What Self-Service Retail Is Teaching Banks About Self-Service Banking

The retail experience underwent an irreversible transformation following the store closures and stay-at-home orders during the early months of the pandemic. The global shift to eCommerce brought with it heightened customer demands for speed, convenience and payments flexibility, and consumers maintained these self-service retail requirements as they returned to shopping in physical stores.

Meeting these new demands is a tall order for many retailers, who must undertake complete back-end system renovations to incorporate the latest digital technology. Many are finding that partnering with third-party providers is the key to success, rather than fruitlessly wasting scarce resources.

• Self-Service Is Quickly Becoming the New Normal
• Retailers Deploy AI to Improve Customer Experience
• Retailers Are Transforming In-Store Experiences to Meet Customer Demands
• Retailers Must Work Cooperatively with FinTechs and Other Third Parties to Satisfy Customer Expectations

Self-Service Is Quickly Becoming the New Normal

Customer habits evolved quickly over the past several years as eCommerce grew in popularity. Now consumers want their in-person retail experiences to be as fast and seamless as their online ones. Many retailers have found that self-service options are crucial for meeting these expectations.

Customers find lines in retail stores to be a major pain point.

One contributing factor to the rise in self-checkout options is their ability to accelerate transactions and reduce lines. A recent study finds that 82% of consumers will actively avoid a business with a line of any length.

Experts estimate that Americans spend roughly 37 billion hours in line per year, with retail stores being the primary location where they wait. Customers therefore view the self-service kiosk as a merciful break from the tedium.

Retailers Deploy AI to Improve Customer Experience

Few technologies have made a bigger splash in recent times than AI, with the technology poised to replace countless occupations in the years ahead. The retail sector is embracing this transformation, with stores developing strategies to harness AI in various back-end and customer-facing applications.

Meanwhile, on the front end, AI could eliminate 18% of store associate positions, 53% of shopper queries and 73% of assorted in-store tasks like checkout and shelf-stocking. At present, just 13% of grocers leverage AI in more than one store area, but this number could multiply fast as AI proves its worth.

Retailers must upgrade internal systems to accommodate AI.

Most retailers need to upgrade their back-end systems before they can begin to harness AI, with 83% of respondents in a recent survey saying they can benefit from AI only after modernizing their infrastructure. This is far easier said than done, however, with just 48% of respondents saying their existing infrastructure is even capable of undergoing modernization. Most businesses will need to replace their systems entirely, as well as overcome roadblocks such as resource limitations, organizational resistance and poor communication among stakeholders.

Retailers Are Transforming In-Store Experiences to Meet Customer Demands

Retailers are facing greater competition than ever — not just from other retailers, but also from massive eCommerce conglomerates. Just keeping up requires a complete transformation of their existing businesses, which can be a daunting challenge.

Retailers Must Work Cooperatively with FinTechs and Other Third Parties to Satisfy Customer Expectations

The surging popularity of eCommerce means customers have more options than ever when it comes to retail, making them more inclined to change brands. Recent studies have found that 55% of consumers abandoned a brand entirely because of a poor in-store experience, knowing they easily can find another seller to satisfy their needs. This means that retailers must excel in customer experiences and payments, no matter the cost.

Retailers found that the following technologies held the most promise for customer retention:

• Mobile apps, with 78% of retailers saying they improved customer loyalty
• Ability to shop in-store and order for delivery (76%)
• Barcode and QR code scanner access (74%)

Implementing these technologies can be both time-consuming and expensive, especially for smaller retailers with limited resources. Fortunately, there are a host of third-party retail service providers equipped with the necessary expertise and technology to do the work at a fraction of the time and cost of developing new tools in-house. Partnering with these experts should be top priority for any business wanting to pull ahead in an increasingly competitive environment.

Similar to banks and credit unions, retailers need to continue progressing to a truly omnichannel approach. Regardless of the channel that customers choose to interact with, they need to offer the ability to shop, bank, etc. across multiple channels. This gives the customers the ability to shop when, where, and how they want. The retailers that are able to offer the most seamless experience, regardless of channel will rise to the top.
Personalization is going to be the key to success for virtually all businesses going forward. Regardless of the channel, customers want white glove service. In order to be successful and meet these expectations, it’s paramount that financial institutions, retailers, etc. are partnering with leading technology partners in their vertical and as important, utilizing the vast amounts of data that they have at their fingertips.”