Are self-checkouts dooming impulse purchases?

Discussion
Photo: RetailWire
Jul 11, 2016
John Karolefski

Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.

Fifty percent of Millennials are using self-checkout every time they shop in grocery stores and that presents a challenge for impulse purchases.

“Self-checkout is the small-basket checkout method of choice,” said Ron Hughes, senior manager of shopper strategy and innovation for Coca-Cola. “It is a method of choice for a growing cohort, which is the Millennials. So it’s important that we start thinking about innovation in this space and understanding impulse merchandising at self-checkout.”

He spoke about these challenges in a presentation at the recent FMI Connect event in Chicago hosted by the Food Marketing Institute. Signage at the large Coca-Cola exhibit at the event showed beverages represent 45 percent of front-end checkout sales.

“Self-checkout is continuing to evolve,” Mr. Hughes said. “It’s entered into an era of efficiency and productivity. It’s provided an opportunity for shoppers to be in control. Shoppers want speed; they want control; they want to get out of the store as quickly as possible.”

But it is that behavior, he said, that creates the challenge of impulse merchandising. At self-checkout, shoppers are focused on checking out. They go from the shopping mode to the transaction mode.

“What makes for good merchandising practices at the front end? I would argue that we want to create an experience for the shoppers. We want to make it more engaging. We want to frame our categories so they pop and shoppers see them,” he said.

DISCUSSION QUESTIONS: Is the shopper mentality around self-checkout simply not conducive to impulse purchases? What solutions do you have to increase impulse purchases at self-checkout?

Braintrust
"Retailers really need to think about lifetime value rather than maximizing revenue on single transactions."
"I am doubtful that 50% are using self-checkout every time they shop."
"As a dedicated self-checkout shopper, I know I’m “ready to get out of here” when I hit that station."

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25 Comments on "Are self-checkouts dooming impulse purchases?"

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Peter Fader
BrainTrust

Maybe it’s true that self-checkout inhibits impulse purchases, but in the long run it could be a great way to create consumer “lock-in” that might be so much more valuable than an occasional candy bar. Retailers really need to think about lifetime value rather than maximizing revenue on single transactions.

Nikki Baird
BrainTrust

I thought about going there too. I’m glad you said it. Impulse selling is based on the idea that the longer you’re in a store, the more you buy, so why not wait in a line and be tempted by the candy bar? When the real value comes from making consumers’ lives easier (by getting them in and out of the store quicker), thus earning lifetime loyalty. Tough news for Coca-Cola and Mars, though.

Sterling Hawkins
BrainTrust

100%. The focus here should unquestionably be on providing the best consumer experience possible to maximize the customer lifetime value.

Nikki Baird
BrainTrust

I don’t think it’s as complicated as all that. I just think self-checkout pods aren’t designed to foster impulse purchases. The shopper mentality is no different if you’re standing in line waiting for a full-service lane vs. standing in line for SCO. The problem is the full service lane is designed to guide you in and embrace you in a two-sided assault on the impulse shopping front.

SCO pods themselves have little room for impulse items like racks of gum or mints, and most retailers don’t have any real line control leading into their SCO lanes. SCO gets used enough, at least around here, that there is almost always a short line — it’s those people standing around in the middle of the aisle holding baskets and looking pained because they know they’re blocking the way for everyone else, but there’s nowhere else to stand while they wait for a pod to open up.

Put the same kind of all-embracing path full of impulse items leading into an SCO checkout, and I have a feeling you’ll see the same kind of effect as in full-service lanes.

Shep Hyken
BrainTrust

There may be limited opportunity (but still some opportunity) for impulse purchases at checkout. All that means is that the retailers have to find other areas within the store to stimulate the impulse purchase.

Ben Ball
BrainTrust

As a dedicated self-checkout shopper, I know I’m “ready to get out of here” when I hit that station. But that doesn’t mean I’m not susceptible to picking up something that appeals to me on the way there or even at the last minute. It seems the key is to offer me attractive opportunities that don’t inhibit or aggravate me when I am on a mission to get back to whatever it is I was doing.

Bill Hanifin
BrainTrust

I do think shoppers adopt a different mindset depending on how they check out.

When checking out with a cashier in a traditional manner, the shopper thinks “they do for me.” Absent interest in validating how items are rung up or discounts taken correctly, shoppers have time to let their minds wander and impulse purchases are more likely to occur.

Shoppers choosing to use self-checkout have an underlying motivation. It is probably related to speed, convenience and some degree of personalizing their experience. In this case, they are thinking “I do for me” (ignore the poor grammar, as I illustrate this in raw thought). In this, the shopper is more “heads-down” and consumed with the task of checkout.

To create any sort of enhanced experience with self-checkout, a retailer would have to create a winding queue (think finisher’s chute if you are a runner) where the shopper passes by several displays on their way to the machines.

The way most self-checkouts are configured, shoppers are thinking just about completing the job and getting out of the store, not adding anything else to the cart.

