Attack of the Movie Machines

By Robert Janelle

Originally Published in the Kingston Whig-Standard March 21, 2006

When you walk into VideoSelf, the usual sights are missing. There are no shelves full of movies, no employees wandering the rows in company T-shirts. Just a plain blue wall and a series of terminals that look like bank machines.

The only human working in the store at 481 Princess St. is owner Nic Di Cristo, who stands in his booth during the day to hand out membership cards and give demonstrations.

“Everybody [who] comes in for a demonstration is more or less blown away,” he says.

The system is simple. A customer deposits money onto his or her membership card. He then inserts the card into one of the reservation computer terminals and selects the movie he wants to rent or purchase from a list on the screen.

A machine that operates like a giant jukebox retrieves the DVD and it slides out a slot.

“A lot of people prefer going through the list rather than walking through aisles,” says Di Cristo.

Since he opened the store in December, Di Cristo has given out about 800 membership cards.

He isn’t the only business owner who staffs with machines instead of humans.

Many area gas stations now offer an option to pay at the pump, and Home Depot and Loblaws now offer self-serve checkout machines.

In early 2004, Home Depot began a year-long pilot project to see if payment machines would work. They explored three different technologies before settling on a system that could best handle everything from a bag of nails to a long piece of lumber.

Home Depot spokesman Nick Cowling says the machines are most popular with people buying small baskets of items.

“They have been extremely popular,” he says. “The average is much faster than going through a human cashier.”

Meanwhile, at the Loblaws on Princess Street, several customers are paying for their groceries at automated checkouts.

“I just started using them when they came out,” says customer Chris Hannah, as he collects his grocery bags.

“Usually I find there isn’t a lineup.”

Hannah says he sees the self-serve checkout becoming more common in retail stores.

“Pretty soon we’ll just have one person standing there and people stocking shelves,” he says.

Nearby, Janet Evans is feeding coins into the machine to pay for her groceries. She enjoys the speed the machines allow.

“It’s faster � usually you don�t have to wait in line,” she says.

She says she was wary of the new technology when the machines arrived. But, when she saw people of all ages paying with them, Evans figured it couldn’t be that hard.

Still, she’s not crazy about the concept.

“I think it’s bad because it takes away jobs,” she says. “They could’ve opened more cashes.”

Jeff Wilson, senior vice-president of public affairs for Loblaw Cos. Ltd., said people won’t lose their jobs.

“This technology is not technology to replace staff levels,” he says, explaining that the idea behind the machines was to make the busier hours run more smoothly.

He adds the machines were initially being put in new stores, where no human cashiers would be losing jobs. But large, older stores have had cashes removed to make room for the automated checkouts, he says.

At Home Depot, no jobs were put at risk by the machines, Cowling says. When the stores removed banks of cash registers to make room for the automated versions, the cashiers were reassigned to the sales floor, where they�re available to assist customers.

“We’ve got a lot of customers with a lot of questions,” says Cowling.

He says the chain has no plan to expand its use of the machines. “The one bank seems to be working and we don’t want to take away the human option,” he says.

Jay Handelman, an associate professor of marketing at Queen’s University, says it�s a trend that will only go so far.

“Personally, I see a limit,” he says. “Even technologically- savvy consumers want some kind of human interaction.”

Handelman says stores save between five and 10 per cent of their costs by replacing employees with machines. But there�s still the initial cost of bringing in the technology.

“You’re trading employees for an up-front capital cost,” he says. “I think it�s a two- to three-year payback period, which is pretty good for an investment. But that’s assuming you’re not losing customers.”

He adds that this trend began as the technology became available and is not being driven by the consumers.

At VideoSelf, Di Cristo says that’s simply not the case.

“What the consumers are demanding is the price,” he says. “Lower overhead obviously allows us to rent cheaper.”

With the computer system verifying how long a movie has been checked out and then deducting the price from the membership card, Di Cristo is able to rent new releases for $2.30 (tax included) for six hours or $3.80 (tax included) if the movie is returned before midnight the next day.

Handelman says the real growth in automated technology will be in the home, citing personal video recorder technology as a current example.

“With PVR technology, I can stop live TV and go get a snack,” he says. “The TV will start looking more like the Internet.”

Handelman does not see these increases in technology as a threat to workers, especially in Kingston.

“When I think of Kingston, I still think of service,” he says, citing the importance of service to the city�s tourism industry. “Machines provide convenience, not service.”

If the trend does continue, Handelman sees a new business opportunity for entrepreneurs: opening stores that bring back “the human touch.”

“This creates the opportunity for another niche-market offering,” he says. “I think that will push other stores to have better service.”