Finland's long road to a service economy

In a service society consumers need to learn to shop for services

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By Eeva Eronen
     
      The waitress brings a cup of coffee and a piece of cake to the table at the Café Ekberg on Bulevardi in Helsinki. The fact that the customer is able to go straight to the table and order the treat can be seen in the bill.
      The service raises the price by 10-15 percent, says proprietor Maj-Len Ekberg. Therefore, the service adds nearly one euro to the price of the coffee and cake.
      The customers at Ekberg, which adheres to a tradition dating back more than 150 years, do not mind, as most of them visit the café specifically for the service, which is better than in most places.
      When Ekberg stopped table service during the recession of the 1990s, customers pleaded for it to be restored, even if it meant higher prices.
      This was done as soon as an increase in sales made it possible, Maj-Len Ekberg says.
      Table service significantly increases costs. If Ekberg operated on a self-service basis, it could manage with at least two employees fewer than it has now. Personal service also slows down the turnover in customers, which can hurt sales during busy periods.
     
The population at large in Finland does not particularly care for such luxury. Finns are generally not very interested in paying for service. In Helsinki the cafés where coffee is brought to the table by a restaurant employee can be counted on the fingers of one hand.
      Naturally, not everyone can afford extra services, but increasing numbers of people could.
      Finns are burdened by history. In the postwar period there were no services, nor did people have the money to pay for them. Appreciation for doing things one's self and instinctive penny-pinching became imbedded in the subconscious of a prudent nation.
      Those who are more affluent do not like to show it. In addition, many find the idea of hiring a domestic servant to be awkward, even if cleaning help is bought from a company that seeks to make a profit.
      Good public services have made Finns used to the idea that it is not necessary to pay for everything. In addition, buying services has been, and still is, expensive.
      This lack of familiarity with services is apparent. Finns continue to be the ones who will jealously hold on to their suitcases while abroad, defending their luggage against a hotel porter offering to help carry them.
     
So Finns are, by nature, a self-service nation. Although there are some who buck the trend, most will clear their own tables at service station diners and cafés. Few will even ponder whether or not there was any discount for taking care of the cleaning.
      Even at Ekberg, some non-regulars will fetch their own coffee even though the sign by the store states unequivocally in three languages that the café has table service. The coffee pot, which attracts the self-service minded customers, is there for refills, Maj-Len Ekberg says.
      It is hard to believe that it is possible to measure one's own blood pressure at occupational health clinics, or that self-payment for groceries has been tried at ordinary food stores. Experts say that there will be grocery stores in Finland within five or ten years, with no staff.
      And more self-service is on the way, experts promise; new ideas are limited only by the imagination, says Helena Tuorila of the National Consumer Research Centre. The greatest opportunities and changes are the result of technical development.
     
What will happen when companies start gradually placing their own jobs onto our shoulders? Will the people benefit at all form serving themselves?
      The consumer's lot is a contradictory one. We are enticed to use self-service facilities with the incentive of lower prices, but the loss of personal contact is not reflected in every price tag.
      Also, in some cases, self-service is so convenient that the customer does not even expect a discount for using them. One self-service success story is electronic banking.
      Keijo Karhinen of the OP Bank Group says that fewer than ten percent of bill payments are handled by bank tellers. The reasons are obvious: self-service works, and banking can be dealt with at any time without queueing - during working hours, as many do.
      Electronic services are getting to be easily available, and the deciding factor is the ability to deal with technical matters, rather than personal wealth.
     
When customers serve themselves, they take on part of the productive input. Service providers make better profit, as the lower costs are unlikely to be completely deducted from the price - sometimes this does not take place at all.
      Self-service increases productivity especially in areas whose services are based on the transfer of information and large volumes. On the banking side, both conditions are borne out.
      Business ideas based on self-service are productive also in the sense that pruning costs makes it possible to profile the business as very cost-effective. And customers will go for what is inexpensive, even at the risk of having to spend three agonising hours assembling a TV stand out of parts produced by a Swedish multinational.
      Productivity is also increased by the ability of producers of services to concentrate on more complicated matters, when customers deal with basic services themselves. This can be seen especially clearly in banks, where customers will book appointments to discuss investment and savings plans.
     
According to experts, the popularity of service and self-service is a t a crossroads. Self-service has developed to a great extent, but at the same time, the old personal service is making a comeback.
      Those with enough disposable income also want completely new kinds of services: personal trainers, interior decorators, and life coaches. The popularity of the tax deductions available for domestic services indicates clearly that quite ordinary families are buying themselves more free time by outsourcing the drudgery of domestic work.
      The market is becoming more polarised: the far ends are emphasised with respect to both price and services, says Petri Rouvinen, head of research at the Research Institute of the Finnish Economy (ETLA).
      "We are getting back to a situation in which the consumer must make choices. In a service society, one has to learn to buy services", says Ari Vepsäläinen, professor of logistics at the Helsinki School of Economics.
     
In another part of the city, customers sitting beneath the old and stylish chandeliers are focusing on the same thing that customers were doing there 100 years ago.
      "Ekberg would not be the same place without table service", Maj-Len Ekberg says.
     
Helsingin Sanomat / First published in print 13.8.2006


Previously in HS International Edition:
  Tipping - is that a place in China? (26.7.2006)

EEVA ERONEN / Helsingin Sanomat
eeva.eronen@hs.fi