Evaluate the Role and Benefit of Self-Service Technology to Service Retailers

In today’s world, information technology advancement has prompted the development of self-service technologies. Self-service technologies (SSTs) are the technological interfaces that allow customers to co-produce the services to serve by their own. It has brought significant changes to service retailers as it has changed the way that how firms provide services to customers and how customers interact with firm. It enables customers perform entire services by themselves without direct assistance from employees and makes service transactions become more accurate and convenient.

Kiosks, Internet, interactive voice response, and mobile services are types of SSTs that using by firms. (Castro et al. , 2010, Meuter et al. , 2000,NCR, 2008 and NCR, 2009). In this essay, the roles and benefits of SSTs to service retailers will be discussed. In regard to the roles of SSTs to service retailers, it performs a linkage of technology with customers. In recent years, the advance of technology has stimulated the grown of customers using technology.

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To catch up with the growing technology dimension in service provision, Parasuraman proposed a pyramid model of services marketing by extending Kotler’s triangle model of services marketing. Triangle model of services marketing refers to external marketing between company and customers, internal marketing between company and employees, and interactive marketing between employees and customers. External marketing-activities belongs to product, price, promotion, place which are emphasized in the marketing of goods.

Internal marketing is related to company should treat service employees as internal customers and provide suitable training and motivation to them, and so that employees would serve customers well. And, interactive marketing refers to manage interactions between employees and customers. As information technologies play an increasingly important role in serving customers, the triangle model needs to be supplemented by a new component reflecting the current proliferation of technology in the marketing process. Parasuraman (1996) proposed an enhanced pyramid model with technology as a third dimension.

The pyramid model includes three linkages, which included company-technology, technology-employee, and technology-customer. It indicated that technology in the service industry was increasingly unavoidable. Thus, a combination of SST channels provided by retailers can link up the technology with customers as SSTs are technological interfaces that enable customers to produce a service independent of direct service employee involvement. Second, SSTs allow customers to get optimal service experience by themselves.

It has changed the way that how customers interact with firm. Through using a wide range of SSTs, customers can engage in service co-production technologically to replace the services which produce by employees directly. Some examples of SSTs include automated teller machines (ATMs), automated hotel and airline check-in or check-out, banking by telephone and services over the Internet. For instance, almost half of the retail banking transactions are now conducted without the assistance of a bank teller (Lawrence and Karr1996).

The appearance of automated teller machines (ATMs) allow customers access their bank accounts in order to make cash withdrawals, debit card cash advances, check their account balances or make the bill payment. At the same time, online banking systems also allow customers to transact banking tasks through online banking. Thus, SSTs enable customers to produce service by their own instead of the direct service from service employees in order to get the optimal services.

In regard to the benefits of SSTs to service retailers, cost reduction on labor cost is one of the significant benefits. Rising Labor costs have encouraged companies to explore more self-service options that allow customers to perform services for their own. As SSTs allow customers to co-produce services to serve themselves, the needs on employee services would be decreased. Thus, to service retailers, they will hire fewer employees to produce the services, as a result, the hiring cost and the training cost of a firm would be decreased.

For example, regarding the use of SSTs in airline service, passengers can check-in at airport by using the check-in kiosks themselves instead of lining up in front of the service counter to check in. According to SITA’s Airline IT Trends Survey ?ndings (SITA, 2009), it forecasts that the use of agent service for check-in will be dropped almost 30% and use of self-service check-in kiosks will be increased almost 8% by 2012. It shows that there is a trend that passengers are more likely to use the SSTs to serve them by their own and the use of agent services will be decreased.

So the airline companies can hire fewer crews for providing the agent services and it would then reduce the cost of training their employees for performing the agent services. According to Forrester Research (Jones, 2004), self-service check-in costs an airline 16 cents per passenger as opposed to $3. 68 per passenger by means of an airline agent. Thus, it means that a company which has employed SSTs may lower their cost as the cost of employing SSTs is much lower than the rising labor cost.

Another benefit of employing SSTs to service retailers is that it may gain a competitive advantage over competitors. Delivery of high service quality is a primary source of competitive advantage for service providers. As co-production through SSTs has become more popular in consumers’ daily life, assessing SST service delivery is instrumental to obtaining that competitive advantage. SSTQUAL is a fundamental scale intended to obtain a global assessment of SST service quality across contexts. Yet, Parasuraman groups the ten assessment items into five dimensions.

Parasuraman et al. (1988; Parasuraman, Zeithaml, and Berry 1991) identified five generic dimensions that customers use as criteria in judging service quality, which are reliability, responsiveness, assurance, empathy and tangibles. Reliability refers to the ability of firms to perform the promised service dependably and accurately. Correct functioning and accurate service delivery performed by SSTs have been cited as important in technology-based service quality (Wolfinbarger and Gilly 2003). Responsiveness refers to willingness to help customers and provide prompt service.

Customers expect SSTs can reduce the time of services as it can deliver services immediately and respond to inquiries promptly (Yang and Jun 2002). Quick service delivery and prompt response of SSTs enhance customers’ perceived service quality toward SSTs (Dabholkar 1996). In regard to assurance, it may refer to the knowledge and courtesy of employees and their ability to inspire trust and confidence. However, some consumers believe SSTs would be more effective at producing the service than an employee to deliver the service as there would be man-made ??fault made by employees.

Thus, SSTs may avoid the mistakes from employees and may perform the services much more accurate. In terms of empathy, it may refer to how firm provides individualized attention to its customers. As SSTs have the ability to recognize customer needs and tailor service options through customer co-production (Auh et al. , 2007, Ganesh et al. , 2010, Mathwick et al. , 2010 and Srinivasan et al. , 2002). Service customization through SSTs leads to a better customer-service match, signaling higher service quality (Ostrom and Iacobucci 1995).

For example, regarding the use of SSTs in airline service, customers can reserve and pay for the airline tickets at anytime by using internet or their own mobile phones, pick up boarding passes and check-in at airport kiosks instead of lining up in front of the service counter, so it could save time for customers and enable customers to make use of their time flexibly in a most suitable way. For tangibles, it refers to appearance of physical facilities, equipment, personnel, and communication materialsdimensions. SSTs are ideally suited to handle many situations because of their pervasive nature and relatively easy accessibility.

Apart from good quality services of SSTs can bring competitive advantage to firms, another benefit of SSTs to service retailers is that SSTs may increase the chance for firms to reach customer satisfictation. Customer satisfaction can be regard as a measure of how products and services supplied by a company fulfils or exceed customer expectation. As many consumers are fascinated with the capability of various SSTs and seem pleasantly surprised when the SSTs perform successfully as many SSTs are still in their infancy, so it would probably easier to reach customer satisfaction. Retailers can make use the variety of SSTs to increase ustomer participation, and it may help firms to build up the customer value as customers are delight with it. All in all, as the advance of technology today’s world, it is inevitable that SSTs would become more popular for service retailers to employ it. It allows cutomers to co-produce service by themselve and find the most suitable service by their own. The use of SSTs not only lower the labor cost of the retailers, but also can acheive competitive advantage as the improvement on the service quality of companies and reach customer satisfication through the successful performance of SSTs.

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Evaluate the Role and Benefit of Self-Service Technology to Service Retailers. (2016, Sep 29). Retrieved from https://graduateway.com/evaluate-the-role-and-benefit-of-self-service-technology-to-service-retailers/