how willing they were to give the server compliments, or complaints, with either text or video on an AI-enabled tablet.

The researchers found that the participants were more willing to give feedback using text, whether positive or negative.

The scenarios also had participants receiving a theoretical immediate or delayed reward to provide feedback, namely a 5% discount of their current meal or a future one. For complaints, the reward timing did not appear to make much difference, which the authors said was not surprising as people tend to be more highly motivated to complain than compliment.

For compliments, the researchers found an interesting connection: with more participants choosing the delayed reward over the immediate one. This may indicate that giving the compliment itself is its own reward as it makes the giver feel good, Cai said.

“It’s a good start to think about how to encourage customers to leave more compliments which could be very important for frontline employees. It could also be beneficial for the customers themselves,” she said.

Even complaints are important to encourage, Cai added. As her previous research suggests, restaurants and hotels should make it easier for customers to complain to them directly rather than go elsewhere to air their grievances.

“There have been episodes when customers were not afraid of posting angry videos on their own social media,” Cai said. “If restaurants and hotels can encourage customers to complain directly to them, then they may be able to recover and solve that service failure before it goes viral online.”

Continue Reading

BizNews

Ambitious workers park the office politics when employer is struggling, study suggests

Workers curb competition against competitors to unite against external rivals when employer faces either losing sector status or can improve reputation.

Published

on

Workers curb competition against competitors to unite against external rivals when employer faces either losing sector status or can improve reputation.

This is according to a study – “Revving Up or Backing Down? Cross-Level Effects of Firm-Level Tournaments on Employees’ Competitive Actions” by Patrick Hallila, Hans T. W. Frankort and Paolo Aversa – that appeared in the Academy of Management Journal.

The peer reviewed paper, which has been published on the website of the Academy of Management Journal, looked at riders who, systematically, adjusted their internal and external overtakes based on their team’s competitive threats and opportunities, as well as the resources available to those competitor teams.

“Sports – particularly motorsports – can be a good proxy for several other industries as they are extremely competitive: if you don’t perform and progress you may be out. Workers in sectors such as consultancy and financial services face similar pressures,” Frankort said.

This study linked the motorsports experience to other workplaces, particularly since earlier research has shown that employees compete to improve their relative standing in the eyes of their employer, in the hope of climbing the career ladder. Such behaviors may include poaching colleagues’ clients or even disrupting or sabotaging their work.

And yet this study suggests that ambitious workers tend to modify those behaviors when the standing of their organization is about to deteriorate or improve.

“Why? Because they see the standing of their firm as an important factor in deciding who to compete with to advance their career,” Frankort said.

“If the company has a chance to out-perform better-resourced rivals, employees’ workplace behaviour is geared towards being seen to be a key contributor to that success. For example, a salesperson might try to poach colleagues’ clients. However, if a firm is facing threats, such as losing market share to smaller rivals, workers may feel that infighting is poor form. Instead, they would focus on competing against rival firms. Inside the firm, individuals may simply want to blend into the background when their company is going through difficult times.”

The findings suggest, Frankort said, that employers can influence the nature of their employees’ competitive actions. For example, employers could highlight threats to the firm from underdog firms or its opportunities against bigger rivals.

The research also found that riders’ overtaking attempts were shaped by their contractual position with the team. For example, replacement riders – the MotoGP equivalent of agency workers – attempt more overtakes against teammates when the team is doing well and against all riders when the team is struggling.

The paper concluded: “It may be that replacement riders are keen to signal their skills relative to incumbents, hoping to secure a permanent contract.”

Riders whose contracts will not be renewed challenge their teammates on the track and are less likely to overtake riders from other teams – suggesting they feel detached from the team and even disgruntled with it.

Continue Reading
Advertisement
Advertisement

Like us on Facebook

Trending