Walmart Testing Scan & Go Checkout Feature
Walmart is testing a new system that would allow customers to scan items with their iPhones and then quickly pay at a self-checkout counter.
According to Reuters, the "Scan & Go" feature won’t enable shoppers to pay with their phone, but by scanning items in the aisles, shoppers can quickly transfer their list to the self-checkout counter to pay in one quick step.
The trial, which is taking place at its supercenter in Rogers, AR, comes after Walmart indicated earlier this year it was adding more self-checkout lanes at its Walmart and Sam’s Club stores to help reduce costs. At an investor conference in early March, Walmart’s Chief Financial Officer Charles Holley noted that about $12 million in cashier wages are accrued every second at its Walmart U.S. stores. At the time, some 1,600 of the more than 3,800 U.S. Walmart stores already had them. At Sam’s, about 80 out of 611 stores had them and another 220 Sam’s were expected to get them by the close of 2012.
But the other aim of Scan & Go is to reduce checkout times and congestion in stores. The Reuters report said Walmart’s slow checkout lanes are often-heard complaints on Twitter and other forums. Unlike others, Walmart doesn’t employ extra baggers to speed checkouts.
"This is probably the fourth technology that [the retail industry has] tried between shopping carts, RFID chips, the handheld scanners and now we’ve got smartphones," Paul Weitzel, managing partner at Willard Bishop, told Reuters. "We’re looking for ways to improve that experience as an industry."
Beyond the scanning option, Walmart could collect data on what customers buy and how long they shop, according to the Wall Street Journal. Coupons could also be sent in real time as they’re scanning.
"If you scan an item of peanut butter and immediately a two-dollar-off coupon pops up to buy a competing brand’s peanut butter, Walmart can change customers’ behaviors right there in the aisle," Evan Schuman, Editor-in-Chief of StorefrontBacktalk.com, told the Journal.
Walmart’s app already lets shoppers create lists, find aisle locations for items, check price or product availability, and print coupons.
Scanning to create checkout lists is still rare in U.S. retail. Shop & Stop’s Scan It! App, which is tied to the grocer’s loyalty program and offers exclusive offers, works similarly. Apple’s EasyPay feature allows shoppers to purchase products in store without interacting with any salespeople.
In another route to reduce checkout wait times and replace cashiers, Nordstrom, Penney and Apple are equipping floor associates with payment-enabled tablets.
Discussion Questions
What do you think of Walmart’s “Scan & Go” feature? What are the benefits as well as possible pitfalls of enabling shoppers to self-scan merchandise? How does this system compare to other emerging scan/pay options?
Feels like a weigh station on the way to some destination. Handheld devices will begin to make progress in the shopping process when they simplify it. Mobile pay is essential, as well as some ergonomic method that doesn’t require juggling the product, the phone, the shopping list, etc.
This connection between smartphones and in-store shopping behavior is very smart. Is is nice to see a retailer embrace the technology for its ability to solve problems, rather than whine about its dark side. Truly an innovative step outside and inside the box. Are grocers so busy plugging the leaks that they can’t invest time to think like this?
Self-scan using mobile will increase transactions per hour for the same square footage by removing the queued element and introducing parallelism.
What’s kind of upsetting is how retailers like Macy’s and JCPenney or even Toys “R” Us do not seem prepared to offer mobile self-scan service for the upcoming holiday season.
For Walmart, it would be interesting using Evan Schuman’s scenario when I buy a consumer product brand, walk away and get a $1 off coupon to purchase a private label counterpart….
I’d be surprised if they don’t see a marked increase in shrinkage. And agree with Joel — don’t think this will be a major improvement in time savings.
I wonder how much of an overlap exists between iPhone users and Walmart shoppers. Is it enough to make this a worthwhile effort for Walmart? My assumption is, if they can make the concept work to their satisfaction, Walmart will expand to other types of phones as well.
My concern is not with the technology, but with the customers’ ability to scam the system. Nothing in the article indicated how the actual payment process works. Can the customer send the items they scanned to a self-checkout and then bag and pay? Issues surrounding shrink at self-checkouts have been discussed here and elsewhere. What prevents the customer from scanning one item and then taking a more expensive one?
Think this is a great concept as I am a fan of self-checkout, but as with many things, the devil is in the details. Hope it works because even though I don’t own an iPhone and seldom shop at Walmart, when I do I would love to see shorter lines.
Let’s remember that this is a trial of yet another technology, so at this stage, the real-world results will outweigh any predictions. However, for me, this is a critical indicator that a store that caters to the average and even lower tier American shopper is recognizing the viability of smartphone equipped customers at this point in time. So many naysayers are quick to counter my encouragement of smartphone based solutions, quickly touting the lack of market penetration and stating that it doesn’t reach mainstream consumers. It seems that Walmart may be in agreement with my belief that smartphone saturation is rising so quickly, that now is the time to get on-board, not after it has reached the 98th percentile.
