LEE JING YI 14552977 Essay topic : The role of self-service technology within service retailing In the 21st

century, technology becomes ever more advance. Many people agreed that technology has become an integral part of the marketplace. In addition, the advance technology is also profoundly impact the business services and consumers’ lifestyle. It results in the growing importance of service and relationships in the economy. Based on the research, some people agreed that the traditional marketplace interaction is being replaced by a marketspace transaction (Meuter et al.2000, 51). The interactions between customers and retailers have changed in this new marketplace area. Selfservice technology is one of the examples of marketspace transactions which do not have face-to-face interact between customer and retailer (Meuter et al.2000, 51). Selfservice technologies defined as technological that allow customers to perform services independently without interact with any employees (Sannes 2001,139). Although consumers are living with the fast pace of modern-day living yet not all consumers will adopt a new innovation as well as advance technology at the same rate. Therefore, retailers who implemented self-service technology are actually targeted on innovators. The characteristics of innovator are venturesome and willing to adopt a new product or service technology. In addition, retailers are also targeted on single, young and educated consumers (Meuter et al.2000, 51). In reality, some of the consumers are actively seek out checking in the airport, information kiosks at cinema, automated teller machines (ATMs), self-scanning in supermarket, banking by phone and services over the internet (Meuter et al.2000, 50). Other consumers, however, intentionally avoid such self-service technologies. Retailer should understand and know well how customers evaluate SSTs in order to improve their performance (Kuang-Jung 2005, 307).
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Another type of SST will be internet based or other on-line connection systems. Interactive kiosk is for public use that delivers information or enables transactions (PFU Limited 2011). This system is more useful and suitable when customer wants to make orders. Amazon. consumers can also find kiosks at the cinema that allow using credit card to purchase and print out the movie tickets. Many shopping malls and retail stores offer install these kiosks both inside and outside their stores. Next will be the interactive freestanding kiosks. Amazon. Internet based means deliver services through internet. Besides that. pizza restaurants. In addition. consumer allows transferring money from the savings account to another account through the ATM at any time due to ATM is on-line technology. this selfservice technology is giving advantage for banking industry. universities and credit card companies. The first type is telephone & interactive voice response (IVR) systems. It able to help retailers and consumers determine availability of a product (PFU Limited 2011).com is one of the popular webpages that allow consumers make order and purchasing through online. airlines industry. 97). customer surveys and customer billing inquiries (Bitner. For example. Ostrom and Meuter 2002. online shopping and bill management services are the examples of internet based services. For instance. These types of kiosk bring convenient to retailers and consumers. ATMs and pay-at-thepump gas stations are also examples of on-line technologies.com has its customized and efficient services (Bitner. Ostrom and Meuter 2002. 99). Usually. insurance companies. interactive freestanding kiosks 2 . In addition. customer calls to the bank for enquiries.There are four types of self-service technology interfaces are being used. In banking industry. Internet banking.

Ostrom and Meuter 2002. Digital Video Disk (DVD) and Compact Disc (CD) based technologies which normally used for educational purposes. colleges and universities provide education classes by using video and CD format. motivate. banking industry and retailers do not need to pay so much on labour cost and training cost once they have implemented 3 .are also popular and friendly use in the airport that for consumers quick checkout and print airline tickets. increase customer satisfaction and loyalty and reaching of new customer segment (Bitner. self-help videos and training videos. Many people believe that using video media to teach student will increase the passing rate due to video have sounds (Chang-tse 2005. Ostrom and Meuter (2002. The last type of self-service technology is Video. 98). receive information and train themselves. Besides that. in the business area. Banking industry will use this media introduce new services to consumers and also train their employees. ease of use and entertainment from using the technology. 98). The main advantages to banking industry from successfully implementing SSTs are cost reduction. According to Bitner. SSTs offer them convenience. GE Medical Systems provides video and satellite-television-based (just in time training) on its equipment for hospital customers. time saving. It allows customers to train themselves anytime. Many industries have implemented self-service technology especially banking industry due to self-service technology will offer advantages to both providers and consumers. Examples include health information websites. On the other hand. This type of SST allows customers to learn. 78). For the customers.

In order to satisfy customer satisfaction. For example. Therefore. The average cost of paying IVR is 45 cents and interpersonal telephone call is $7. 193). SSTs have longer and flexible hours of operation therefore SSTs are frequently help customers to solve immediately problems. self-service technologies definitely will reduce the costs. 98). The next advantage of implemented SSTs is SSTs able to increase customer satisfaction and loyalty. Lawlor and Mulvey 2010. SSTs able to solve customers’ intensified need. 4). Normally. 4 . the uses of SSTs in bank industries enable to reduce the cost while enhancing service efficiency and effectiveness. For examples. Customer satisfaction is the degree to which customer expectations of a product or service are met or exceeded. 15). 4) Besides that. Unfortunately. The costs of paying IVR and interpersonal telephone call are cheaper than paying the labour cost and training cost. Almost every business firm agreed that “customer satisfaction is vital for success” (Barlow and Maul 1999. SSTs offer customer convenience. service retailers who work in banking industry must learn and know what drives customer satisfaction. Ostrom and Meuter 2002. However. As mentioned above. Lawlor and Mulvey 2010.the self-service technology. the operating costs of mobile banking are one-fifth of comparable banking services at a traditional bricksand-clicks bank (Proença 2011. one of the customers needs the cash immediately due to his father needs to have an emergency operation in the hospital. time saving. banking industry will face the increasing of expenses if the service technology doesn’t gain adoption from consumers because of the payment of operational workers and new machine technology (Kelly. ease of use and entertainment from using this technology (Kelly.60 (Bitner.

