Will data-driven checkout get shoppers through the line faster?

Discussion
Source: IndaFlow's Feloh system
Dec 28, 2016
Matthew Stern

Grocers have long struggled to reduce the time customers spend waiting in line. Now regional grocer Hy-Vee is addressing the perennial problem with a data-driven solution.

A new checkout management system is being piloted at one Hy-Vee location in Nebraska, KETV reported. The system, built by startup IndaFlow, gathers real-time data on how each checkout line is moving with sensors that gauge such metrics as the number of people in line, cart size, the number of items on each checkout conveyor and even cashiers’ movements. Based on this data, the system calculates which line is moving fastest and displays a red, yellow or green light above each checkout to signify its speed.

For shoppers, a green light indicates an open lane or short line while yellow or orange lights signal longer waits. For stores, an abundance of orange lights can point to the need to open more lanes. The system can reportedly help managers plan better for busy times and set goals based on the metrics derived.

The Omaha World Herald said the new system has reduced average wait times at the store to less than three minutes from more than four minutes.

The system seems to take another step beyond Kroger’s QueVision system, which uses infrared sensors to count customers entering the store and at checkout lanes to help anticipate in real time how many registers need to be open. QueVision was launched in 2013.

A popular low-technology option to increase checkout efficiency is the single queue, used by Trader Joe’s and Whole Foods. Many new technology options do away with the traditional checkout, instead equipping employees with handheld devices for mobile checkout or providing self-checkout scanners for shoppers.

Perhaps the future is being piloted by Amazon Go and its entirely checkout-free experience. According to The Verge, Panasonic is testing a similar system in Japan in which items are scanned as they’re placed in a smart basket and then automatically bagged at checkout.

DISCUSSION QUESTIONS: Does sensor technology hold the potential to significantly reduce checkout wait times? Besides increased speed, what other benefits do you see from high-tech checkout technology?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"In theory this is a great idea. But the articles do not mention the cost of the system or the ROI."
"A store pays for brighter lights, a better entryway, new paint, etc. Is this just another expense to add to the ambiance...?"
"Has anyone ever compared the added labor costs of this simple low-tech solution to the cost of high-tech ones? I doubt it."

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16 Comments on "Will data-driven checkout get shoppers through the line faster?"


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Dr. Stephen Needel
BrainTrust

In theory this is a great idea. But the articles do not mention the cost of the system or the ROI. The latter is particularly tricky — unless Hy-Vee has a reputation for overly long lines, it’s unlikely that shoppers will a.) recall how long they usually spend in line and b.) recall how much shorter the wait is with the new system. And as the newspaper article mentions, one person with alcohol, a lot of produce, coupons, or (heaven forbid) writing a check can gum up the works.

Ben Ball
BrainTrust

All good stuff, but baby steps compared to Amazon Go. Dr. Needel makes a great point about how realistic the costs may be. And just because Amazon/Bezos will lose money to offer the best experience doesn’t mean grocers can or will. But my vote is that we see digital checkout as the norm within 10 years. We’ll see.

Shep Hyken
BrainTrust

The line is a friction point. However, consumers are used to it. Give them a better experience and they will appreciate it. The key to this is to make sure the consumer knows they are experiencing a better level of service or experience. That makes them appreciate it and, ideally, they reciprocate with some loyalty.

That said, there are two things to consider. Does this technology give the store a competitive advantage? In other words, does a faster line mean more business or loyalty?

Second, does that math work? Does the cost of the system equate to more business? Or does the cost, amortized over a period of time, come out to such a small amount per customer or transaction that it is worth it?

Another way to consider the dollars: A store pays for brighter lights, a better entryway, new paint, etc. Is this just another expense to add to the ambiance, thereby making it a sensible investment?

Sterling Hawkins
BrainTrust

Nobody likes waiting in line and any improvements are welcome advances. However, with Amazon Go and other more advanced sensor technology on the near-horizon, it does seem like there are some bigger gains to be made vs. the incremental benefit of making the existing lines slightly faster.

Steve Montgomery
BrainTrust

Like many, I started my career as a grocery clerk in a supermarket. I have seen many improvements in line management over time but, as the newspaper article indicates, in a supermarket customers still make their own decision about which line to get into. For systems like IndaFlow to work to their maximum effectiveness it requires consumer education.

As Stephen indicated there are many things that can trip up the system. I frankly remain amazed by the person who waits until their order is completely rung up before locating their checkbook and beginning to write a check. With all their potential issues I love being in charge of my own fate and use a self-checkout as much as possible.

Ross Ely
Guest

Checkout lines are a great area in which to apply new technology, as shoppers consistently cite wait times as one of the biggest frustrations of the shopping experience. Hy-Vee’s results seem to indicate that the technology is succeeding in significantly reducing the wait times.

In addition to faster checkout speed, the new technology can increase the store’s efficiency, enabling it to better compete with low-priced alternative channels.

