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Wal-Mart Boosts Self-Checkout, But Its Claimed Cost Savings Don’t Add Up

March 7th, 2012

A Reuters story said Holley pledged that the chain “will not eliminate cashiers.” Potentially, the argument goes, they could be redeployed elsewhere in the store. That would only happen, though, if self-checkout was siphoning off enough traffic that a staffed lane could be shut down.

Redeployed talent is certainly efficient and helpful. But it doesn’t mesh with the $12-million one-second savings line, because Wal-Mart would still be paying those salaries. (It was the promise to not use self-checkout to fuel layoffs that pretty much kills the association.)

When the CFO moved from the slide language—that this is what a second of cashier salary costs Wal-Mart—to his phrasing that this amounts to those same dollars in savings, is when things got dicey.

Again, this doesn’t mean that self-checkout is not a great investment. If those redeployed associates are going to be helping customers and doing other high-impact functions, that could be a huge help. It could boost revenue and improve the experience, without—as suggested—reducing the payroll by $12 million. And that was only if it saved just a second.

Further nitpicks: Did the CFO calculate the other costs of self-checkout? Such as sharp reductions in that lane’s impulse item revenue? Or the perceived reduction in customer service that has pushed other chains to ditch self-checkout? Potentially increased theft? The infamous legal complications unique to self-checkout? And even the periodic emotional breakdowns of Wal-Mart shoppers who freak out over self-checkout? One Finnish chain is even arguing that slower staffed lanes can boost revenue.

One of the trends in self-checkout is that it tends to be very community-oriented. Some places have shoppers who crave the cashier interactions while in other areas shoppers dread such interactions, which explains why “improving customer service” is used as an argument both for and against self-checkout.

Granted, those interactions are two-way. Is the explanation behind the interaction opposers that the customers want to just get the shopping done and get out—think a rushed businessperson or college student—or is it that the cashiers are grouchy?

To be fair, it’s not usually as much a community issue as it is an expectation issue. The same shopper who might love a self-checkout lane at the local Wal-Mart or Kroger might find it the height of horribleness if discovered at Trader Joe’s, Nordstrom or Whole Foods.


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