Cost Control Killed the High Street

A recent visit to East Leake Co-Op was not the usual pleasant experience. The nice lady who tells about the antics of her parakeet was not on duty. None of the normal tills were manned and the kiosk had a long queue of people wanting newspapers and small cardboard packets of highly taxed carcinogens. So, we took our trolley to the self-service till. And that is when my wife and I started to spoil each others day.

The experience made me think. Could it be that the rampant growth in the self-service till in supermarkets - where often cost saving is achieved to the detriment of value delivery - could be partially responsible for killing the high street?

We struggled to weigh several items of fruit (at least 5 a day) and to keep everything on the scale (we did have quite a lot of stuff as we were stocking up for a weekend away). Each beep and intervention by one of the staff watching us, led to another "exchange of experience" between my wife and I.

The simple act of buying life's weekly essentials is being transformed into trial by technology. Rather than a pleasant experience involving warm and friendly humans, those of us who have yet to turn to internet grocery shopping feel like we are being encouraged to defect. Once we are all shopping from home, the high street will be finished. And we will be partly to blame. We allowed large stores to wean us away from smiley friendly people.

There is a lesson here for all businesses: When you seek cost reduction, make sure you are not reducing the value delivered by more than the cost saving. The customer remains the arbiter of value - and can easily vote with their business.

Smart businesses grow on a formula that is customer centric and that makes sure that the customer receives the value most appropriate for the price point and the service level.

Ask yourself:

• Who benefits from the proposed change? The firm; The customer; Both

And then ask:

• What will happen when the customer starts to question the value?