Mohamed Amer
BrainTrust
Mohamed Amer
Independent Board Member, Investor and Startup Advisor
2 years 4 months ago

What Amazon Go has done is use technology to completely redefine the checkout process by reimagining the shopping experience. It wasn’t a tweak on existing processes. They began with a clean slate and limited assortment. They identified a segment that is willing to try, and even asking for, a different grocery shopping experience.

To apply sensors to an existing store footprint means adding greater variety to the processes which actually increases execution complexity and the potential for failed consumer expectations. Certainly testing and piloting new ideas is a necessity to survive and thrive; however, how you choose to roll out and execute will determine their success. Trying to be all things to all people is a sure path to frustration and missed opportunities.

Charles Dimov
BrainTrust

What has Amazon Go done for us? It has sparked our attention, and sparked our imagination! It is spurring the next step in omnichannel competition.

Any steps toward making the in-store experience better is a good thing. Consumers who perceive the in-store experience to be positive are more likely to become repeat customers. The biggest hassle we have all gone through recently has been the long, tedious check-out lines during holiday season.

Part of the promise of omnichannel retail is to make it a seamless positive brand experience. So onward and upward with checkout technology that makes it a pleasure to shop. It will only encourage more online orders to be picked up in-store (where there will be more purchases — up to 69 percent more … ).

Lesley Everett
Guest

One of the biggest frustrations with grocery shopping is the waiting in line at the checkout. Over 5 minutes and it becomes a real irritation. This solution sounds as though it could work well and be relatively inexpensive to implement for the potential return of attracting more busy customers. If I know the lines in one grocery store are consistently shorter and quicker than another, this would certainly cause me to chose it. It all adds to the positive customer experience.

Ralph Jacobson
BrainTrust

There has been similar technology, one called “Line Director” available for more than a decade. A prominent grocer has this in place in a Manhattan store. I find the biggest challenge still to be human execution. If the store staff isn’t responsive to changing traffic, POS lines won’t be optimized regardless of the technology used. I do like innovative layouts that eliminate physical POS terminals completely.

Craig Sundstrom
Guest

“…New system has reduced average wait times at the store to less than three minutes from more than four minutes.” Well, there you are. Does anyone really think long wait times are (as a rule) caused by anything other than stores not having enough checkers? And, as such, this isn’t likely to change that … this is a staffing/personnel cost issue, not a technology one.

John Karolefski
BrainTrust

Tests of all these high-tech checkout solutions — at Hy-Vee, Kroger, and Amazon’s store — sound great, but at what cost? Will grocers invest a lot of money to outfit ALL of their stores with these solutions? I doubt it.

Grocers who want to move shoppers out the door quicker could simply open more checkout lanes during busy periods. Has anyone ever compared the added labor costs of this simple low-tech solution to the cost of high-tech ones? I doubt it.

Larry Negrich
BrainTrust

This is a rather tech heavy way to solve the long-standing issue of reducing the wait in a grocery checkout line. Better to invest in ways to reduce the wait and improve the experience at the same time by expanding options. Self-checkout lanes, self-scan apps/devices, traditional lines, express lines, online ordering, etc. each have application in the one-size-does-not-fit-all retail world.

Marge Laney
BrainTrust
2 years 4 months ago

Sensor technology definitely has the potential to reduce wait times in retail and not just at the checkout. In fitting rooms we’ve learned that fitting room utilization without occupancy visibility runs between 50% and 70%.

That’s a lot of underutilized real estate! Lines cause cart abandonment and that is a direct hit to the retailers’ bottom line.

We published an eBook, “What’s your Queue Costing You” a while back which discusses the positive effects of queue management on the satisfaction and retention of customers and sales associates.

The problem with applying technology to processes that have been run without technology since day one is that retailers often fall back on the “this is the way we’ve always done it” mentality.

Mark Price
BrainTrust
Mark Price
Managing Partner, Smart Data Solutions, ThreeBridge
2 years 4 months ago

The benefit of sensor technology is most apparent when the data is combined across stores and correlated with marketing, sales and product assortment data to better forecast demand by hour by day by store. These applications of machine learning are revolutionizing retail today and will do more so in the future.

Naomi K. Shapiro
BrainTrust

As one who thinks I always choose the “wrong” line and then frets about whether to move to the one that looks like it’s moving faster, I’d welcome this technology. Note that it also takes into consideration the speed at which the line is moving, which can be a reflection on the skills of the cashier, indicating that line may take longer in the long run. Although I love self-determination, i.e. using the self checkout, I admit I also avoid self-checkout if I have items that might be harder to check myself, like ones that require weighing or an unusual item. I do think this “traffic management” is definitely in the future.

wpDiscuz
Braintrust
"In theory this is a great idea. But the articles do not mention the cost of the system or the ROI."
"A store pays for brighter lights, a better entryway, new paint, etc. Is this just another expense to add to the ambiance...?"
"Has anyone ever compared the added labor costs of this simple low-tech solution to the cost of high-tech ones? I doubt it."

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