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[23 comments]

Walmart Adding DIY Checkouts

March 8, 2012

In a recent RetailWire blog on Forbes.com concerning Walmart's decision to reassign greeters to other duties, one reader opined (sarcastically, I'm guessing), "How about putting cashiers in the register area? That would be cool."

Well, it's not exactly news that there are consumers who find fault with Walmart's system of ringing up all those everyday and rolled-back bargains in its stores. Now, comes an answer — do it yourself.

Walmart, according to a Reuters report, is expanding the numbers of self-checkouts in its stores in an effort to cut costs and, ultimately, offer even lower prices to consumers in their pursuit of better living.

Charles Holley, Walmart's chief financial officer, said that Walmart currently has self-checkouts in 1,600 of its 3,800 stores in the U.S. About 80 Sam's Club warehouses also have self-checkouts. The company plans to add 220 self-checkouts at Sam's this year as well as an unspecified number at stores under the Walmart banner.

According to Mr. Holley, Walmart spends about $12 million in wages for cashiers for every second of transaction time. The company has said that addition of self-checkouts will not reduce the number of cashiers it employs.

FINANCIALS:     [NYSE:WMT]

Discussion Questions:

Discussion Questions: Aside from cost savings, will self-checkouts improve the checkout experience for shoppers at Walmart? Are there other steps Walmart could take to improve its front-end without having to throw lots of money at the problem?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How much better or worse is the checkout experience at Walmart compared to the retail industry in general?

Comments:

Walmart would definitely benefit. All stores benefit when the exit experience is improved. Since Walmart generally doesn't attract the most approachable employees, self checkouts will most likely be a better alternative. Walmart generally has 4 to 8 self checkouts per store. Adding another 4 to 8 would help. Obviously they will continue not to have self checkouts in high crime areas.

David Livingston, Principal, DJL Research

Definitely will improve the checkout experience -- it provides a choice to the shopper. Use it or don't use it -- it's up to the shopper.

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Dr. Stephen Needel, Managing Partner, Advanced Simulations

My short answer is yes, adding self-checkouts will improve the payment process at my local Sam's. I would be thrilled to be able to use self-checkout for my five to six items rather than wait behind lines of people who have filled those large carts to the brim. Better for me and better for them.

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Steve Montgomery, President, b2b Solutions, LLC

Self-checkouts at Walmart will be successful in direct proportion to their desirability to their customers as well as the skill, speed and integrity of the users. My crystal ball indicates that the jury is still out on whether that will improve the checkout experience for Walmart shoppers.

From observation, I'm inclined to believe that the front-end process at Walmart could improve if shoppers could be trained to better organize their purchases, their shopping accouterments, and accompaniments for the checkout process.

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Gene Hoffman, President/CEO, Corporate Strategies International

If we're honest about it, there is no checkout experience at Walmart, so yes, self-checkout could be an improvement. Even better would be in-the-aisle scanning to avoid lineups altogether but neither Rome nor even Walmart were built in a day.

Doug Stephens, President, Retail Prophet

Many consumers actually prefer self checkout. Not only should Walmart expand the number they offer, but retailers such as Target should add them as well. Consumers don't like to be kept waiting in check aisles when they purchased just a few items that can easily be scanned, bagged, and paid for in just a couple of minutes. Good move by Walmart.

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David Biernbaum, Senior Marketing and Business Development Consultant, David Biernbaum Associates LLC

Creating these self-checkouts will not only help cut costs, but will also create new marketing opportunities.

Self-serve checkouts cater to certain segments of shoppers. Men are 60% more likely to use self-checkout than women. Younger people are more likely to use it as well. This will give Walmart and its vendors the opportunity to market to these shoppers in very particular ways.

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Liz Crawford, VP, Strategy & Insights, Match Drive

Avoiding long lines of people waiting to check out is a good goal. Using self checkout to make a dent in the problem is a good alternative to try. However, self checkout does not always go smoothly, so Walmart will need someone there to help. If there are several people with problems, then the line at the self checkout could also get long. I hope Walmart execs talked with people from the companies installing their self checkout equipment to discover problems so they could be avoided.

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Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

Walmart must think that it has identified a self-checkout system that actually works. If they have, I hope they'll share it with the host of other retail companies that struggle with balky units.

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Cathy Hotka, Principal, Cathy Hotka & Associates

When available, I generally prefer self-checkout. So, for me, that improves my experience. The key to making it work, however, is to have a human close by for whenever the technology doesn't want to play nice.

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Ted Hurlbut, Principal, Hurlbut & Associates

I want to do my shopping and GET OUT! DIY allows me to skip the chit-chat, credit pitches, warranty add-ons ... and GET OUT! If you choose to go through the line, it's because you are intimidated by DIY or you enjoy the interaction with the associate. Get associates who smile and thank you for your money; it's free.

