Self-Checkout Benefits Retailers and Consumers

Discussion
Mar 07, 2006

By George Anderson


Consumers who use self-checkouts like it because of their perception that they are moving through the checkout faster than going through a lane manned by a cashier.


Retailers like self-checkouts because a growing number of consumers like them and also because they can save labor costs and, as it turns out, losses due to shrink.


Helen Wilde, NCR’s self-service solution specialist in the U.K., told the Retail Bulletin, “There was a lot of nervousness when it (self-checkout) was first launched – people thought we were mad and that it’d be so easy to steal. In fact 67 percent of retailers said the switch to self-service had absolutely no effect and the rest said it actually improved shrinkage because it cut out cashier error – thieves tend to operate away from the till area anyway where there’s fewer people.”


Self-checkouts are gaining in popularity in the U.K. following a similar pattern to what has taken place in the U.S. Grocery stores were first to rollout the checkouts and other formats have begun to follow.


Tesco, Asda and Marks & Spencer are all making significant investments in the technology. Tesco, for example, operates a store in London that has 60 percent of its checkouts as self-serve.  


Moderator’s Comment: How can retailers use self-checkout to create a point of difference and a competitive advantage over others using or not using the
technology?

George Anderson – Moderator

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20 Comments on "Self-Checkout Benefits Retailers and Consumers"

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Kai Clarke
BrainTrust

The change to more self-checkouts (which is good) is all about managing expectations of customers. This combined with basic staff available to solve problems and help educate (during use) will make self-checkouts a standard instead of the exception. Most customers are attracted to self-checkouts because of the shorter lines and the ability to control their own checkout. However, there is an inherent fear of not being able to properly use these devices which keeps the majority of folks using a staffed-checkout. This will go away as stores place more self-checkouts and gently prod folks to use them. Having excellent staff available to train and solve issues is the biggest key to success in this implementation.

Race Cowgill
Guest
Race Cowgill
11 years 5 months ago
If a new process saves money, should the organization use it? Is customer resistance to a new process or technology resistance because it is new? If a new process seems obviously to be a good idea that has many benefits for all, is it really a good idea? If we personally see a technology or process as positive (or negative), is it positive (or negative) for others or most others? How do we answer these questions? Data. Reliable, accurate data, in my view. This is the only salvation from the common and costly error of thinking that our own positive or negative opinions about an idea mean it is actually positive or negative. Data: – 43% of consumers who have never used self-checkout think it is a good idea and would use it if it were available. (Note that this is less than half.) – 74% of consumers who have used self-checkout say it is not a good idea and say they would rather not use it. – Of those who would rather not use self-checkout, their TOP reasons for not liking it are: it passes store expenses (paying a cashier) onto the shopper, it takes longer, it is a… Read more »
Ben Ball
BrainTrust

The retailer who puts some “service back into self-service” can differentiate and delight their customers while maximizing the labor savings as well. These machines (and perhaps more importantly the consumers using them) aren’t perfect. And there are lot’s of little nuances that can impede smooth use. For example: the purchase of alcohol requires an attendant to intervene and certify proof of age. The retailer who makes sure the self-serve area has enough knowledgeable attendants to keep the transactions flowing smoothly will ultimately switch an even greater number of consumers to self-scan. Result? More labor savings as fewer full-service checkouts are needed.

jack flanagan
Guest
jack flanagan
11 years 5 months ago

Several years ago I was involved in implementing Self-Checkout chain wide.

It ‘works’ when:

1) It’s a real choice for the customer on any given shopping trip, rather than becoming the default solution because there is an insufficient number of staffed checkouts available.

2) the store team is brought ‘on board’ well before the actual implementation so they (the store team) understand where/how the ‘savings’ is being redeployed.

3) Signage and readily-available, friendly assistance make it ultra-easy for a first time user to give it a try.

4) The self-checkouts are managed as an integral part of the entire front end (e.g. express lanes, regular staffed lanes, customer service counter AND self-checkouts) rather than run as an independent entity.

5) Measure, measure, measure.

With regard to the presumed ‘labor savings,’ in our situation we neither planned for nor saw one. Instead, the available labor dollars were consciously redeployed to other areas (a promise we made to the store team) so as to improve the overall store experience and improve the top line (w/ resultant enhancement of the bottom line).

