Does self-checkout make sense for Costco?
Six years after announcing plans to get rid of many self-service checkouts, Costco is again testing them to help combat long waits at manned registers.
On its third-quarter conference call, Richard Galanti, Costco’s EVP and CFO, said about 125 self-service stations have been installed across Costco’s 536 U.S. stores. The warehouse club operator plans to extend that to 250 over the next several months.
“It works,” Mr. Galanti said. And works best, he said, “in high-volume locations where it’s got a lot easier,” citing consumers who use contactless credit cards that employ radio frequencies and a one-time code to complete a transaction.
He added, “It’s very fast and customers are using it. Our members are using it. And it’s saving some labor at the front end. As important, on the highest volume units, it’s getting people through the front end faster.”
Costco first announced plans to eliminate self-checkouts in 2013 after tests led management to believe that employees could do a better job. Costco CEO Craig Jelinek told Bloomberg at the time, “They are great for low-volume warehouses, but we don’t want to be in the low-volume warehouse business.”
The new test comes as the self-checkout attention has shifted from physical stations to mobile scanning technologies. Warehouse competitors, Sam’s Club and B.J.’s Wholesale Club, as well as Amazon.com, Kroger, Meijer, Macy’s and others now offer ways for shoppers to scan items and check out via their smartphones. Most require customers to checkout via an express lane.
Costco already has employees checking receipts at exits.
Retailers are still investing in physical self-checkouts. Target last year added emojis to its screens to help shoppers identify produce. Dollar General is expanding its self-service checkouts, while Parker’s, the c-store, is introducing self-checkout to its stores in Georgia and South Carolina.
Moves to self-checkouts could be seen as a threat to retail cashier jobs. Costco regularly ranks near the top of lists best corporations to work for.
- Costco Wholesale Corporation Reports Third Quarter And Year-To-Date Operating Results For Fiscal 2019 – Costco Wholesale Corporation
- Costco Wholesale Corporation (COST) Q3 2019 Results – Earnings Call Transcript – Seeking Alpha
- Costco Is Totally Eliminating Self-Checkout In Stores – Business Insider
- There’s More to ❤ at Target’s Self-Checkout, Thanks to New Fruit and Veggie Emojis – Target
- BJ’s Wholesale Club Now Offers Express Scan- Quicker Shopping – BJ’s Wholesale Club
- Harris Teeter tests self-checkout store – RetailWire
DISCUSSION QUESTIONS: Do you see more pros or cons in Costco’s re-introduction of self-scan checkouts? Should Costco have gone straight to a mobile-scan option?