EXPERT ANALYSIS
SECTION ONE
SECTION TWO
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Are Self-Checkout Terminals Worth the Investment?
About 15 years ago, grocers started installing self-checkout terminals. Today, all new chain-owned stores
in the U.S. and other developed countries will include self-checkout terminals, say vendors of the hardware.
They are reporting strong double-digit growth internationally for the last few years in the self-checkout
market because customers dislike waiting in line at traditional checkouts. Over the years, however, grocery chains such as Big Y Foods, Jewel-Osco, Costco and others have removed self-check units from stores because of customer complaints.
DISCUSSION QUESTIONS:
Are self-checkout units worth the purchase in terms of favorable ROI? What generally has been the feedback of shoppers?
EXPERT ANALYSIS:
Grocery is probably the most complex environment to implement any variation of self-checkout. It may be right for some grocers and not for others, or in some locations and not others. This has to be balanced against the reason for implementing. The biggest factors for the grocer are their desired customer service model, their product mix and their customer demographic.
The main reason that self-checkout is implemented is to reduce labor costs. Implemented properly, self-checkout will reduce in-store labor costs on the front end. The second reason self-checkout is implemented is to improve total customer throughput for a store while maintaining labor costs.
Ken Morris, Principal at Boston Retail Partners
For most grocers, self-checkout is simply one of the devices in which the customer engages and checks out. Some customers like myself won’t even visit a grocer without the technology because self-checkout at most times brings a known transaction time which to me is a key factor in my choice of store. But others are trying to differentiate in other ways.
The big mistake people make with self-checkout is just dropping it in and expecting customers to adapt. You must incentivize the cashiers to recruit consumers to use the device. The smart retailers have self-checkout for the express lane items and then leave the staffed lanes for larger orders.
Greg Buzek President - IHL Group
The use of self-checkouts remains viable, but the decision to install depends heavily on the location, size and customer acceptance of individual stores. Shoppers appear to be adapting to self-checkout and as the process becomes more consumer friendly, the usage and corresponding ROI for the retailer should continue to increase.
Mark Heckman, President, Heckman Consulting
Large Tier 1 retailers have invested in self-checkout so heavily and for so long. Because self-checkout enables customers with smaller baskets to escape the queues at a full service checkout, most retailers will report improved Voice of Customer scores on “Satisfaction with Checkout Wait Time,” which helps to improve the overall Net Promoter Score (NPS) for the retailer. Many retailers can quantify changes to their NPS, and even a fractional improvement can mean significant improvement in the number and frequency of customer visits and top line sales growth. Self-checkout is recognized as a strategic weapon in grocery retail.
Brian Yates, Director of Systems Engineering & Retail POS / Mobile Solutions, Fujitsu America
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SECTION THREE
