Sears: An SST Queuing System Failure

By Todd Bacile | June 29, 2012

SearsThe economics of customer waiting is important to any service firm. For many consumers there is an economic cost associated with waiting: people value their time and waiting often is perceived as wasted time. Firms realize that waiting presents an initial negative perception of a consumer’s service encounter. Successful service managers attempt to offset the possibility of waiting by forecasting demand and managing capacity. However, nobody is perfect and waiting for service is a fact of life for most consumers.

Firms manage waiting by using queuing systems. Multiple forms of queue systems exist, such as waiting in a single file line at a bank, waiting in your choice of multiple lines at a grocery store, or choosing a number at a deli counter. An alternative queue management system is to use self-service technology (SST). These are often seen as stand alone kiosks that customers use to enter information to complete a transaction.

Really successful companies take waiting a step further and attempt to conceal the wait. The word “conceal” can be associated with a negative connotation, but in this sense I am using “conceal” in a positive way. Firms that conceal a wait do so in a manner that a customer is entertained, involved, or distracted by another activity so as to not notice how long they are waiting. A classic example is Disney’s theme parks: while patrons wait in long lines at the theme park, waiting customers watch animated characters and displays that are strategically positioned around those waiting in lines. In this manner, waiting is not lost time. Customers have something to focus on during their wait.

Sears retail stores uses a queuing system along with a strategy to conceal a wait, branded as Ready in 5 Guaranteed. The system is easy to use and a great idea — if Sears would not have set an initial expectation that it was not able to meet. You see, Sears has a large sign prominently displayed next to its kiosk (and also on its website) stating that 100% of its service encounters are completed within 5 minutes when using the system. A customer enters their purchase information into the kiosk, which then notifies warehouse workers to bring the appliance up front to the customer. Al the while, a large screen TV displays a running timer next to the customer’s name.

Sears has a great idea — and it worked initially. The person I brought with me discussed for a few minutes how wonderful the system is — and we were entertained / distracted from focusing on the wasted time spent waiting. This is a novel way for the customer to see a light at the end of the tunnel. It didn’t quite work out that way, though. Sears stopped the counter just shy of 5 minutes and then re-started a new counter from 0:00. Watch the 1-minute video to view my experience. Sears: you have the right idea, but you need to work on front-line employees correctly executing your strategy.

Todd Bacile is a marketing doctoral candidate and instructor for Electronic Marketing and Services Marketing in the College of Business at Florida State University. Please visit his website for more information regarding his classes and research within e-Marketing and services marketing topics. You can contact him on Twitter @toddbacile

Advertisements

SMS / Text Message Marketing: a 2-minute tutorial

By Todd Bacile | June 29, 2012

Are you a retail business owner who wants to use text message marketing (also known as SMS marketing), but have no idea how it works or how you would use it? Please view the video displayed below for a real-world, simple example of how to incorporate text message marketing into your retail business (click here if the video does not load).

Statistics on mobile phone usage reveals text messaging as the most used form of communication by consumers. People now communicate more with text messages than voice calls when measured by volume. In addition to the sheer volume of text messages sent, there are three other benefits firms should be aware of when considering the merits of text message marketing:

  1. First, consumers attend to text messages they receive more often than e-mail, Facebook, and Twitter messages. This means your business communication sent to consumers has a greater chance of being received, opened, and read.
  2. Second, the cost for text message marketing campaigns is extremely low compared to other traditional forms of marketing. In most cases a retail business can pay a mobile marketing firm a flat monthly fee of $100-to-$200 to use an existing technology infrastructure, plus a fee of 5-to-8 cents per text message sent. In addition to low-cost, these mobile marketing firms also possess knowledge of the legalities associated with text message marketing, meaning that you do not need to become an expert in mobile marketing laws.
  3. Third, redemption rates are much stronger (i.e. the response rate from consumers that generate a purchase) for text message promotions compared to other traditional promotions. For example, traditional paper coupons disseminated via print media and mail historically produce about a 1%-to-2% redemption rate in the U.S. In comparison, text message promotions (also referred to as mobile coupons or m-coupons) often generate redemption rates that approach or exceed 10% in the U.S.

Todd Bacile is a marketing doctoral candidate and instructor for Electronic Marketing and Services Marketing in the College of Business at Florida State University. His research on mobile marketing topics has been presented and at numerous national marketing conferences and published in the Journal of Research in Interactive Marketing. Please visit his website for more information regarding his research within e-Marketing and services marketing topics. You can contact him on Twitter @toddbacile

Pinterest in under 500 words: what it is & why firms should care

By Todd Bacile | June 25, 2012
PinterestIn recent months a fast growing social medium has emerged: Pinterest. According to Shareaholic close to half (48.81%) of all web traffic is referred from Google, followed by Facebook (6.38%), Yahoo (1.61%), StumbleUpon (1.29%) and Bing (1.21%). Pinterest came in sixth at 1.05% (beating out Twitter at 0.82%). Furthermore, Mashable.com states that the site refers more visitors to a firm’s web site than Google+, YouTube, and LinkedIn combined. This has recently led many to ponder: what is Pinterest? This social site uses the concept of people creating an online “pinboard” of images. Pinterest enables users to be redirected to websites once they click on a picture. Not every business should be on Pinterest. However, if your products are visually appealing, it would be a wise strategic move to become active on the site.

Pinterest opens a whole new world for users by helping them create and plan for a future event or occasion whether it be imminent or far off in the distance. Although a majority of account holders are women, Pinterest does not discriminate and can be utilized by men all the same. Users can create their own boards to organize and inspire their personal style. Subjects are far ranging from women’s shoes, women’s clothing, and make-up, to BBQ recipes, home brewed beer, and weight lifting/training tips (to name a few).

Individuals and businesses alike can create online show rooms that showcase personal taste and creativity. Since the site is still relatively new to the social media playground, everyone who uses it discovers new ways to market different things. Some people make their boards public to enable other users to add pins to their boards, a very open-ended approach to constructive criticism. Some users are using it to drive more traffic to their website or blog. Other users are creating a resume’ like profile in which their boards consist of pieces of work they have created, things that inspire them, and their hobbies. This is a very modern approach to the typically dull job search for all parties involved. A resume’ setup would typically only work for users whose focus is for creative professions such as graphics, design, stylists, and video producers.

A business may be considering its involvement in Pinterest: is the juice worth the squeeze (i.e. will my firm see a return on investment)? New studies suggest that Pinterest users are twice as likely to buy a product that they saw on Pinterest rather than Facebook. One particular reason is that customer reviews are a strong influence on buyer behavior in today’s marketplace. With Pinterest you can see how many times a pin has been re-pinned (i.e. how often has someone shared a picture). A greater number of re-pins sends a signal that consumers view something favorably. Facebook still has the upper hand in a larger user base, but Pinterest is a strong contender due to its ability to display and categorize vivid images of products, which ultimately makes searching for these items easier and less cluttered.

Todd Bacile is a marketing doctoral candidate and instructor for Electronic Marketing and Services Marketing in the College of Business at Florida State University. You can contact him on Twitter @toddbacile

Tessa Revolinski contributed to this post. She is a recent graduate of Florida State University and has the proud distinction of having a higher Klout score than her e-Marketing professor. You can follow Tessa on twitter @mamaswoosh