advertisement
advertisement

This is page 2 of:

Self-Checkout Killing Impulse Items

July 25th, 2006

That’s just when the consumer is choosing the lane and it gets worse as the customer has to manually scan items during time when they would otherwise have had little to do. “You don’t have any time to peruse or browse,” Rosenblum said.

“The folks that make these impulse items have to be aware of these things,” Buzek said. “For instance, on average, consumers will buy breath mints or chewing gum about 20 percent of their shopping trips when going through a standard checkout, but when going through self-checkout, it drops to about 11.4 percent. That’s about a 43 percent drop. The biggest drop is in chips and salty snacks dropped 53 percent and soda and water, which dropped 50 percent.”

The IHL study—which was based on interviews with 533 geographically-distributed consumers—also found gender differences, with the impulse-buying drop for men coming in at 27.9 percent while it was a whopping 50 percent for women.

Another example: in a comparison of how consumers dealt with do-it-yourself purchases in 2005 compared with 2004, IHL found that the percentage that used Home Depot dropped from 87 percent to 80 percent while the percent that dealt with Lowe’s increased from 50 percent to 60 percent.

Buzek’s explanation: “Some 85 percent of home improvement purchases are made by women. Lowe’s is more appealing to women. People are getting more and more disenchanted with Home Depot.”

Buzek dubbed the trend the self-checkout diet after the report calculated that a typical checkout impulse purchase gave the consumer about 7,200 extra calories. “On average, we believe that self-checkout will save somebody two-and-a-half-pounds a year,” he said.

Buzek applauded a few retailers—including Meijer and Kroger—for having changed their approaches to self-checkout impulse items, moving away from magazines and candy to more aromatic and marginally healthier offerings such as hot chicken and bread. “By offering items such as rotisserie chickens and fresh baked breads, they are relying more on the sense of smell to drive sales rather than simply visuals when consumers are trapped in a staffed lane,” Buzek said. “Manufacturers such as Hershey’s, Wrigley’s or Pepsico need to adapt display technologies to leverage these new self-checkout lanes or face a drop in sales.”

In a Web audio discussion on this self-checkout trend late last week, Mark Rasch, a senior VP for security consultant Solutionary, said this trend will likely force retailers to re-examine slotting fees and other fees they charge manufacturers for product placement. “Retailers will have to change their behaviors as well,” Rasch said.

Some other self-checkout conclusions from the IHL report include a 35 percent overall increase (from 2005 compared with 2004) in consumer self-checkout spending to $110.9 billion and that 18 percent if self-checkout users use self-checkout “all the time” when it is available. This is line with industry projections that self-checkout is likely to be worth $1.2 trillion by 2009.

Almost one-third (29 percent) of consumers will only use self-checkout when there is a long line of customers at a traditional staffed lane, the report said, adding that the average number of items in a self-checkout transaction is 6.7, and the average self-checkout transaction is $32.85.

One big concern for retailers is the employee intervention issue. It’s been long known that interventions—such as when store employees have to check ages for cigarette or alcohol purchases or when the system glitches—are a major point of consumer displeasure with self-checkout systems. The IHL study reported that consumers felt they were subjected to such interventions about 33 percent of the time.

This has been behind some emotional consumer-self-checkout machine encounters, such as in April, when a Texas man was arrested for punching out a Wal-Mart self-checkout system. That required a non-traditional intervention, by police.


advertisement

Comments are closed.

Newsletters

StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!
advertisement

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

StorefrontBacktalk
Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.