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As discount chains like K mart and Wal-Mart flourished in the retail industry, rivals were forced to cut their payrolls to stay competitive. In that environment, in which shoppers began to think of brand-name products as commodities, businesses that still offered knowledgeable sales help were taken for a ride by consumers and competitors. Shoppers quickly learned to visit a service-minded store for a free lesson about a particular product, then go down the street to a discount house to buy the item for 25% less. The headaches often come later, because discounters tend to offer very little follow-up service. Says Butch Weaver, a second-generation appliance repairman and president of a Maytag store in Gaithersburg, Md.: "A lot of this the ! public has done to themselves. If they're going to go for these cut-rate prices, something's got to give, so it's usually service."
Businessmen point out, of course, that self-service has spawned great conveniences, ranging from simpler telephone-connecting jacks to coin-operated car washes and even videocassette vending machines. Many storekeepers say that self-service often enables customers to meet their needs faster than would be possible if they relied on clerks. At Child World, a chain with 134 stores, the company last fall arranged toys in "learning centers," where customers can examine and play with the products. Says President Gilbert Wachsman: "The shoppers are out more quickly. It reduces our expenses, and we pass the saving on to the customers." Fayva, a discount shoe chain where consumers select their choices from the rack, has grown to 650 stores in 15 years.
A Kroger grocery store in Morrow, Ga., has taken the self-service concept to an extreme. Customers check out their own merchandise by scanning the price codes with electronic readers. Human clerks collect the payment, and computerized sensors monitor the flow of merchandise to check for any fraudulent item switching.
But while consumers will embrace self-service if they think they are getting a bargain, they usually demand attention if they believe it is included in the price tag. Shoppers generally put up with the scarcity of sales help in low-end stores but quickly grow impatient when the trouble arises at mid-price and prestige retailers. Says John D.C. Little, a professor at M.I.T.'s Sloan School of Management: "Stores will have problems if they pretend to be up-market but aren't." He chides pricey department stores like Bloomingdale's for sometimes providing less service than their upscale image leads customers to expect.
While inflation taught consumers to be more price conscious, it was deregulation that forced banks, airlines and other industries to streamline their services so they could survive the new competition. Many banks, locked in an expensive battle to offer the highest interest rates for savers, found they could no longer afford to provide cheap or free services to small-account holders. By raising service charges dramatically, some banks actively discourage small accounts, because the profits in serving them are slim or nonexistent. Most depositors must wait in line to see a banker, while big- account holders are whisked into private offices.