The most valuable technology-based power a business could hope for is one that would inspire its customers to willingly perform tasks that were previously done by its employees. Although many consumer-facing businesses have been able to accomplish just that, retailing in general, and supermarkets in particular, lag behind.
A few business sectors have been transformed by transferring labor from employees to customers, even though they remain location based (their customers must come to them.) The banking industry’s success with ATMs is the best example of that.
Additionally, self-serve fuel purchases are on the rise everywhere but in New Jersey and Oregon, where they’re still against the law. Many libraries have patron-operated book-checkout abilities. The U.S. Postal Service makes wide use of customer-operated machines that allow patrons to mail parcels, insure them or buy postage without interacting with a clerk.
Other business sectors, like travel agents and bookstores, have been transformed by the Internet to the point that traditional walk-in stores are scarcely required.
Despite these successes, most retailers have been conspicuously unable to transfer much labor to their customers. To be sure, many broadline retailers and even food retailers have e-commerce web sites that allow their customers to select product, pay for it remotely and have it delivered. But the vast majority of consumers still go to retail stores to select products and pay for them in a service checkout setting.
But it’s not as if retailers haven’t tried to put their shoppers to work. Large numbers of customer-operated checkout lanes have been installed in many discounters, hardware, drug stores and supermarkets. By some estimates, the number of machines now in use exceeds 130,000.
That investment in self-checkout equipment appears to be completely rational, especially for high-labor supermarkets. After all, from the retailer’s perspective, the case for customer-operated checkouts would appear unassailable: They reduce front-end store labor, and several machines can be installed in the space consumed by a single cashier-operated checkout lane.
Moreover, in a perfect world they’re a great time-saver, the very reason bank patrons have come to prefer ATMs over teller windows. But self-checkout machines confer no benefit to either retailers or their shoppers if shoppers won’t use them. And the usage rate remains low, especially at supermarkets — so low that chains like Boise, ID-based Albertson’s, and Big Y Foods, in Springfield, MA,which together comprise about 285 full-line stores, have taken most of them out.
Kroger, the nation’s largest conventional supermarket chain, and other major retailers are currently trying to determine the optimal number of self-checkouts to put in their stores.
There are several reasons consumers tend to eschew self checkouts. Most are rooted in the fact that supermarket shopping baskets tend to be large. That increases the probability that a scanning problem may manifest during any given checkout session.
Beyond that, supermarket orders are complex: Frequent-shopper cards must be scanned, coupons must be scanned, produce lookup codes must be understood by customers and correctly entered, and payment must be made.
Moreover, self-checkout lacks the capacity to accept dual tender: Allowing consumers to pay part of the tab with cash and the balance with credit. In some areas, consumers find the checkouts can’t grant them credit for bringing their own shopping bags, nor can the checkouts read the scrip issued by container-deposit-redemption machines.
Psychological challenges are also posed by self checkouts: Many customers, particularly elderly ones, are reluctant to give the checkouts so much as a trial because of a sort of stage fright — the fear of looking stupid and attracting attention to themselves, or of delaying and annoying customers in back of them with their ineptitude. Also, some shoppers enjoy interacting with cashiers and miss that human element of the shopping experience.
The frequency of problems such as these makes customers suspect that they don’t really save much time by using the self-checkout lanes, which robs self-checkouts of their chief advantage. Customers are right to suspect that self-checkouts may cost time. A large order generally is far more quickly tallied by a checkout clerk than by a customer.
And, from retailers’ viewpoint, the promise of front-end labor savings may be a false one if attendants must be constantly dispatched to the self-checkout area to assist shoppers.
Along with all these factors, a legal challenge has arisen in California. That state has a new law prohibiting the use of only customer-operated checkouts in stores that sell alcohol. The law was union backed and is clearly aimed at Fresh & Easy, the only chain in the nation that uses only self-checkout lanes. The chain is still contemplating how to conform to the new law.
In sum, the advantages to self-checkout proffered to both customers and retailers tend to fade in the real world.
There are a few actions supermarkets might take to encourage the use of self checkouts, although some of them erode the advantages they could give retailers: More space could be used around the machines to make it easier to deal with large orders. Attendants eager to demonstrate ease of use should be present.
Perhaps most promising would be to offer a financial incentive to customers who use the machines. That might be a percentage off every order, or issuance of an in-store coupon to be used during the next shopping trip. There’s already proof that even a tiny incentive can influence customer behavior: In many places, supermarkets have reduced the usage rate of bags by offering as little as two cents off an order for each shopping bag the customer brings to the store.
In the end, it should probably be acknowledged that at the current time, supermarkets can expect no more out of self-checkout than as a form of express purchasing. They should perhaps be confined to use in, say, 10-items-or-fewer lanes. Complex transactions will require cashiers until a technological breakthrough makes self-checkout more attractive to shoppers.
Meanwhile, there’s the possibility that the entire issue of self checkouts will be rendered moot by nascent technology.
Supermarket chains Stop & Shop and Giant, both units of Ahold, issue hand-held devices to interested shoppers allowing them to scan as they fill their baskets. Fresh & Easy is experimenting with such a system too.
Beyond that, many high-end smart phones and other mobiles are fully capable of scanning items, creating a market-basket tally and processing a credit-card transaction. Indeed, the Ahold chains are soon to add apps to allow shoppers’ own mobiles to substitute for the hand-helds.
With all scan-as-you-shop schemes, the biggest sticking point is the development of a speedy means to verify that shoppers have accurately paid before they leave the store.
Finally, it’s also possible that RFID tags could be further developed. RFID tags can be attached to individual supermarket products, much as they are now attached to shipping cases and apparel to facilitate inventory tracking. The tags work by emitting a unique product identifier. This could make it possible for an order of any number of items to be instantly checked out. The chief drawback to their use in the low-margin supermarket retail context is tags’ prohibitively high unit cost.