Study: Self-Checkout Curtails Impulse Buys

Discussion
Sep 20, 2007

By Tom Ryan

According to a study from IHL Consulting Group, impulse purchases among women drop 32.1 percent and men 16.7 percent when self-checkout is used instead of a staffed checkout.

The primary reason for the drop, according to the study, is that self-checkout devices are not as merchandised as staffed lanes in most retailers. Additionally, there is usually a shorter line at each unit, removing the captive audience with the tempting impulse items in front of them.

The findings were part of IHL’s North American Retail Self-Checkout Systems Market Study, which found that consumers spent more than $137 billion in retail self-checkout in 2006, a 24 percent increase over the prior year. The gains were mostly driven by expanded self-checkout use in DIY stores, supercenters and warehouse clubs.

Not surprisingly, the study, which included surveys of 1,000 consumers conducted in the spring and summer of this year, found that acceptance of the devices increases sharply as consumers use the machines more.

“The more retailers can provide an incentive for people to use self-checkout to get past this hump, the more their checkouts can be converted to self-checkout,” the report said.

Other findings in the study:

  • A positive view of self-checkout technology is formed over a rather short
    period of time. Of those who have used self-checkout at least six times,
    86 percent have a positive view of the technology;
  • Consumers earning more
    than $100,000 a year are slightly more inclined to self-checkout. The report
    theorizes that higher-income consumers travel more and are therefore exposed
    to self-ticketing kiosks at train stations and airports;
  • Consumers in the
    South are the most positive about self-checkout, with 75 percent having a
    positive view about the technology;
  • Sixteen percent of the sample said they
    would be more likely to use self-checkout if they could pick the voice of
    a person to guide them through it. Most popular voices: Tom Brokaw or Walter
    Cronkite, (picked by 21 percent); Don LaFontaine, the movie trailer guy,
    (13 percent); and Darth Vader, (12 percent).

Discussion Question: Are self-checkouts a threat to high-margin impulse buys?
If so, what, if anything, should retailers do about recapturing impulse buys
at self-checkout stations?

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21 Comments on "Study: Self-Checkout Curtails Impulse Buys"

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Mark Lilien
Guest
9 years 9 months ago

Many self-checkout shoppers might not be impulse shoppers to begin with. It’s not clear that the impulse buying reduction is due to the technology. Maybe fewer distractable folks choose self checkout, or maybe self checkout lines move faster, or maybe self checkout lanes are merchandised differently. Or maybe as the novelty of self checkout declines, impulse shopping will rise. I still can’t understand why fast food restaurants largely ignore self checkout. The computer could just as easily make additional menu suggestions as the human order takers.

Kai Clarke
BrainTrust

Lies, damn lies and statistics, Mark Twain wrote, and as some of my peers have noted, the real issue here is not the few items that are merchandised at the checkouts which have an impact on impulse buying, but it is the sheer number of items merchandised (and at what price, in each location) throughout the store. A well-merchandised store will drive an incredible amount of impulse purchases through the store, rather than having the consumer wait until they get to the checkstand. Go through any top-rate store and you will see the effects of impulse merchandising throughout the store as things like ice cream scoopers are located by the ice cream section, chip bag closers are located by the potato chips, etc. It is this placement, as the consumer goes through each aisle, that spurs the most amount of impulse buying.

Michael L. Howatt
Guest
Michael L. Howatt
9 years 9 months ago

I had no idea my colleagues are so passionate about self-checkouts. Personally, I haven’t ever used one and don’t care to. Am I a dinosaur? Perhaps. But I still represent the majority, and I rarely buy anything at the checkout on impulse. So let’s not be too hasty in our assessment of this technological terror we have created (Darth Vader, Star Wars). Better merchandising at the self check-outs may still not be the right answer.

Doron Levy
Guest
Doron Levy
9 years 9 months ago
A client of mine wanted to join the self checkout bandwagon and I advised against it. In a recent focus study I organized, 85% of my respondents stated that self checkout lanes did not provide the service they were expecting. Self checkout lanes are the worst innovation in retail today and I believe that any chain that implements these systems is short changing themselves and will see a detrimental effect on their bottom line and customer service levels. In my field observations, I have noticed that most customers will come to the front of the store when looking for help and if all they find are these unmanned self serve lanes, they are immediately turned off to the whole concept. Another factor (which is more important) is the impulse buys and suggestive selling that happens at the till. With these self serve machines, there is no opportunity to ‘sell’ the customer additional items before they leave. What I am noticing (and I think it’s ironic) is that the 2 major chains (Loblaws and Home Depot) that have these machines operating were already contending with declining customer service levels. Let’s put people back into retail and give the customers what they… Read more »
Dr. Stephen Needel
BrainTrust

I think Tom has it right when he attributes a lot of the decline to less merchandising by self-checkout lanes. Self-checkout is not a threat to impulse products, it just requires better merchandising than your ordinary checkout lane.