Still, any scanning solution will have to be implemented and measured carefully. The cost savings and good feelings will have to be compared with new opportunities for shrinkage and the negative feedback of technology-deprived shoppers that will still have to go through slow check-outs as others “speed by.” Certainly, even if this trial goes permanent, it will evolve and adapt as Walmart gets customer feedback and looks at incorporating other mobile technologies, like mobile wallets.
The biggest benefit to Walmart is that they can now get closer to their customers and even get to know them better; what they buy, when they buy, and how much they spend. Walmart appears to be able to offer one to one electronic marketing and still not have a formal loyalty program. At least not yet!
While I understand from a business perspective that $12M per minute is a lot of money, I couldn’t care less as a customer. Am I, the customer, going to get further price reductions for doing more work? Ah yes, a coupon for my efforts!
I’m getting tired of retailers trying to save me time by getting me to do more of the work. Let’s call it what it is; payroll reduction to improve profitability.
Hopefully, one day more than just a handful of retailers will realize that investing in selecting, training, and paying people to serve their customers will not only make them money it will build a sustainable business that can weather most any storm.
At this stage of the technology evolution curve, these technologies are all about reducing staff and their associated costs. Retailers will certainly pitch a positive spin on this by saying that it is about improving the customer and shopping experience. This is simply masking the real economic reason — profits.
Any technology that can reduce expensive humans from the equation is what retailers are looking for. It will be interesting to see what the ‘shrinkage’ will be as these ‘self’ scan systems become more ubiquitous. As long as it’s less than $12 million per second at Walmart, the math works!
Transfer my list into the SCO lane? You mean, as in “allow Walmart access to my phone’s contents”?
Not gonna happen.
Clearly, this is a step in the right direction for self-scan technology. However, a “Scan & Go” feature is not to be confused with mobile payment.
The shopper still has to wait in line and have their order verified. It also does not address the problem of items which must be weighed or require intervention from the attendant.
While it is understandable that Walmart is seeking to reduce their labor costs, their focus should be more on improving the customer experience at checkout.
The concept is smart. I doubt it will be as effective as Walmart expects as there certainly will be bugs to iron out and it certainly will not happen at the store level.
My opinion is Walmart would better serve themselves, their stockholders and customers if they worked to make the shopping experience more enjoyable. I was shopping in a Super Walmart last week. There is seldom anyone available or willing to assist you if you are looking for something. They are always doing something else, or it is not their area to service. This is not the first experience with these types of problems. It is continual.
At this stage of the game I’d say they better put their IT staff on double time and their loss prevention staff on triple time. The “Go” part is an obvious benefit to shoppers, but the “Scan” bit is an open invitation to thieves.
Great way to reduce labor costs and improve their ability to make one-to-one offers to their shoppers. BUT, while WMT improves their ability to target to customers, they are creeping further and further away from having any human interaction with them. We now have a Great Divide in retailing (as in politics) with efficiency/price-minded retailers on one side, and service-oriented retailers on the other.
While Walmart was busy introducing another cost-savings scheme, Publix was generating over 106,000 likes on Facebook at last count, and 6,500 comments (99% favorable) because a store manager opened their doors for a customer who needed something, ten minutes after they had closed, and said, “Take your time!” So, it all depends which camp you want to be in — but don’t get stuck in the middle!
Shopper scanning and self-checkout are the wave of the future, driven by retailer cost and consumer convenience. However, pushing the cash-wrap function onto the shoppers means that the infrastructure among the customers must be in place; in other words, the shoppers need to have iPhones, apps and the ability to use them. Sure, many Walmart shoppers have these. But many do not. The have and have-nots will increasingly be divided by technology and ability.
I’m not looking for yet another annoying and frustrating self-checkout option … I want recognition for the thousands and thousands of dollars I spend per year at the supermarket with a *special concierge check out lane* — I want name recognition, bagging, carryout, and complimentary coffee for me, cookies for the kids. I want the best, perkiest, friendliest, nicest most helpful checkout team available. I want a REASON to shop with the big guys, rather than a reason to avoid them like the plague.
For the shoppers it is all about convenience. Self-scanning checkout is more convenient than manned lanes. Hand held scanners are more convenient than self-scanning checkout. This is the next step. It is that simple.
Will there be pitfalls? Of course, but they will be worked out. This is no different than the trauma grocers experienced when checking out moved from the man behind the counter to, OMG, a checkout lane removed from the watchful eye of the owner.
Twelve million dollars a second in labor costs seems to have a lot of potential for COGS savings. The person or committee that thought of the idea of promoting customers to cashiers has been off of the floor for so long that they completely forgot that shrink is a problem that only occurs when people freely interact with facilities and or inventory. In the problem of shrink, the more freedom and privacy any individuals are awarded in any transaction type, the more we will see exponential increases in COGS. I am often amazed at how many poorly crafted innovations come to fruition. This perspective of cost savings opens a lot of opportunity for the exploitation of loss prevention methods in place, and needs to be evaluated for its inherent ability to create more problems, as in shrink opportunity, than it solves.
There are always threats and challenges to exploring new ground — shrinkage, loss of personal contact, missed items in the basket, etc. Nevertheless, kudos to Walmart for testing new ground that could save consumers time, build a convenient log of their purchases, and potentially save Walmart money — $12 million per second isn’t chump change.