Anne O'Neill, supervisor, retail

The front end is all about effective labor scheduling and having an efficient process. I think Walmart has the latter, but cuts cost on the former. Adding self checkouts will help if they don't scale back the number of cashiers, as it increases flow thru. Based on my "time studies," it takes longer to self checkout so I'm not sure if that improves the customer experience.

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Robert DiPietro, GVP Product Strategy & Business Development, Affinion Group

Walmart can only improve their checkout experience by adding more DIY lanes. Currently, the checkout experience reminds me of a cashier whose only concern is "when do I get off?" Let me also add that in my opinion, Target is not better and possibly a degree below.

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

It would be one thing if Walmart had attractive people with compelling personalities staffing their checkouts. But they don't. They really can't with their business model. This isn't Wegmans. Self checkouts, except in the difficult areas, are the answer.

David Livingston, Principal, DJL Research

I don't remember my own "checkout experiences" there being anything remarkable -- either good or bad -- but maybe 2 purchases in 20 years is too small a sample size. No matter. In answer to the question: yes, why wouldn't it? (Though the premise of cost savings > lower prices seems a stretch.) I think it's actually more the issue of will it improve it from WM's perspective? The "high crime" element of interest here is basically shoplifting, and I would imagine that's more widely distributed than people realize.

'notcom'

Absolutely not! Walmart should focus its efforts on reinvesting in their people first. By providing better service along with "better" prices, they'll create a better overall value and experience for their customer. I also find it hard to believe they won't decrease staffing at the registers, as a result of installing additional DIY POS terminals.

'dformanek1'

Two problems. The volume of items in the Walmart shopping basket makes it an awful lot of work to bag myself. It's not like I shop at Walmart to scan a couple of items and go. I do that at Fresh & Easy. The other problem is the increasing adoption and legislation of reusable bags. With localities getting greener and some levying fees on plastic bags, Walmart is poorly suited to deal with this. Go to Trader Joe's and they will bag your purchases beautifully.

Self checkouts don't afford the customer the time and space to both scan and bag their purchases when dealing with a large volume. I assume the smaller locations with smaller shopping carts will benefit, but the Supercenters and warehouse stores might want to train their cashiers how to be a bit more efficient.

'jlmcnamara'

We have done extensive research on the self checkout at retail stores. There is clearly a segment of shoppers who prefer them for both the experience and the convenience.

The most consistent finding is that shoppers prefer retailers where they have the choice to use the self checkout if and when they want.

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Raymond D. Jones, Managing Director, Dechert-Hampe & Co.

In my opinion, self checkout works best for customers who simply want to get it and go. For those items that are bulky and large, self checkout has taken a beating. Just look at Costco. They pretty much have to man the self checkouts because there are so many problems. With this said, and looking at the bulk and size of the typical buggy at Walmart and especially Sams, I think they are barking up the wrong tree!

Lee Kent, Let's meet share and succeed in Retail, YourRetailAuthority

Self-checkouts are simply one step on the road to NO checkouts. That is, having the "checkout" continuously occur as the shopper makes their way through the store, selecting and paying for the merchandise as they go. Doing this with a retailer's proprietary device already enjoys some success (Modiv Shopper,) and moving further to the shopper's own smart phone is only a matter of time. At that point, non-self-checkout migrates to the equivalent of a trip to the customer service desk. "Patience ... and shuffle the cards!" - Cervantes.

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Herb Sorensen, Ph.D., Scientific Advisor TNS Global Retail & Shopper, Shopper Scientist LLC

This is a way to offer a choice and to give the shopper the experience they want at a point in time. Self-checkout, buy online/return in-store, mobile -- all vehicles to enable the consumer to have the experience they want.

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Larry Negrich, Vice President, Marketing, nGage Labs

We tried this in Florida; there was so much theft associated with the self-checkouts they were removed. When the store changed locations self checkouts were not included in the new layout.

Todd Miller, Zone Merchandise Supervisor, WalMart

Funny. Walmart had an older (non super) store in my area and put its first generation of self checkout in there (using some software other than the current NCR). They relocated the store and the new store did not include self checkouts.

They just opened another new store in my area about a week ago and this one again does not have self checkouts. There is a very high volume (well, was very high volume) Smiths across the road from this new Walmart that has 8 self checkouts; it opened with 4 about 10 years ago and they added in 4 more in a recent remodel, so they seem to be able to make self checkout work in that neighborhood.

I have not had good experiences using self checkouts at Walmart when I do find a location that has them. Usually there seem to be a lot of problems, machines are always broken, etc. There is too much merchandise cluttered around the self checkouts making it difficult for the employee to have a clear view of all of the machines at a given time. They do not seem to employ handheld technology for their self checkout employee like Kroger; the employee either needs to physically walk to your register or go up to the pay station to address any issues. I have much better self checkout experiences with the grocers and even the home improvement chains.

'storewanderer'

I don't see Walmart actually going into the realm of self checkout again. Walmart spent the bulk of the 2000s installing, modifying, and then ultimately removing all of the self checkout machines in their stores.

'SchuminWeb'

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