Steve Montgomery
BrainTrust

Is the issue the inherent physical plant issues that come with self-checkout, i.e., the lack of display space, etc. or the fact that Millennials are buying so few items that that is their method of choice? The first involves every self-checkout customer. The supermarkets knowingly traded lower labor costs for potential lost impulse sales.

The other may solve itself. Millennials are likely in the self-checkout lane because they are buying just a few items (at least those of us behind them hope that is the case). Is that because they shop more often or the fact that so many of them are living at home and dependent on someone else to load the pantry? If the latter, then as they move out and start their own families they move from the self-checkout lanes to the regular ones. Issue solved.

Michael Day
BrainTrust

Agree with Shep: Retailers need to focus on “finding other areas within the store to stimulate the impulse purchase … ”

(AIM) “Aggressive Item Merchandising” for featured end-caps (and prime impulse shopping paths in-store) remains both an art and now a data-driven science for merchandisers and store operators, etc. Enabled now by data-driven personalization and in-store location-based technology, executing an AIM sensibility (targeting those same Millennials using self-checkout every time they shop) can make-up for lost sales of magazines, candy bars and lollipops at front-end check-out.

Ron Margulis
BrainTrust

About 10 years ago I forecast that by now about half all non-pharma transactions at supermarkets and mass-market would be via self-checkout. My thinking was based on a corollary to banks and the use of tellers vs. ATMs, which after 25+ years represent more than two-thirds of all transactions. Missed that one by a mile. In looking back at the reasons why self-checkout hasn’t gained the same traction as ATMs, the lack of opportunities for impulse buys is the top one. There isn’t as much space available for impulse product merchandising in self-checkout lanes physically and the mindset of the self-checkout customer is in-and-out with the fewest distractions.

Not sure what will work to increase impulse purchases at self-checkout, but I’ll tell you what doesn’t – post shopping promotions. The Catalina machines at self-check almost always have several printed coupons sitting there from previous users. It may work in the staffed checkouts, and I have serious questions about this, but it’s simply not a great delivery mechanism for self-checkout.

Bob Amster
BrainTrust

The consumer that wants to use self-checkout has already selected what s/he wanted to buy. There may be some low-cost items that these consumers would purchase at the checkout if those items could be presented in such an environment that facilitates flow and doesn’t take large amounts of space. And I agree with colleagues below that the concept of an appealing customer experience (long-term customer retention) is just as important as incremental sales from impulse items at the checkout. The self-checkout customer is not your impulse item purchaser.

Dr. Stephen Needel
BrainTrust

I’m skeptical that 50 percent of Millennials are using self-checkout — or at least they aren’t always using it — so that number might be inflated a bit. That said, it’s a question of design of the front-end. My Walmart has everything that a regular aisle has in the SCO area, but it looks like it was placed there as an afterthought, not as part of the design. Fix that and you may fix a lot of the impulse issue (at least test what fixing the design does).

Gene Detroyer
BrainTrust

Impulse items at the check out have always been about the retailer. Self-checkout is all about the customer (meaning their speed and convenience). While there will be some opportunities, as long as there are no waiting lines, impulse purchases will decline.

The worse thing the retailer could do is inhibit the speed and convenience of self-checkout to sell a few more candy bars. (But, I am confident that some will try.)

Ian Percy
BrainTrust

I don’t think I’ve ever purchased an “impulse item” at a checkout so that either makes me the wrong one to ask … or the perfect one to ask.

First of all, let’s admit that most impulse stuff at checkout is crap. Second, and maybe this is just my ineptness, SCOs still take a lot of concentration. Some items have multiple bar codes (won’t mention names but initials are HD), some don’t fit in the adjacent bag, the process differs from store to store, do you chip or don’t chip and so on. And you want me to buy breath mints or the latest Kardashian news?

Shep has it right, impulse triggers have nothing to do with checking out … which is why it’s called “checking out.” I also wonder why the irresistible “As Seen on TV” impulse isn’t used more often. I keep thinking about buying that spray sealer stuff even though I don’t really need it and have no idea where to find it at “HD.” If that was stuck out somewhere I’d yield to the impulse. There’s some wipes that make my car brand new too.

Anne Howe
BrainTrust

What if the grocery retailers let the shoppers have input to help curate a set of products they might find useful to be at checkout, in regular lines as well as self-checkout lanes?

What an interesting experiment in keeping shoppers tuned in to what might really help them. It would be great insight to see what various segments of shoppers might select.

I find most checkout lanes a bore. Same assortment that blends into a visual that your brain can completely ignore. The time is right for change.

Ken Morris
BrainTrust

I believe there is a fundamental shift in grocery checkout for Millennials. As self-checkout apps become ubiquitous, Millennials have quickly shifted to them and have changed the front-end pop-and-shop mentality of impulse purchase at POS. What if POS is not POS anymore? Then you clearly have to change the impulse purchase game. Offering these impulse purchase items electronically in real-time tailored to the individual without creeping them out is a technique to grab their attention. Being able to create context-based offers around the individual, time of day, weather and the in-flight market basket can be a game changer. This appears to be another example where retailers have thought through the technology without a clear understanding of the impact on the other two legs of the stool that make for successful technology solutions, the people and the process.

