Unit 2 Self-Service

Goods are clearly priced and set out on shelves in self-service outlets. Customers choose the goods they want and place them in a basket or trolley. The goods are then taken to the check-outs, are all paid for at once and taken by the customer out of the shop. Self-service may not be used for goods such as cigarettes where there is a counter service.

Self-service is used by the larger stores such as supermarkets, superstores and hypermarkets but can also be used by smaller shops.

Self-selection uses the same ideas as self-service except that cash points are dotted throughout the store. A customer can pay for an item at one cash point and then move to another part of the shop, choose a second item and pay for it at a different cash point. Self-selection is used by variety chain and department stores.

Retailers use self-service and self-selection because prices can be lowered. There are fewer employees which reduces wage costs. Sales increase because many customers prefer self-service and they can look closely at goods before buying them. Impulse buying occurs because of attractive displays. Customers will buy goods they did not intend to buy when they first went into the shop. Manufacturers are now own-branding and packaging more products.

Some retailers do not use self-service and self-selection because changing shops to self-service can be expensive (for example, the costs of shelving and security equipment such as mirrors and cameras). Some sales may be lost from those who prefer to be served at a counter. Goods may be stolen which will reduce the retailer’s profit.

Customers prefer self-service and self-selection because it is easy to choose goods and shopping can be quicker. Prices are clearly marked and are low, particularly if loss-leaders are used.

A loss-leader is a product which a shop sells at below cost price. The retailer hopes to attract the customer into the shop to buy the loss-leader which is usually a popular item such as bread or sugar.

While in the shop the customer will buy other items thus allowing the shop to make a profit overall. Loss-leaders work best for self-service shops where they can be placed in such a position that the customer has to pass many other products to reach them.

Some customers do not like self-service because it is difficult to obtain advice or assistance. There could be long queues at checkouts, it is possible to spend too much money because of the attractive displays.

Selling Techniques

The variety of selling techniques has increased remarkably in recent years. Some industries, such as banking, have moved enthusiastically into e-commerce, completely changing the customer's experience. Many shops now offer e-shopping and a home delivery service. However, old traditions live on. Most towns and cities still have traditional street markets!

The growth in hypermarkets, supermarkets, chain stores and multiples has had a big impact on the small business sector. Many small retailers have disappeared, but some have continued to trade profitably. One way that small specialist retailers have survived is by forming buying groups, which provide them with economies of scale and cost benefits. Franchises also help small businesses to compete. A parent company (the franchisor) grants a licence to use its name to a smaller business (the franchisee). Hypermarkets, supermarkets and railway stations increasingly have in-plants - smaller shops which operate within them and pay them rent - and these are often franchises. Another recent development is the growth in convenience stores. These are small food and grocery outlets, selling fresh milk and bread, and also newspapers, confectionery, and so on. They are often open long hours. Many are attached to petrol stations.