The June, 2012 BIGinsight Media Behaviors & Influence Study indicates that of over 10,000+ Walmart shoppers surveyed, 16.7% say that they own an iPod. That is lower than the 20.1% of the general population, but still a sizable base with whom to test.
There is a useful Chinese proverb, “Be not afraid of going slowly; be only afraid of standing still.”
Walmart is taking an important step. They’ll learn from it, you can be sure.
I am sure many companies are happy Walmart is doing the testing and will be urgently waiting the results. Many companies tried self-checkout lanes and some companies have abandoned them. Many companies will be watching this experiment.
The goal should be Amazon’s “one click” equivalent for the store. I believe that many customers (certainly enough to move the needle on labor expense) will choose to scan with their phone while shopping if there is no line between them and the exit. Bravo Walmart for helping move this concept along.
Of any retailer that I have visited, at home, or away, the WM in my resort town does the best at self-checkout. They always have someone present at the lanes and several overseeing the checkouts both on the customer side and on the exit side.
Yes, I did say the best of ANY retailer.
Technology advancing as in these types of options is inevitable. Notice who is leading. It is one more way that WM is dominating retailing. It is one of the most executable and practical solutions I’ve seen discussed by any retailer or technology provider. This is a perfect way for them to eliminate their weakest link – service. It is a great service enhancement.
If anyone can make it work and make it work quickly, it will be WMT. Others may find reasons against it or not to do it. However, I see it as a great option especially for a retailer not known for service or technology advancement. They may have it, but it isn’t the first thing you think of at the mention of WMT.
I think the benefits is in the data collection on basket level and possibly tying to CRM for personalized offer. Would need to see the time and motions study results to understand how the “dock and go” part to transfer the scanned list to the self checkout. I am going to assume there will still be one cashier to every 2-4 self checkout to handle overrides and other issues.
Remember back in the ’50s when the latest thing was push button transmissions? Probably not, it was a solution in search of a problem too. Few here seems very excited — shrinkage risk, shopper confusion, etc. — and I feel no differently, but yes, props for trying (and getting their name in a news for something at least potentially positive).
In a world where CVS locks up razor blades and hair products because of theft, I can’t imagine how this has legs for such a large mass merchant.
Scan & Go has the potential to both reduce costs and improve customer experience in the checkout process. The benefits include providing customers with a sense of control as well. In addition, Walmart may be able to get access to the smartphone data and use that information to adjust inventory onshelf faster than normal.
The final benefit is being able to create a pipeline to the smartphone of a specific segment of their customers, which can be used to direct information and incentives both in- and out-of-store.
The pitfalls are all in the execution. If consumers enter their product information incorrectly, rather than speed up the checkout process, the smartphone app may in fact slow it down.
All in all, an impressive way to reach more upscale and educated Walmart shoppers.
I agree with Frank and would like to amplify that if I can get you to use MY application while shopping my store, I can perhaps control and at least react to price comparisons! Putting checkout, price checks, product locators and other shopper wants in the hands of shoppers is a great way to have them view the world through the color or glass that you want them to use.
They are playing here. Much like Amazon plays. learn => and improve.
I also agree with Dan. I don’t see much innovation of this sort in supermarkets. An exception or two, but no more.
While I think this is an interesting concept, the associate will still need to confirm the order at the checkout stand, and collect the money. Without a payment option, I think this is a good start at reducing time at the checkout. Overall, it is a start.
Let’s not forget that this is a Walmart test limited only to Walmart staff, not customers, at this point.
The reality is that the mobile wallet, and its control, will represent the control of retail, to a large extent, in the years ahead. Of course there are a lot of problems to be solved. But a journey of a thousand miles begins with a single step, and this is a step in the right direction for Walmart.
This isn’t mobile wallet stuff, but an important precursor to it. Some of us remember the negativity when scanners were introduced in the seventies. Self scanning is a logical progression — glad to see Walmart at least putting a toe in the water here.
As Camille points out, some grocery stores have already abandoned self-checkout lanes, while Walmart is embracing them and now building upon the concept. At least one store that ditched self-checkout says theft (intended or otherwise) was part of the reason, along with customer confusion that slowed down the whole process. A store near me once allowed you to scan your own coupons during self-checkout, but now forces you to hand them over to the checker.
Stores are having to decide whether they want to give up control to the customer — with all the risks but also potential cost savings and data mining possibilities that entails — or whether they want to maintain some control by implementing safeguards and looking over the customer’s shoulder to make sure they’re doing it “right.” They can’t have it both ways, or ultimately it’s not really a convenience to the customer at all.
Well, I think that QThru solution is much more relevant — indeed, where is the loyalty program on Walmart’s solution?
I have experienced a similar test at Kroger, Scan, Bag & Go, and it is an utter disaster from my perspective. After I scan and bag everything as I shop (nice), then I have to find an attendant at the U-Scan, let her load the list into the system, then watch her REMOVE 75% OF THE ITEMS FROM THE BAG AND RE-SCAN THEM to verify the list! Then pay and repack myself. What a waste!