Matt Werhner
Guest
Matt Werhner
11 years 5 months ago

I can appreciate the way Tesco is listening to their customers and reacting to their wants. Retailers using self-checkouts can gain a competitive advantage over other retailers using the same technology by simply dedicating an additional resource(s) to coach or help customers through the self-checkout process. One required attendant for every four tills may be sufficient for some industries but not others. Retailers will gain additional customer loyalty by making customers feel comfortable with the process. I know in a sense this is defeating the purpose, but over time the average self-service scanning time will decrease significantly along with the need to have additional resources dedicated.

I don’t necessarily agree with the notion that customers “feel they are moving through the payment process faster even if they are not.” Let’s give people a little more credit here. If the average scanning time per item is three seconds and the average self-service scanning time is eleven seconds, customers are going to notice the difference.

David Livingston
Guest
11 years 5 months ago

Many of my clients have considered installing self-checkouts. I advised many clients not to do so because they have such excellent cashiers and customer service. The cashiers were friendly, attractive, and much faster than self-checkouts. Encountering a friendly cashier was part of the shopping experience.

For large sterile retailers, there is no doubt that self-checkouts will be better received by customers. How often must we encounter some inept, hideous looking, slow cashier, chewing gum? If this is the best certain retailers can hire, then of course offer self-checkouts.

More often than not, self-checkouts are used by retailers who have labor issues or are too wrapped up in the dollars and cents. Either their labor is too expensive to too inept.

David Zahn
Guest

I would like to see the retailer that has the “smarts” to offer a discount to the shoppers who use it – after all, if the shopper is saving the retailer labor costs, why not share it with the shopper? That would serve to further increase the use and thereby further reduce the labor needed at the front end.

Some airlines have gone as far as charging a fee to interact with a “live” ticket counter personnel (which boggles my mind…we are going to charge you to make a purchase from us or to receive a ticket to sit on our planes!)…but in the spirit of rewarding the shopper or consumer who “costs less to service” – why not have a percentage discount (sliding scale even…more you spend and self scan, the deeper the percentage discount?) for self scanners?

Art Williams
Guest
Art Williams
11 years 5 months ago

Unfortunately the biggest advantage to using the self-scan at one of our favorite supermarkets is that it is faster. The reason I say that is this store has the slowest checkers of any store I have ever been to. They have a lot of variety and very good prices with their biggest weakness being it takes forever to checkout. The few self-scan lanes are always jammed for that reason. So you either have to wait for a self-scan lane or suffer through the slow regular checkout lane. Price alone isn’t enough reason to go here but they have some items that we can’t find elsewhere.

Andrew Casey
Guest
Andrew Casey
11 years 5 months ago

From a consumer’s view, self checkout is fine provided it works as it should. Scanners that require 2 or more passes, items that aren’t bar coded, empty change dispensers and that ever present “please remove the item from the bagging area – help is on the way” message for no apparent reason all contribute to an unpleasant experience. When it works as it is supposed to, self checkout is a better experience than a sixteen year old cashier trying to discuss her boyfriend with another employee as she scans your items.

Kate Blake
Guest
Kate Blake
11 years 5 months ago

I briefly worked for a big-box retailer that had self-scan units and recall watching a family stuffing goods into a Capri Sun box at the back of the store to take thru the self-scan checkout in front. We also had people scanning 1/3 of their stuff and stuffing the remainder into bags, hoping they wouldn’t get caught, and, when they were, blaming it on the scanner. When you take into account the fact that, for every thief caught, at least two got away (so they say), I believe that the savings touted aren’t really there when closely investigated.

David Zahn
Guest

Bill Bishop’s point is well taken. Front end self scanning is a different transaction than the mobile self scanning being employed at some progressive retailers. Rather than separating the shopping trip into “pick” and “pay and pack” functions, it creates an integrated and more time saving approach to shopping. Being able to avoid the front end pay stations entirely would be a benefit for most shoppers and especially the larger shopping cart shoppers and therefore would be seen positively by most shoppers.

Dr. Stephen Needel
BrainTrust

The roll-out of self-checkout stations sounds like a replay of the 1970s when scanners themselves were being introduced. Lots of possible benefits which later turned into a necessary cost of business. Like the 1970s, the competitive benefits of early adoption will be tangible but short-lived as [almost] everyone installs self-checkouts. It would be interesting to see if there are differences in usage by age, socio-economic status, etc., whereby a retailer could maximize placement.

Mark Lilien
Guest
11 years 5 months ago

For most retailers, self checkout, if offered alongside the optimal number of staff cashiers, would be a customer-perceived plus. Customers like to choose. If the lines are excessive for the staffed cashiers, after self checkout is installed, the customer anger level will not be cured. The customer’s goal is to save time.