James Tenser
BrainTrust
Users of self-checkout are self-selected, by shopping occasion and possibly by underlying psychographics, which presents a research sampling problem. A highly valid study would need to find a way to measure and compare the impulse purchase behavior of the same individuals when they use self-checkouts and when they do not, and correlate those behaviors with their need states on each occasion (quick trip, fill-in, stock-up, etc.). In fairness to IHL, this is not an easy methodology to engineer. And there is real value in asking people how they feel about self-checkout technology, and in comparing the transaction logs across manned and un-manned checkouts, so this study is welcome. True, self-checkouts as presently configured usually allow less room for impulse item merchandising, reducing the opportunity for such purchases. But observing that self-checkout users make fewer impulse purchases does not rule out the possibility that those shoppers are not already disinclined to buy tabloids and gum. This is why the need state question seems so important. From this research we may correctly state that self-checkout lanes have lower impulse purchase rates. But users who choose the self-checkout option may already have made up their minds to ignore impulse items–and they would do… Read more »
Paula Rosenblum
BrainTrust

Self-checkout suits some people–especially at stores with notoriously poor service.

Because the lines for self-checkout are not straightforward like they are for regular check-out lines (you’re never sure which one will come free first), people are distracted and I don’t think merchandising would help.

This is just a function of the law of unintended consequences.

Thomas Mediger
Guest
Thomas Mediger
9 years 9 months ago

Since the first time I saw a self-checkout scanner I have wondered why there is little to no point-of-sale merchandising. The ones that I have seen still have a line of people waiting to use them with nothing else to do but wait. These consumers are just as captive of an audience as regular checklane consumers.

Len Lewis
Guest
Len Lewis
9 years 9 months ago

I am not 100% for self checkout because it simply a ploy in many cases to have consumers do more work. Not the ideal circumstance for high margin goods. Also, they afford greater opportunity for theft.

However, if you’re bent on having them, make sure they work. I can’t tell you how many times I’ve seen two out of four self-checkouts with out of order signs.

Mary Baum
Guest
Mary Baum
9 years 9 months ago
Another factor might be self-checkout’s built-in limitations. At Schnucks and Dierbergs in St. Louis, the kiosks only work for orders of 20 items or fewer, and the merchandise obviously has to be prepackaged with a fairly prominent UPC code. Or it has to be a very common produce item, like apples or oranges. So, no exotic fresh produce or bakery. No big cakes, because you can’t “please place the item in the bag.” Also, you’d better hurry along–no dilly-dallying to figure out how to bag your groceries efficiently for the unloading at home, because every three seconds, you’ll hear that impatient voice: “please place the item in the bag.” By the time I’ve heard that three times in thirty seconds or so, I start to feel incompetent — and I fix computers! Imagine how your basic mom or sales guy or grandpa feels. Plus, that hurry-up attitude sort of obviates the need for impulse merchandising — you’d almost have to program the system to say, “Would you like any candy or magazines? Please scan them now and place them in the bag.” Or, “You now have fifteen seconds to choose a tabloid.” I suppose you could get fancy and have… Read more »
Bill Bittner
Guest
Bill Bittner
9 years 9 months ago

No surprise here, one of the reasons I use the self check-out is because you don’t have all the candy and magazine racks. I guess the evaluation you have to make is whether the labor cost you save makes up for the lost sales and direct profit from impulse buying you lose. Judging by the number of cashiers kibitzing by the ice machine I would think it is a net loss.

Mark Lilien makes a very interesting observation in his comment. It is not clear that the same people were observed in different circumstances. The population was probably already tainted against impulse buying because it consisted of shoppers like myself.

David Biernbaum
BrainTrust

Self check scanning aisles are here to stay because they represent the times we live in, where a large number of every-day people need to shop fast and get back to work, car pool, or to wherever they are going next. The lack of impulse purchasing is offset by the business that supermarkets and discounters avoid losing to C-stores.

Raymond D. Jones
Guest
Raymond D. Jones
9 years 9 months ago

Dechert-Hampe has done extensive studies of self checkouts as part of the Front-End Focus series (some of this is available in the RetailWire Tips section).

Clearly, retailers risk lost impulse sales when they fail to merchandise the self-checkouts. Our studies show consumers do not generally “shop” the checkouts to find impulse items and then use the self checkout, with a resulting loss of about 80% of the typical front-end revenue.

We have learned that many shoppers prefer the self-checkouts for a number of reasons. The most common reason is time savings, even though it really isn’t much quicker. The key is there is less wait time. The wait time is when shoppers tend to make impulse buys.

