- The Washington Times - Monday, July 5, 2004

It’s not so far-fetched anymore for consumers to spend an entire day running errands and entertaining themselves without ever talking to anyone.

It takes just a touch of a computer screen to bank, pump gas, order movie tickets, pay for parking, buy groceries, print photos, buy nuts and bolts, renew vehicle registrations or retrieve an airline boarding pass.

The self-service revolution is taking consumers out of lines, reducing their wait times and giving them control.

“Everybody was worried about the adoption [of self-serve kiosks] because they would think it’s poor service, when in fact it’s good service,” said Steve Laughlin, partner at IBM Consulting Services. “Customers feel a sense of control.”

More industries are adopting self-serve technology — even those such as airlines and hotels that thrive on customer and employee interaction. Consumers — young and old — are becoming so comfortable with the technology that it is becoming second nature.

“Self-service is here to stay,” said Robert Machen, vice president of customer-facing technology for Hilton Hotels Corp.

Despite widespread acceptance, some consumers still prefer the old ways. They’re not interested in doing it themselves.

“There are going to be some people that will reject this technology because it’s different,” said Lee Holman, vice president of product development for IHL Consulting Group, which tracks retail technology. “They just aren’t comfortable with it. That’s human nature.”

Self-serve has grown since consumers started banking on their own and buying gasoline without having to walk to the cashier’s window several decades ago. There are now more than 371,000 ATMs in the United States.

“When [ATMs were] first introduced, futurists thought we would be living in a teller-less society,” John Hall, a spokesman for the American Bankers Association said.

Instead, ATMs have become an “enhancement” to a bank’s services, Mr. Hall said.

Most industries insist their self-serve technology is not replacing employees. Companies are reluctant to discuss how it affects their staffing levels.

“It’s a touchy situation,” said Francie Mendelsohn, president of Summit Research Associates Inc., a Rockville firm that provides consulting and kiosk research. “If you can deliver the same service or better with less employees, your stockholders are going to love you.”

John A. Challenger, chief executive of outplacement firm Challenger, Gray & Christmas Inc., says self-service will replace employees increasingly over the next five years.

“There’s no question kiosks and self-checkout are going to mean those jobs don’t need to be done by people,” he said.

Mr. Holman said employee layoffs will happen on a case-by-case basis, depending on the employer and the industry.

“Obviously, there are going to be retailers and other employers who will see this as a way to save on labor costs,” he said.

As the technology grows, employers say they are redeploying their workers to deal more directly with customers and increase productivity.

There are more than 450,000 kiosks worldwide, not including ATMs, according to Summit Research. By 2007, the group predicts 738,000 kiosks worldwide.

Kiosks accounted for about $155 billion in transactions last year. That figure is expected to reach $1 trillion by 2007, according to IHL Consulting.

A growing number of companies are testing self-service technology, reviewing cost benefits and analyzing customer feedback to determine if it is a worthwhile investment.

The average cost of a self-serve kiosk is $8,276, according to Summit Research’s latest study. But the more elaborate kiosks, which have payment systems and numerous functions, can run about $20,000 each.

Taking off

Although consumers are seeing more self-serve checkout lanes at their neighborhood grocery stores, the airlines have become a leader in self-service, adding check-in kiosks at their ticket counters to eliminate lines.

Heightened security after the September 11 terrorist attacks — which requires passengers to have their boarding passes before going through security checkpoints — accelerated efforts by major carriers to add more kiosks.

“There’s no question that self-check-in speeds the process tremendously,” said Jason Schechter, a United Airlines spokesman. “It’s not just about speed, though. It’s about putting a lot of controls in the passenger’s hands. That’s a benefit that people overlook.”

Since summer 2001, United has installed 677 EasyCheck-in kiosks in 45 airports. Passengers can get their boarding passes, check in bags, change flight information and process upgrades.

About 1.8 million United customers used EasyCheck-in kiosks in April. That’s about 44 percent of passengers checking in during the month, the company said.

US Airways started installing kiosks in 1999 in its shuttle markets: Washington, New York and Boston.

As of February, the Arlington-based carrier had 491 kiosks in 82 cities. More than 55 percent of its e-ticket passengers use the kiosks, which can take as little as 30 seconds to retrieve a boarding pass.

“It’s another service point for our customers,” spokeswoman Amy Kudwa said. It also frees up ticket agents for those customers with more complicated itineraries and makes the line shorter for those who don’t want to use the kiosks.