one of the banking customers said. The customer gets satisfaction on it and this is how the SST helped alleviate their concerns. 139). There are 68% satisfying incidents about satisfaction with the SST was driven by the benefits that provided by using SSTs. All of these alternatives could satisfy the online customers and so online customers are the loyal group (Meuter et al. successfully implemented the SSTs such as Web-based SSTs will expand the company customer base. SSTs in one of the ways to create new channels to reach new customer segments.the hospital only receives cash yet all the banks were closed. The last reason and advantage for banking industry to implement SSTs is reaching of new customer segment. many customers agreed that SST was easier to use than the interpersonal service option due to SST has a straightforward process and have simple steps. SSTs will help him as he could get the money in a hurry from the ATM.2000. In this time. provide “alternative delivery channels” in the banking industry as alternative from ATMs to telephone banking or from PC-based to wireless services.2000. SSTs are always bringing convenience to everyone (Sannes 2001. Ostrom and Meuter (2002. For example. For example. New customer segment is vital for every company as the more customer segments will increase the company profit. banking industry can advertise their service program to world-wide markets through the Web-based SST in order to 5 . Besides that. According to Bitner. 55). 98). For instance. Customers observed that the SST was a better alternative than the previous interpersonal method of service delivery. 55). "I prefer SSTs because it is simple and convenient for me as I just only put my card in to the ATM and followed the easy instructions then I got my cash and a receipt (Meuter et al.

there is challenging for implement SST as well. the telephone line in banking industry is important. customers are not able to log in to the banking website to transfer money or check transaction record. banking industry hard to increase profitability. For instance.increase the new customer segment and eventually increase the profit.2000. Technical failure means the technology always breakdown while the customer interacts with the technology. 79).2000. 4). SSTs do not have face-to-face communication therefore hard to maintain good relationship between retailers and customers. (Meuter et al. In addition. Furthermore. the ability of banking industry to keep the SST up-to-date and improve the SST (Chang-tse 2005. This approach could make banking industries to become successful in the business world. The technology failure will make customers feel annoying. for customers who prefer mobile banking. it would break down as well. In contrast. the way banking industry manages and prevents SST failures. Sometimes. design of the SST. There are some factors that affect SSTs adoption and uses which are presentation of the services. 57). the way banking industry advertises the SST. 6 . In fact. the larger groups of consumers dissatisfy SSTs because of technical failures. customize services and offer flexibility to consumer needs (Kelly. Once the technology failure. Once there is lost customer commitment and loyalty. Sometimes. 57). broken ATM and pay-at-the-pump machine (Meuter et al. not every consumer adopts the self-service technology. Based on the research. consumers will avoid SSTs even they favorable attitudes towards technologies because SSTs cannot totally replace the personal interaction. SSTs can also improve service quality perceptions. internet brokerage services.Lawlor and Mulvey 2010.

this is the challenging for banking industry which implementing selfservice technology. Furthermore. they will feel annoying and dissatisfied with the SSTs (Meuter et al. More and more companies and banks have moved to SST and removed all the other service options. banking 7 . Therefore banking industries have to provide phone or on-line chat support for an Internet based technology.2000. SSTs should make the application user-friendly.Therefore. For SST’s to work. Banking industries have to manage and prevent the SSTs failure and also have the ability to do service recovery all the time (Meuter et al. 57). In fact. Ostrom and Meuter 2002. He finds that the instructions are so complicated and he is dissatisfied with the new service. For those customers who are not familiar to SST or not technology savvy. Yet. 57).2000. Not all the customers understand how to use the various technologies. the way of SST’s presentation of the services also quite important as it is also one of the challenging for banking industries and retailers. 57). The accurate ways to implement SSTs is very important. customers must be technology savvy else they do not know how to use the SSTs. To solve the problem. SSTs can be simple and also can be complicated. As a result. SST’s presentation of the services should provide as simple as it can (Meuter et al. Banking industries implemented the SSTs by research what are the customer wants and needs and focus it (Bitner. SSTs should to be designed for customers and not technicians. William’s father is not technology savvy customer. In order to ensure customer adoption and use. For example.2000. this is the challenging for SSTs which hard to satisfy every consumer. He does not understand the instructions which provide on the banking website therefore he cannot transfer money through internet. 104).