Self-checkouts require merchandising of a different type. They must capture the shoppers attention prior to the start of the transaction and focus on items of a true impulse nature. We have worked with several retailers to design and test new fixtures that work for this purpose.

Self-checkouts are here to stay and retailers need to recognize the unique merchandising challenges they present.

Ben Ball
BrainTrust

Contrasting “weo’s” comment with Doron Levy’s gives a great snapshot of the consumer opinion waterfront retailers face on this issue. Some love people–some don’t. Some only love nice people–and don’t always find them at every register every day. Some, like “weo” value the consistency of “Ann Page” who “never has a bad day.” High end, high service stores need to offer high quality self-scan alternatives too. In contrast to the experience Mary describes in the St. Louis market, here in Chicago, Jewel is changing out the “bag it now and get on with it” self-scan units for ones with automatic belts that facilitate self-scan of even larger items and orders with an easy “bag it the way you want when you’re done scanning” approach. I can’t remember the last time I went to a live cashier in my Jewel. Oh wait–yes I can. I was in the store with my wife the other night and she observed that the cashier on lane 10 looked lonely, so we went through her line to say hello….

Stephan Kouzomis
Guest
Stephan Kouzomis
9 years 9 months ago

This is an interesting study. In many markets, the grocer has brought impulse products to the forefront of the self checkout area. Whether it’s drink coolers, heat display units for hot meals; tables for bakery items, and/or candy displays at the entry of the self check outs, these types of products are very visible to shoppers. If gum, candy and little gadgets are the lost impulse purchases of concern, why is there any discussion? Drinks, meals, magazines, etc, bring more gross profit margin!

However, if the study is suggesting that the shopper who uses the self-checkout system is one who isn’t interested at that point in shopping for the week; but is buying for a major dinner event for the day, or just getting 4 products, one may understand the possible lost impulse sales. But, in such cases, these shoppers will be back for the bigger shopping trip!

Very interesting research, and an opportunity for more understanding of these results. Hmmmmmmmmm

Joe foran
Guest
Joe foran
9 years 9 months ago
Only one commentator hit on this; the difference is about the wait…being a ‘captive audience’ while in the checklane. Be it magazines, blades or candy, the consumer makes impulse purchases while they wait for the cashier to ring up their goods. In the U-Scan lane, even if it is more like the traditional checklane with a long belt and full checkout fixturing, the consumer is now engaged doing something (ringing up groceries) rather than shopping the checklane. They simply don’t notice the candy behind them or the magazines above the belt because they are focused on the scanner and the screen. Additionally, I think there is a loss of impulsiveness as consumers approach the self-checkout; it’s something akin to ordering from the Soup Nazi. As you approach the U-Scan, the last thing you want to do is to have to ask the attendant for help; this will slow you down and everybody will think you are an idiot because you can’t use the U-Scan. You can see consumers assess the checkout as they approach it, and get ready to use the machine; this takes away their ability to notice the latest on Britney’s latest folly on all the magazine covers,… Read more »
justin tyme
Guest
9 years 9 months ago

I am a big fan of the U scan self service checkout. They afford me the opportunity to shop at my favorite store with the convenience of getting out of the store quickly.

A&P has installed more than a thousand of these self scanners in their family of banner stores. It is a pleasure to use them.

I find that “Ann Page,” (who I affectionately refer to the voice at the self scanner) really knows “her” stuff. She gives me the correct price, processes double and triple coupons with the speed of light, and is always courteous.

She never has a bad day.

David Livingston
Guest
9 years 9 months ago

It’s a no brainer that self serve checkouts are a threat to high margin retailers. I suppose that’s why I cannot think of a high margin retailer that uses them. They are typically used only by retailers who have difficulty in finding cashiers who can provide a better exit experience compared to a machine.

John Lansdale
Guest
John Lansdale
9 years 9 months ago

So the old managed register/impulse sales presentation paradigm isn’t effective with self-serve registers? Hmmmm.

People still have the impulse money budgeted (I presume). Might we not think of something new?

David Aron
Guest
David Aron
9 years 9 months ago

Since I often have to go to the store after my kids are in bed, my choices were to go to Store 1 and pull a stock clerk off task to find a cashier to ring me up, or go to Store 2 with the self-checkout lanes. This is an example of the importance of great (or at least, any) customer service. Whatever impulse purchase I might have made at Store 1 may also be lost to Store 2, but at least Store 2 makes the overall sale.

Ashwin Ramaswamy
Guest
Ashwin Ramaswamy
9 years 9 months ago

Self checkout has two downsides that result in reduced impulse shopping

1. Lesser waiting times;
2. Lack of a human in front to show off spending power. Impulse purchasing is so much an unconscious public display of power.

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