US Airways plans to add more check-in kiosks and machines that read tickets at the boarding gates, which will result in the layoff of about 200 workers in the fall, according to the Communications Workers of America union in Pittsburgh.

Many airlines say the kiosk can check a passenger in and print a boarding pass within minutes, if not seconds.

The average time spent at a kiosk is seven minutes, compared with more than nine minutes about two years ago, according to Summit Research. The decrease shows more use, people getting more accustomed to them and the technology becoming simpler.

C. David Wick, 77, used a check-in kiosk for the first time when he flew in April from Dallas to Baltimore. An American Airlines agent helped him through the process, and he handled the machine himself when it was time to fly back to Dallas.

“I just followed the instructions,” Mr. Wick said. “It was less trouble than going to the counter.”

Mr. Wick said he had never used self-service kiosks before.

“I’m 77. I have a rule to stay away from those things,” he said. “But I decided this time to try it.”

Kimberly Howard and Darlene Roberts used a Southwest check-in kiosk for a recent flight back home to Cleveland.

“It’s so quick. It tells you exactly what to do,” Ms. Howard said. “You don’t have to wait in lines.”

Southwest is one of the last airlines to jump on the kiosk bandwagon.

The Dallas low-cost airline started using kiosks about a year and a half ago. Now more than 400 kiosks are in 59 airports. About 22 percent to 25 percent of its e-ticket customers are using the kiosks.

Universal kiosks

But with the growing number of airline kiosks, airports are becoming overcrowded with the machines.

Washington Dulles International Airport, for example, has 59 kiosks. Ronald Reagan Washington National Airport has 72. The Metropolitan Washington Airports Authority, which manages the two airports, wants to install universal kiosks where passengers can access all the airlines.

“Spaces are so critical,” said Tara Hamilton, the airports’ spokeswoman. “Put [the common-use kiosks] in logical locations and potentially all passengers would be able to use them.”

That’s what has happened in Las Vegas’ McCarran International Airport, which introduced its SpeedCheck in October.

More than 30 kiosks give passengers access to 13 airlines. The airport has 25 kiosks strategically placed in common areas. Six more SpeedChecks, with fewer airlines, are at the Las Vegas Convention Center.

The system is built with technology developed and marketed by IBM and Arinc Inc. The kiosks use software that communicates with the participating airlines, allowing passengers to access their systems from one machine. It is based on a worldwide standard for common-use self-service technology for the airlines that was created by a group led by the International Air Transport Association.

The initial phase of the SpeedCheck program, including the technology, infrastructure and hardware, cost about $2 million.

Between 5 percent and 10 percent of McCarran’s customers are using SpeedCheck, said Samuel Ingalls, airport information systems manager at McCarran.

The airport has about 30 individual airline kiosks, but plans to replace them with SpeedCheck by the third quarter. Within the year, another 100 kiosks will be installed at the airport and at off-site locations such as hotels.

Other airports are interested in emulating the Las Vegas model, said John Dungan, senior product manager at Arinc.

The Annapolis company recently was awarded multiple contracts to install its passenger kiosk technology at three airports in Britain: London Heathrow International, Manchester International and East Midlands.

Another three or four U.S. airports will have the technology by the end of the year, Mr. Dungan predicts.

Getting to bed faster

The hotel industry also is adding self-serve kiosks to get guests to their rooms quicker.

Starwood Hotels & Resorts Worldwide Inc. started expanding its self-service kiosk pilot program in April after putting kiosks in two of its hotels in Boston and New York last year.

Over the next several months, more than two dozen Sheraton hotels will get one to five Sheraton Speed Check kiosks. The properties will assign a “kiosk ambassador” to help customers with the service and encourage those waiting in line to try the technology.

“We’re taking the agents from behind the desk and putting them up close and personal [with the guests],” said Rod Mano, senior director of property technology at Starwood.

“This is a great speed enhancer,” Mr. Mano said. “If we’re able to get a person checked in two or three times faster, we are hoping they are getting a better experience. We’re hoping it increases guest retention.”

Hotel officials say the machines are not obtrusive.

The kiosks’ look and locations depend on the hotel chain, but usually they are located in front of pillars in the lobby.

Hilton’s kiosks, for example, are thin and narrow and can be moved throughout the lobby because of their wireless connection.