105).industries use focus group to understand customers’ needs (Bitner. banking industry actively promote the use of SSTs as in increase the awareness of new SSTs. Customers must be aware the benefit of new SST before they try it. increase customer satisfaction and reach new customer segments (Bitner. one of the reasons that influence customers stop using SSTs is failure of technology and service. 104). Ostrom and Meuter 2002. banking industry provide some incentive could lead to customers to try the SST (Bitner. Ostrom and Meuter 2002. 104). 8 . Customers will have a negative attitude about SSTs in banking industry if customers observe they are only implementing the SST due to cost saving. 104). banking industry should be very clear on the strategic purpose of the SST. Previously. Obviously. banking industry always need to develop robust systems and provide for on-the-spot recovery whenever possible. Banking industries should listen to customers’ perceptions (Bitner. Sometimes. Ostrom and Meuter 2002. Ostrom and Meuter 2002. 81). Additionally. banking industry held marketing activities to introduce new SST. As mentioned before. Moreover. (Bitner. the simple SST process and well-designed will help to minimise the failure. 105). Ostrom and Meuter 2002. SSTs in banking industry will successful if banking industry knows how to prevent and manage failure. it can bring positive feelings to the customers about the SST (Chang-tse 2005. Adequate customer research is the only way to achieve this. Besides that. By doing this. Banking industry should let customers know the benefits of the SST and also provide benefits to customers over and beyond what the alternative provide. In fact. SSTs able to reduce costs.

Electronic transactions that used by Commonwealth Bank include ATM. Commonwealth Bank customers are conducted electronically. Commonwealth bank not only targeted on young customers yet also targeted on older customers and customers with a disability. Ostrom and Meuter 2002. banking industry implemented SSTs by preparing for constant updating and continuous improvement. 105). Currently. One of the Australia banks which named Commonwealth bank has implemented SSTs long time ago. 2011). Electronic Funds Transfer Point of Service (EFTPOS). The Commonwealth Bank of Australia (CBA) is one of Australia’s leading providers of integrated financial services (Commonwealth Bank of Australia. This trend of use SST has been growing quickly. 2011). 2011). 105).Lastly. Ostrom and Meuter 2002. In addition. SST is greater due to it generally offer customers greater flexibility. telephone banking and internet service (Commonwealth Bank of Australia. As mentioned before. Not every consumer familiar with the new technologies therefore Commonwealth Bank provides long-standing information and education program (Australia Human Right Commission. Commonwealth bank is commitment to all Australians that ensure flexibility and choice in providing a varied range of financial products and services (Commonwealth Bank of Australia. For the elderly and customers with disability. self-service technologies are very common in the banking industry. 1999). Banking industries have to always update the technology and make improvement on it in order to get continuously successfully in the business world (Bitner. SSTs will easier to out-dated due to the rate of evolution relating to technology service delivery is so fast (Bitner. bank will special assist 9 . efficiency and convenience.

them by the way of additional services and fee-free banking (Commonwealth Bank of Australia. they can do basic banking transactions securely over the NetBank at home. consumers do not have a lot of time hence a third of bank customers would choose the branches that bring them convenience (Anthill Magazine. Commonwealth Bank selected IBM Business Consulting Services and Eontec Ltd as the successful tenderer to upgrade its online banking service (Commonwealth Bank of Australia. NetBank is allowing to access 24 hours a day. Based on the research. Nowadays. commonwealth bank selects consortium to upgrade online banking system in Year 2003. According to Hugh 10 . Every customer included older customers and customers with disability. 2010). NCR claims that Australians have adopted self-checkouts at almost double the rate of US and European customers (Anthill Magazine. there are over 4000 ATMs across Australia which is the highest coverage of any bank in Australia. 2011). 2010). Next. Commonwealth bank indicate it is one of the ways that they put customers’ needs first (Commonwealth Bank of Australia. According to Commonwealth Bank (2011). NetBank is Commonwealth Bank’s internet banking service (Australia Human Right Commission. 2003). 1999). NCR is a developer of self-service technology. Commonwealth bank provides internet banking. 7 days per week. 2011). as mentioned above. It shows that. It is so convenient for everyone. customers able to access their money from ATMs anytime and anywhere. There are thirty-nine percentage of Australians would choose bank that offered them self-service for transactions such as bill payments and statement printing.

regardless of age. Our online customer base and transaction activity continue to grow rapidly. "The internet banking service after upgraded will guarantee that Commonwealth Bank customers continue to have market leading online access and services available. Once the banking industry implemented successful SSTs. Commonwealth Bank aims to ensure all Australians. have the opportunity to access its services. it could bring many advantages to both banking industry and customers. self-service technology is vital and valuable to banking industry. (2588 words) 11 .Harley who is the Commonwealth Bank’s Group Executive. said. In conclusion. disability or mobility.” He also said that upgrade the online banking system provide the increased capacity to support future customer growth and will also expand the range of services available online (Commonwealth Bank of Australia. Banking industry should understand and know well how customers evaluate SSTs in order to improve their performance and eventually increase profitability. 2003).

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