Commentary

Right time to step towards a self-service society

Right time to step towards a self-service society
Only 3,000 self-checkout terminals were deployed in the Asia-Pacific region in 2008, compared with 74,000 self-checkout terminals in North America. PHOTO: BLOOMBERG
Published: March 18, 4:11 AM
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In his recent Budget speech, Deputy Prime Minister Tharman Shanmugaratnam outlined a three-pronged approach for Singapore’s next phase of economic restructuring. This includes the need for a change in social norms, including consumers accepting self-service as a norm. How can we move towards a self-service society and what are the benefits of doing so?

Over the years, self-service technologies (SST) have transformed many industries in Singapore and worldwide, from automated teller machines (ATMs) in banking services to e-commerce in the travel industry. Advances in information technology have created numerous opportunities for SST to provide significant gains in efficiency and convenience. This has resulted in savings for businesses, which are passed on to consumers in the form of lower prices and better service. According to the Information Technology and Innovation Foundation in the United States, the average estimated cost for an online transaction is only S$0.25, a fraction of the estimated cost of S$5.39 for a transaction at a physical branch.

SSTs come in many forms, including electronic kiosks, Internet services and mobile applications. Among the public in Singapore, receptivity towards SST initiatives varies greatly, depending on the type of service. For example, the e-Government Customer Perception Survey conducted by the Ministry of Finance and Infocomm Development Authority of Singapore last year indicated that 88 per cent who visited government websites chose to do their transactions electronically via online services in the past 12 months and 96 per cent were satisfied with the quality of government e-services.

IMPROVING PRODUCTIVITY AND SERVICE

In the retail sector, as of the end of 2008, there were 92,600 self-checkout units deployed globally, where customers can pay for purchases without any direct input by a traditional cashier. The number is estimated to reach 430,000 units by the end of this year, according to a report by Retail Banking Research. However, the report also indicated that in 2008, there were 74,000 self-checkout terminals in North America and 15,000 in Western Europe. But only 3,000 were deployed in the Asia-Pacific region. In fact, NTUC FairPrice in Singapore started to invest in self-checkout counters only between 2011 and 2012.

Despite this, local consumer receptivity seems rather encouraging. A survey conducted by FairPrice on about 600 customers found that 99.4 per cent of customers who used the self-checkout system were satisfied with it, while 83.5 per cent said it was an effective and fast alternative method to pay for items.

SST has the potential to be a major force for growth in productivity and improvements in quality of life. As SST continues to become more acceptable, more convenient, and more efficient, companies will embrace it to operate more productively and to better serve their customers. This is particularly so in countries such as Japan and Singapore, which have low fertility rates and an ageing population.

SST can also make service encounters more accessible for individuals with different language backgrounds, which is particularly important in Singapore. Kiosks and Internet-based applications can offer features such as multilingual interfaces to make services more user-friendly. For example, a ticketing office of a tourist attraction may use a multilingual kiosk to serve its local consumers and international tourists with different language backgrounds, thereby offering a more effective service than any single employee could possibly provide.

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