Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.
The front end of supermarkets has traditionally been a showcase for immediate consumption snacks and cold beverages that tempt shoppers while a cashier scans their groceries. But fewer products — if any — are merchandised in self-checkout lanes, which now account for about 40 percent of transactions in grocery stores. And shoppers are too busy scanning to pay attention to products on display.
"It's a huge loss," said Frank Jimenez, senior director of insights driven performance at The Hershey Company in a recent presentation at the Food Marketing Institute's annual conference in Chicago. "We've done a number of studies. It's billions of dollars since self-checkout started in 1992."
While self-checkout reduces labor costs and benefits time-pressed shoppers with faster checkout, too many retailers have not considered the loss of impulse sales. As a result, shelf-checkout lanes have turned into "an operational solution and a merchandising challenge," he said. Front-end products account for about one percent of total store sales and four percent of gross profits.
Hershey is conducting tests with retailers to merchandise products in self-checkout lines. But Mr. Jimenez noted in his presentation that supermarket retailers like Kroger are testing high-speed scanners that are about three times faster than traditional scanners. Also underway around the country are tests of shoppers scanning products with their mobile phones and other devices while they shop, thus reducing time at the front end. In-store pickup of online orders also should present challenges to impulse-purchase opportunities.
"A lot of times new technology comes along and somebody makes a decision to put it in," he said. "It could be mobile, or a lot of different things. But they don't think through the whole opportunity and determine the impact. So the merchandising side has to come back and chase this thing."
How likely is it that retailers will eventually find a way replace impulse sales lost due to self-checkouts?