Reports Differ On Self-Checkout Value

Written by Evan Schuman
October 16th, 2006

A report due out Tuesday from the IHL Consulting Group sees grocers aggressively moving to upgrade to self-checkout systems, even before they replace or upgrade the aging point-of-sale systems they are based on. But another retail technology report?released Monday by the Aberdeen Group?has a very different self-checkout take, calling retail self-checkout “an absolute failure.”

The reports on their own do not directlty contradict each other, in that the IHL report simply says a lot of retailers will move to self-checkout and the Aberdeen report doesn’t dispute the intended purchases, but merely the wisdom of it.

The Aberdeen report author, retail research analyst Sahir Anand, wrote that self-checkout systems have frustrated and angered customers and not helped retailers.

“Self-checkout systems have not significantly improved the customer experience. These systems have met several operational and store navigation roadblocks such as lack of a strong customer interface, inflexible store formats and frustrating self-scan and bag procedures,” the report said. “Customers have never found self check-out convenient or time-saving. As the customers? share of wallet has diverted towards easier and more intuitive web channels, the lackluster performance of self-check out has created further POS challenges for retailers.”

Although Anand said that the systems might be made workable if additional investments were made, he wasn’t hopeful. “I think it’s futile. At the end of the day, it’s a failed system,” he said.

The report also criticized other efforts to shorten lines, such as having store employees manually scan customer’s purchases?with an Infrared PDA device–while the customers are waiting in line. The scans are saved onto a value payment card, which the customer eventually gives to the cashier at the front of the line. Anand says such efforts ultimately do not shorten the customer’s wait.

First, Anand said, the device’s scanning and transmiting and saving is far too slow. “It’s not the technology itself. It’s the upload from the server to the device. It’s too slow,” he said. Secondly, it’s difficult, Anand said, for employees to know where to start scanning. If the customer gets to the head of the line while still being scanned, it’s a big problem.

Greg Buzek, president of IHL and one of the authors of the IHL report, disagreed that self-checkout has failed (“If you don’t believe me, talk to HomeDepot”) and said the isolated problems he has witnessed “comes down to the way retailers deploy it.”

For example, Buzek said, Wal-Mart has removed some of the security functions of self-checkout in some locations, which sharply accelerated scanning and checkout speed. “It’s not the equipment. It’s the way the equipment is deployed,” he said.

The IHL report projected that grocers overall will spend $9.8 billion on IT purchases this year, which is about 5.8 percent more than last year, Buzek said. “Key areas of software spend will include store systems (21 percent), infrastructure (32 percent) and supply-chain management (18 percent),” the report said. “Fifty-four percent are planning new workforce management purchases in the next year and more than 60 percent are planning new kiosk implementations at the store level by June 2007.”

Although the Aberdeen report was pessimistic about self-checkout, it was quite enthusiastic about contactless credit card payments, pointing to efforts by CVS, McDonalds, 7-Eleven, AMC theatres, Duane Reade, Walgreens, Arby?s, Carl?s Jr., Cold Stone Creamery, Kentucky Fried Chicken, Regal Entertainment Group and Sheetz convenience stores.

“Frustrating lane formations during the lunch hour would also get shorter and so would the lanes at a general merchandise store or coffee shop. Depending upon the quantity of purchase, the transaction time can be reduced from an average of one to four minutes to little more than a minute or less,” the report said.


9 Comments | Read Reports Differ On Self-Checkout Value

  1. Drew Crecente Says:

    (Putting on my consumer hat)

    Part of my retail decision is based on choosing stores offering self-checkout over those that do not.

    1) My experience is that it *is* speedier. Granted that there is a learning curve but it is neither steep nor long.

    2) Rather than having to endure small-talk or worse a surly cashier I will always choose self-checkout when it’s presented as an option.

    (putting on my IT consultant hat)

    The report by the Aberdeen Group appears to have forgotten the most important aspect of the equation. Customer experience.

    As self-checkout evolves from serving early adopters to tech-savvy Generation Y, the wisdom behind the migration will become more obvious.

    Look at who is currently using self-checkout and you’ll recognize the demographic and that it is growing.