Michael Richmond, Ph.D.
Guest
Michael Richmond, Ph.D.
11 years 5 months ago

The real answer to the poll is – All of the above. It works for many time-starved consumers and it works for the stores from a labor and shrink standpoint. The obvious answer to where we go from here is RFID. We RFID all the packages and the consumers can either have a reader on their cart or better – have a reader at the checkout that you pass through as you leave the store. No more waiting in lines, and the stores save on labor! Now that is a point of differentiation.

Dean Cruse
Guest
Dean Cruse
11 years 5 months ago

No question in my mind that self checkout is a differentiator for retailers. These systems make the process more convenient and enriching for the consumer, and that’s what matters. It’s sort of like pay-at-the-pump for fuel – how many people will drive past a convenience store that doesn’t have it in order to find one that does? I know that even if I’m running on fumes, I will go out of my way to avoid stations that don’t offer it.

I believe the same will become true for self-checkout. In my town, Home Depot has it; Lowes does not. The two stores have basically equivalent product assortments. Lowes is 10 minutes closer to my house, but I have found myself on multiple occasions driving the extra 10 minutes to use self checkout.

Al McClain
Guest
Al McClain
11 years 5 months ago

From a consumer’s viewpoint, I think the key is the ease of use of the systems, combined with the addition of new functions as consumers get used to them. My ATM, for example, now allows me to print my latest statement while getting cash. And, online check-in for most airlines allows you to see the seating chart and select your seat based on not just whether you want a window or an aisle, but where other passengers are seated, where the bathrooms are, etc. For some consumers, the benefits of self-service outweigh those of full service. For retailers, it’s a matter of getting the most consumer-friendly systems, and having enough staff to educate first or second time users.

Craig Sundstrom
Guest

I’m rather startled by the number of negative remarks regarding S/C: in this (presumably) tech-happy era, I’m not sure whether to be pleased or disturbed… but I am surprised.

As for the trend itself, I have mixed feelings: sometimes I use it, some times I don’t (at least with low-volume purchases… I couldn’t see doing it with a whole cartful). I think, in summation, I’d agree that it’s a great addition, but a poor substitute; but I doubt very much the “improves shrinkage” claim will continue as would-be thieves become more sophisticated in using them.

Bill Bishop
Guest
Bill Bishop
11 years 5 months ago

Self-checkout holds significant potential, but it’s important to recognize that there are two different degrees of commitment from a technology point of view that retailers must make to take advantage of that potential.

Fixed station self checkout is being deployed broadly across the business, but there’s an amazing lack of consumer marketing/benefit associated with these new installations. Best-in-class operators are 1) providing training to shoppers to allow them to more quickly learn to use the system; 2) providing more than adequate staffing for payment and/or problems; 3) avoiding unnecessary slow-downs caused by the need to validate credit card transactions, and in other ways personalizing the self-checkout experience.

The real breakthrough in self-checkout, however, comes with portable self-checkout, i.e., scan, bag, and pay. This technology can dramatically increase the shopper’s interaction with the store and speeds the entire checkout process. Best-in-class retailers have made this technology available to their top shoppers as a reward that can cement loyalty.

Bernice Hurst
BrainTrust

In a purely anecdotal and extremely small sampling response to Stephen Needel, I can vouch for having had two experiences (in the US and the UK) with extremely intelligent and relatively affluent shoppers who had so much trouble that they swore off ever using self-checkout again. And neither of those shoppers was me. I have also sworn off them. Which brings me to Michael Richmond’s point – the supermarket where I shop uses hand scanners that you take around with you; at the checkout you simply hand it in and it calculates your total (although you can see a running total as you shop and can return things and make amendments as necessary). It was this technology that put me (and one of the shoppers mentioned above) off the whole process.

In terms of differentiation, I agree with others who have said customers need to be able to choose. A good retailer will have both self-checkout and assisted checkout available at all times so the length of lines is visible and the amount of time the shopper is willing to spend can be decided on the spot.

Gene Hoffman
Guest
Gene Hoffman
11 years 5 months ago

ODE TO THE CHECKOUT PROCESS

When self-checking at my store sublime

I heard a voice but that voice was mine.

Alone I was doing all the checkout work,

A shopper’s duty that I did not shirk.

Soon I realized that I was working all alone

Except for a distant voice on a cell phone.

Then it dawned me that my joy in shopping

Is the fuzzies I get from people watching.

Now I stand in lines watching life’s flow

Because my life can benefit from more slow.

So I say to shoppers who must always hurry

Let the stores save on labor while you scurry.

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