Trying an Alternative

 
 
By Evan Schuman  |  Posted 2004-08-06 Email Print this article Print
 
 
 
 
 
 
 


How much consumers want to use self-checkout is an open question. When presented with long lines at the cashier-managed checkout lanes, many customers are willing to try self-checkout as an alternative. But do those customers want self-checkout, or are they willing to try it as an alternative to long lines? Even that question—which is in that gray area between existentialism and "which-came-first: the chicken or the egg?"—gets more blurry the closer its examined. Some retailers admit to deliberately allowing the regular lines to get very long so that shoppers will have an incentive to try the self-checkout. Is that a customer-friendly approach or merely a retailers version of tough love? (Parent to young child: "I know youre really going to like the spinach once youve tried it several times.") Leading self-service vendor NCR even advises retail customers to avoid self-checkout on a handful of the highest-traffic days—dubbed "Exception Days" in NCR parlance—including Dec. 23, Dec. 24, Dec. 31 and the day before Easter.
One industry veteran—Caroline McNally, chief marketing officer at Pay By Touch, a firm that makes biometric authentication devices that work with self-checkout systems—says self-checkout may be more of what consumers want than they realize.
"Consumers are looking for convenience and speed," and the most-disliked part of a grocery visit is the checkout lane, she said. Its up to retailers to take those dislikes and preferences and try to address them with services and technology. "Its beyond a consumers scope to think about what technologies will deliver what they want." Regardless of the original business reason for the move, getting store management and cashier buy-in is crucial. The ROI goal for self-checkout truly is cashier redeployment, invariably to service-oriented parts of the store that cannot be so easily automated. That might start with having cashiers bag customers groceries and walk them to the customers car. Ultimately, this speaks to a pair of business issues that trump plain ROI: differentiation and competitive advantage.
Greg Buzek is president of the IHL Consulting Group and one of the most frequently quoted experts on retail self-service. He sees self-service as a way for grocery retailers to compete with Wal-Mart, which has a roughly 20 percent price advantage. Ironically, a big resistance point about self-service is that its another step toward depersonalizing the shopping experience, right next to automated voicemail systems and gas stations that havent washed a window or checked oil for years. But the self-service systems—when fully deployed—are designed to increase personalized service. Buzek speaks of one chain that is preparing to redeploy cashiers to prepared-foods sections, full-service delis, high-end bakeries and floral areas. "Theyre taking people and having [former cashiers] bag the groceries and take them out to the car for me and hold the cart for me while its raining," he said, adding that this is delivering service that Wal-Mart cannot and that it makes it worth the extra price. "There are a group of consumers that are willing to pay extra for extra service," he said. There are many ways of processing customers out the door—including some positively futuristic shopping carts. Indeed, most retail experts suggest that the smart-cart approach will be the sole checkout approach in as little as five and probably no more than 15 years from now. Until then, though, retailers must make lane-based self-checkout work. For nongrocery retail outlets—such as Home Depot, one of the most aggressive and most intelligent users of self-checkout—self-checkout can be used extensively. For most grocery retailers, though, its limited to only the customers with the smallest baskets. Some Pathmark stores with self-checkout, for example, allow only customers with 15 or fewer items to use it. Still, those smaller purchases represent more than half of all grocery purchases today, according to an IHL Consulting survey. The rationale for the limit is that customers are much slower at scanning items than professional cashiers. If a customer has eight items, its not a big issue, but if the customer has 50 items, it is something the store would rather move to the traditional cashier. At the same time, removing lots of smaller baskets from the cashier lanes reduces the stops and starts required every time a cashier must tender—extract payment from—a customer. To read more about practical and technological hurdles that self-checkout faces, click here. But Symbols Riso said self-checkout should be expanded to try to fix a major retail customer-flow problem. He speaks of the tradition that the stores largest customers (with the largest baskets) wait in the longest and slowest lines, while someone purchasing one can of peas gets whisked through an express lane. "The worst customer gets speeded through and the best waits on line. How stupid is that?" Check out eWEEK.coms Retail Center for the latest news, views and analysis of this vital industry.


 
 
 
 
Evan Schuman is the editor of CIOInsight.com's Retail industry center. He has covered retail technology issues since 1988 for Ziff-Davis, CMP Media, IDG, Penton, Lebhar-Friedman, VNU, BusinessWeek, Business 2.0 and United Press International, among others. He can be reached by e-mail at Evan.Schuman@ziffdavisenterprise.com.
 
 
 
 
 
 
 

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