    – Drew

  2. B. Titus Says:

    I think Mr. Anand must be reporting from a personal perspective. How could a system that replaces 4-6 clerks and, at times, an equal # of baggers, as well as associated managerial support, with just one associate (4-9 times LESS staff) be considered a failure? While it is true that the scanning interface generally needs improvement and some weight sensing/ timing mechanisms are too highly oriented towards security, the overall cost efficiencies inherent in the application must outweigh these relatively minor issues which I’m sure will be resolved as experience indicates. ‘At the end of the day’, these systems will be as common as ATMs…hey wait a minute, they ARE ATM’s…

  3. D. Garcia Says:

    Based on my experiences as a consumer, self checkout is most definitely here to stay. Early adopters and the younger generation will demand this service. Short of a completely integrate RFID system, wherein I load my cart and walk out of the store, scanning my credit card as I do; self checkout will continue to grow serving the needs primarily of smaller volume transactions. See gas stations for example, I haven’t spoken to an attendant in years!!

  4. Donald Bunch Says:

    I have a choice in Atlanta between Publix and Kroger as the dominant grocery store chains. 95% of the time I choose Kroger because they all offer self check-out and Publix does not offer that option.

  5. mickey Says:

    I do not like self check out at all. I was in a home depoit in NYC and it was a joke trying to check yourself out and hang on to all the products. The help in the store just stood around. I will avoid them.

  6. Chase Says:

    The failure is in the customer service. I’ve worked in retail for most of my life, including managing the POS systems for a major retailer. I’m a Gen-Xer who prefers to do just about anything online that I can, and spend 12+ hours a day using technology with no problem. And I have difficulty operating the self-checkout! If the “self” checkout area requires supervision by an employee to void items, assist in scanning, etc. for a dozen helpless customers, is this really saving anything?

    I’ve tried the self-checkout at several different retailers hoping that experience would make me better at it and eventually save me time – each time has been the same frustration, all while an automated voice shouts at me, “Remove unauthorized item in bagging area!”

    Not to mention that after a lifetime in this industry, the last thing I want to do on my personal time is work as a cashier (especially as free labor for the store…at least pay me minimum wage for my time).

    Thanks for the thought, but I’ll wait in line for the indifferent-but-slightly-more-competent cashier to ring me up. And please do not force me against my will to use this technology by removing all but one “human” cashier and making the line prohibitive. I will take my business to a less “innovative” retailer who still supplies a human being to answer questions and maybe even (very occasionally) thank me.

  7. jerry Says:

    It’s true that today’s self-check technology is sometimes frustrating, and only faster today for small orders. But if it is a failure, then why are there always lines waiting to use them? People want some control of their purchase experience. They want to be sure they got the sale price and that the product they scanned is what they really wanted. The regular checkers scan much too fast for that control to take place, forcing the consumer to stand at the door and read their receipt for this verification(I see this all the time). ATMs, self service Kiosks, and Airport Ticket dispensers were frowned upon when they first appeared. Have they gone away? No, there are lines at all of them. Many of the complaints I have about the self-check experience, such as Home Depot and Wally World, revolve around the attitude of the person overseeing the units. This must be the BEST Customer Service person in the store. Self-Service is definitely evolving, but it is here to stay.

  8. Marty Ackerman Says:

    I agree that the self check system is doomed without MASSIVE adjustments to the customer interface. As a tech-savvy shopper, I tried my darndest to train myself to use the self-check at Nob Hill supermarket (Raley’s). Unfortunately, in six attmepts, only one was painless; two were difficult because the system was not user friendly, and did not allow me to “back up” or correct an error; two were problematic because their bagging/scale system didn’t seem to think I’d purchased what I said I did; during one attempt I mis-identified the type of tomato I purchased and an extremely rude “customer service” rep chastized me. The result? I stand in line at the check stand, as well as shopping less at Nob Hill (largely due to the rude guy). Other customers must have come to the same conclusion, because I routinely see fewer than 2 users at their 8-10 self check stations.

  9. Jeff Loman Says:

    Regarding article on “failed” self-check out:
    To compare Home Depot and grocery self checkout is like comparing hammers to oranges.
    The average # of items at a Home Depot purchase is always under 10, whereas the # of items in a full grocery cart is maybe 50.

    It’s the skill level of the scanner. Grocery clerks do this for a living and zip thru orders. As a novice scanner, I’ll put up with being slow for a few items, but not a full cart. At that point, it becomes a joke(with failed scans, problems with system, etc, etc.) And stores must staff self scanning areas anyway.
    Verdict: Nice thought, but not happening.

    Maybe putting one’s cart in a queue, scanning their credit card for payment, then going to their car and pulling up to pickup point where groceries are already bagged and ready for loading would help the process.


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