After checking, bagging, paying for, and taking my own groceries to the car at the new automated check-out station at my local grocery store, it occurred to me that this "service" not only put people out of jobs, I did all the work and it didn't save me any money.

There was no discount that was passed on to me for learning how to scan and bag my groceries and I didn't get a tip for taking my own groceries to the car. I spent more time, and invested more of my own labor, and only the grocery store benefited. It was a novel experience, but like any other red-blooded American, I feel that if I'm going to be complicit in putting people out of work, I want to save some money doing it.

I'll bet my grocery store tells its investors that these new automated check-out stations will save millions....as soon as they start to pay for themselves. Publicly-held companies love to cut human staff when they can't think of any other ways to save or make money. But those cost-savings aren't necessarily passed along to the consumer, because they have to provide investor value. Plus, the companies have the adoption curve to get through while they pay off their automated investment costs. So for a period of time, automation actually costs everyone more time and money.

To illustrate my point, while I scanned and bagged my groceries, the system would occasionally warn that unscanned groceries (i.e. stolen groceries) were making their way into my bags. While I floundered trying to fix this error, a human customer service representative came over and pushed some buttons and made the offending warning go away. I was allowed to continue checking out while he stood and watched to make sure the machine didn't act up again.

He assured me that this system would save me money, but I couldn't find any savings on my customer receipt. Where is the minus line for self-service, like the minus lines discounts for shopping in bulk, using coupons, or preferred membership?

So the savings are there, but I don't get to quantify them. Why? The grocery store is changing its business model, and doesn't want me to know it yet. If there were a button for a self-service discount, then the customer would be rewarded for what the grocery store fully intends to get everyone to do eventually - everything but stock the shelves.

Automated technology, until it pays for itself, is an added expense. It's designed to save the grocery store money - not the consumer. It takes the place of personnel, but the grocery store must maintain personnel while the technology is purchased, installed, and monitored until the system works as well as...humans.

Eventually, the bugs will work out, just as they did for self-service gas pumps and ATM machines, which we all view now as great conveniences, especially if you need gas or cash at 3:00 in the morning. But automation, once it has begun, only escalates. To compete at the profit level, that level when automated tools are paid for, all grocery stores will eventually have to install automated check-out stations whether they want to or not. And the consumer will lose another round in the price wars because those savings experienced by the grocery stores aren't being passed back down to the consumer. They are being passed to the investors in stock values, who will demand greater returns once those profits are gained. And the consumer will continue to lose service while being told that the new systems keep operating costs down and therefore their grocery bills down - savings they will never be able to personally quantify.

My daughter, on the other hand, thought the new automated check-out was very cool. She not only didn't mind doing her own labor, she enjoyed the autonomy of the whole experience.

In that moment, I had a cognition about the current commission crisis in the real estate industry that I had never quite understood before. Consumers are demanding to pay lower commissions at the same time that the real estate industry is automating listings for them. The consumers are doing their own scanning and bagging, if you will, and they want to be rewarded for it.

The real estate industry has bent over backwards to provide consumer-friendly access to listing information. Not only have MLSs and brokers and agents adapted technologies to collect, post and advertise listing data on the Internet, the industry has also made the advertising of listings by competitors possible through Internet Data Display (broker listings shared for advertising purposes by competitors) and virtual office Websites.

But consumers weren't grateful enough for these innovations to pay more for the services, in fact they have repaid the brokers by demanding lower commissions. Consumers have no idea what the costs are to the industry to make it convenient for consumers to be autonomous and anonymous; all they know is if they did any work, even just for scrolling through listings online, they want to be paid and the way to get paid is to ask the broker or agent to take a lower commission.

If consumers are going to do their own home-shopping online, they expect to save some money, just as they would for using the self-service lane. That's why they are susceptible to online discount brokers and the new affinity companies that are promoting lower commissions if only the consumers will use their agents. These business models promote the idea to consumers that they ought to be paying less money in commissions.

Meanwhile the real estate industry is being squeezed by providing the services that consumers say they want and responding to demands that they lower their commissions after they have provided it.

Maybe it's time to turn the tables. Charge consumers for access to automated listings.

Tell consumers the true cost of online listings. Tell them that making an entire MLS available to the consumer for the click of a button costs money in techies, Websites, software, advertising and other fees. Tell them that commissions are not going lower - they are going higher because marketing costs have doubled; the brokerage has to maintain its newspaper advertising to please sellers while advertising listings on the Internet to please buyers. Tell them that your online affinity partner can get them a special discount but only off an eight or ten percent commission.

The good news according to the National Association of Realtors is that more online homebuyers are using the services of Realtors than offline homebuyers, proving that marketing on the Internet does work. So you have more of them, you also have more of them demanding lower fees.

A wise man once told me that what consumers want, they get sooner or later. What they seem to want from the real estate industry is service for little profit. Service providers anxious to meet this need will continue to find ways to automate real estate services, and then there won't be any brokers or agents left to object.

Don't let them. Oppose the trends. Charge more, not less for your services. If you want to discount or pay referral fees, you'll have the room to do so and still make enough money not to be replaced by an automated valuation model, transaction manager, or check-out machine.

Published: August 1, 2003

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.