Tom Dougherty
BrainTrust
Self-checkout has changed the game in every facet of retail. Certainly it is driven by a presumption of speed. But the reality is that it is faster to be checked out by an employee. It takes longer to scan every item yourself. It’s a fact. So while time savings is the knee-jerk excuse for the popularity of self-checkout lanes by Millennials, the underlying drive is more visceral. It is driven by a desire for more personal control and a sense of anonymity. They prefer to not have personal contact. Watch the activity at checkout. You will see shoppers bypass an empty traditional checkout line and patiently wait in line for a self-checkout lane to become available. If speed was all that matters, why do Millennials ignore the automated shopping experience where the stores prepare your order in advance and you simply drive up and pick it up? The issue is not a loss of impulse buying. That still happens. The issue is brand loyalty and personal identification with the retailer. The brands don’t really compete with one another and preference is a value based upon location. I can’t think of any chain beyond Wegmans or Whole Foods that has become… Read more »
Kenneth Leung
BrainTrust

I think you can still foster impulse purchases but retailers need to redesign the self-checkout experience from queuing to displays at self-checkout. Right now self-checkouts are designed as if the shopper is doing the cashier’s job from an ergonomic perspective and the waiting area is not defined. I would love to see a rethink of self-checkout checkstand manufacturers to design something specific with shoppers in mind rather than the current design of flipping the cashier user interface around for the shopper.

Christopher P. Ramey
BrainTrust

Self-checkout will evolve to include impulse purchases. That’s the easy challenge.

The issue is customer experience. We talk like customer experience matters, but then ignore it when it doesn’t fit our sales paradigm.

Time is money. Checkout clerks should be lubricating the process. Instead, they slow it down. Reinvent the entire process to make purchasing products seamless and faster.

Joan Treistman
BrainTrust

Self-checkout requires focus on the job at hand. You can’t really gaze around while you’re scanning items. That focus is not conducive to the open mindedness of impulse purchases. You could increase the wait time for self-checkout stations … just kidding.

Are there so many lost opportunities that impulse purchases at self-checkout must be a target? It seems to me that offering convenient and well operating self-checkout is an important goal to influence greater loyalty. To enhance impulse purchases in general, focus on where they are most likely to occur.

Ed Rosenbaum
BrainTrust

I am doubtful that 50% are using self-checkout every time they shop. Even if that is the case, there can still be areas for more impulse buying, as others have said. I have rarely had the urge to buy anything in the regular checkout line, other than the groceries in the basket. My “impulses” come as I walk through the store, usually in the sweets and soda areas.

Ralph Jacobson
BrainTrust

I think some folks are using self-checkout as an excuse for why their impulse merchandising is failing. Checking out is the focus of all shoppers at the POS, whether it’s self-checkout or not. Yet, innovative retailers have partnered with their CPG suppliers to create compelling merchandising for all types of POS. If you provide promotions that are attractive to your audience, millennials or otherwise, you will see a marked improvement of turns for product merchandised at the POS, including at the self-checkout lanes.

Craig Sundstrom
Guest

There is no functional difference between clerked and self-checking with regard to what people can be exposed to; if the only real difference is that self-check is faster, and so people don’t have as long a period of exposure, then I guess that’s just too bad for impulse purchases. A store’s goal should be to provide people with what they want, and if it’s a choice between fast service and padding the bottom line selling gum, candies or what-not, there really shouldn’t be much to think about.

William Hogben
BrainTrust

Retailers don’t need to worry about merchandising self checkout kiosks for long — the next generation of self checkout systems are apps that let shoppers scan as they shop. This moves the checkout process into the aisles and distributes impulse purchases throughout the store — in fact all of these systems boast 10-15% basket lift. Merchants with kiosks should look at self scanning to replace the hardware, store space and boost sales.

Michael Mauerer
Guest

In regards to the question “What solutions of you have to increase impulse purchases at self-checkout?” I’m seeing retailers lean towards suggested items based on what the consumer has scanned. Let’s say the consumer is at a Banana Republic purchasing a pair of women’s dark wash skinny jeans — some suggested items would be a stripped tank, a jacket, some flats or sandals, etc. A message would pop-up such as “this shirt goes great with the ABC dark wash jeans” with an “add to cart” option, in which they are prompted to pick out the size and color of the item they want to add. A store associate would then get a notification to bring the item up to the customer at self-checkout station. Granted, this slows down the process, which is the one of the main purposes of self-checkout, but can increase impulse buys.

Another solution being the size of the POS hardware. It takes up too much space to have a rack full of small impulse items you’d find at the regular checkout line. Get an iPad POS system!

wpDiscuz
Braintrust
"Retailers really need to think about lifetime value rather than maximizing revenue on single transactions."
"I am doubtful that 50% are using self-checkout every time they shop."
"As a dedicated self-checkout shopper, I know I’m “ready to get out of here” when I hit that station."

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