Hilton began testing self-service kiosks at two properties in New York and Chicago earlier this year. The kiosks have outperformed the company’s original expectations, with 10 percent to 12 percent of arrivals using kiosks.

“This is more of a guest-satisfaction requirement,” said Thomas Spitler, vice president, front office operations and systems for Hilton. “They really demanded alternatives to the delays of getting to their room.”

Hilton, which is working with IBM, is so satisfied with the results of its two-hotel test that it is planning to install two to five kiosks at the company’s top 25 hotels. The Hilton Washington will get kiosks in the third quarter.

“We think we’ll be rewarded by increased customer loyalty,” Mr. Spitler said.

The functions of the kiosks will expand to give guests the choice of rooms, upgrade a reservation and print boarding passes from participating airlines by the summer.

“The more sophisticated companies are thinking about the entire travel experience and improving it,” said IBM’s Mr. Laughlin.

Checking out

Retailers — particularly grocery-store chains — have found the benefits of self-service checkout, industry officials say. During the busiest times of the day, self-checkout serves as an alternative for time-pressed customers.

Without self-checkout, the store has to pull employees from other departments to staff extra checkout lanes, which leads to less-efficient operations, said Christopher Boone, program manager of retail for IDC, a Massachusetts advisory firm in the information technology and telecommunications industries.

“For large-format retailers, it makes sense to offer [self-checkout] as an additional option,” Mr. Boone said.

Home Depot starting using self-checkout lanes in 2002 in 830 stores.

The home-improvement giant retrained staff and put them back on the sales floor to help with customer service. Last year, about 30 percent of Home Depot’s 1.5 billion transactions were self-checkout.

Marshal Cohen, chief analyst at NPD Group, said the kiosks aren’t the best idea in some cases.

“They do help speed up the process, but they also completely disconnect the retailer from the customer,” Mr. Cohen said. “Interaction is critical.”

When the salesman is eliminated, there is no chance to offer additional items for sale, educate consumers or help build customer loyalty, he said.

“Almost all businesses should not do it 100 percent,” Mr. Cohen said.

Some retailers have built a component into their kiosk that asks customers if they want more merchandise, resulting in a bigger bill.

For instance, Royal Farms had a 20 percent increase in food service after installing kiosk-based ordering systems developed by InterMedia Kiosks in all of its 101 stores in Maryland, Virginia and Delaware.

The touch-screen kiosks offered selling suggestions, prompting customers to decide if they wanted other items with their order.

Faster food

Many companies are in the preliminary stages of trying out kiosks. Fast-food chains such as McDonald’s and Burger King are testing self-serve kiosks in a handful of restaurants.

“It’s something of interest to us,” said Jose Cil, director of operations at Burger King. “There’s still a significant amount of work that needs to be done to figure out if it makes sense from a business standpoint.”

McDonald’s agrees.

“We continue to make refinements to the kiosk concept,” said McDonald’s spokeswoman Lisa Howard. “It has to be cost-effective for the operator … and work well in terms of the bottom line.”

McDonald’s doesn’t expect to lose any workers to the kiosks.

“We still need the same number of employees so they can focus on customer service,” Ms. Howard said. “It is important for us to be able to serve customers quickly.”

Ms. Mendelsohn says the kiosks will accept orders faster and more accurately so the restaurants will need more people to fulfill the orders.

Driving away lines

The easy adoption of self-service kiosks has paved the way for nontraditional experimenters to dip into the world of kiosks.

Motor vehicle administrations, notorious for long lines and slow service, are investing in the technology to make the run-of-the-mill vehicle transactions quicker.

The Virginia Department of Motor Vehicles introduced ExtraTeller in April 2001.

The 24-hour kiosks allow customers to renew their licenses and vehicle registrations and request personal identification numbers.

Thirty-one self-serve kiosks are located outside DMV offices and 13 ExtraTellers are installed in 10 self-service centers inside the DMV offices.

Approximately 0.24 percent of transactions were done via the ExtraTeller in 2003, said spokeswoman Pam Goheen.

“There is room for growth,” she said.

The Maryland Motor Vehicle Administration tested kiosks in 1997 and began implementing them the next year.

Now the agency has 12 self-serve kiosks that can conduct 11 transactions such as vehicle registration, change of address and inspection extensions. The kiosks perform about 1,500 transactions a month.

“It is catching on slowly,” spokesman Jeff Tosi said.

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