Demerits of Self-Checkout Devices September 2013
Demerits of Self-Checkout Devices Retail is a matured industry with cut-throat competition. To remain profitable, retailers need to look for ways to reduce operational cost. Self-checkout devices not only help in reducing operational cost but also aim to reduce consumer’s waiting time during checkouts and make shopping more convenient for them. Automated self-checkout devices were first used in the retail industry in late 1990s. Since then, the technology has evolved tremendously, with the current devices becoming much more capable and user-friendly. However, the self-checkout devices are not without their share of demerits, more of which are non-technical or associated with shopper’s behavior.
Demerits of self-checkout devices Fear of looking stupid leads to low self-confidence amongst shoppers Consumers fear a little when using new technology as they think if they do not know how to use the technology or if they cannot use it properly, they may look stupid. This leads to low confidence amongst them Consumers also get very self-conscious of using self-checkout device, which may impact the shopping pleasure and they may not like using it at all Some consumers may feel uncomfortable using self-checkout device in front of others who are adept at using it. Such shoppers generally hesitate to use the self-checkout device and prefer the traditional checkouts
Unmanned tills may result in loss for retailers Self-checkout is also resulting in cheating at many retailers as they are poorly supervised. Items that do not have barcodes (like grocery) are most easy to steal Many shoppers may not pay for a product and will simply bag it. In some cases, they will pay less as they will scan for the lower-priced item and take the higher-priced item with them A survey of 4,952 shoppers done by website watchmywallet.co.uk revealed that “almost a third have admitted to stealing while putting items through the scanners, with many tricking the machines by giving the wrong information”
Price discrepancy, age prohibited items and cash payment cause delay Sometimes the price of a product is not scanned as advertised or the wrong price may get reflected due to some wrong entries. Price mismatch (a discounted item at higher price, price of wrong SKU) needs human help and cannot be rectified on its own Age prohibited items (like alcohol) needs assistance from a store associate that checks the identification of the buyer, which cannot be automated or checked by a machine Payment using cash is another area, which causes delay in case of self-checkout devices “I have used them, I always use my own bags, and I have nearly always needed assistance due to something not working correctly.” - Aaron Jones, Worcester (a shopper)
Demerits of Self Checkout Devices
Technical problems with the device A product not getting scanned / jamming of the scanner is the most common technical snag in a retail outlet Sometimes the device does not recognize the barcode of the product and requires either entering it manually or leaving behind that product, which may lead to negative sentiment amongst the shoppers about the retailer This technological hurdle may also encourage shoplifting as shoppers may just bag the product if it is not getting scanned Sometimes the self-checkout device may malfunction or get locked. In such cases, a shopper may have to scan the entire shopping cart again, which creates problems for both retailers and consumers
Case examples of retailers opting out of self-checkout devices Many retailers have noticed above demerits with their self-checkout devices, which resulted in losses for them and dissatisfaction for their consumers. However, as they understand self-service checkout is touted as the future of retail, many retailers are in the process of making self-checkout devices more robust and better. A few are not convinced and have opted out of the self-checkout devices. Few of them are:
In August 2012, IKEA (a furniture retailer) announced opting out of the self-checkout devices in the US as they were not ‘efficient’ "On peak days, we were finding that we ended up staffing them anyways with a co-worker per checkout lane. If you end up doing that, what's the purpose of having it (self checkout system)?” - Joseph Roth, Spokesperson, IKEA
Source: Secondary Research
Demerits of Self Checkout Devices
Big Y is a regional retailer operating retail stores in Connecticut and Massachusetts in the US In September 2011, it announced phasing out of the self-service lane from its stores Reason cited was, “delays in its self-service lines caused by customer confusion over coupons, payments and other problems; intentional and accidental theft, including misidentifying produce and baked goods as lessexpensive varieties”
In July 2011, Albertsons (operates grocery chain) announced removing all the self-checkout lanes from its 217 stores as it fears customers are not getting enough human interaction “We just want the opportunity to talk to customers more. That’s the driving motivation.” – Representative, Albertsons
Some Point of Views
“We were one of the last chains to get into the selfcheckout game. We were really dragging our feet.”
- Claire D’Amour-Daley, VP - Corporate Communications, Big Y
"We'd never get completely rid of manned tills. For us it's all about offering people the choice. Self-service checkouts are very popular with the customers who use them a lot, but we realise people either like them or they don't."
“We are removing all of the self-checkout lanes, but there isn’t a standard configuration that we’re replacing them with.”
“It may work with home improvement or grocery stores, but it’s a little more complicated when you have a flatbed cart with lots of boxes in it.”
- Christine Wilcox, Director of Communications, Albertsons LLC
- Joseph Roth, Spokesman, IKEA
"It's like the machine is very publicly saying 'you are too stupid to do this - go home now'. It's far from ideal."
- Bjorn Weber, Retail Analyst, Planet Retail
- Sheridan Orr, Consultant, Interrobang Agency
- Spokeswoman, Sainsbury's
"I don't have any doubt that they're (self checkout devices) going to become more prevalent. Face it, that's going to be a real benefit for (retailers), but none of this is going to benefit them if they can't get consumers to use them.” - Michael Capella, Assistant Professor of marketing, Villanova School of Business
"It’s more about customer preference. We’ve made dramatic improvements in the technology over the years but there’s always going to be the folks who want that traditional interaction at the end.”
- Greg Egan, VP - Rretail solutions, NCR
Source: All data from secondary sources; Sutherland analysis
Demerits of Self Checkout Devices
"When self-checkout is done well, customers love it. However, when it is clunky and confusing, the customer is left to think, 'I have to work this hard to give you my money?'"
“Our multiple checkout options give us a unique advantage to provide our customers with the quick, easy and convenient checkout experience they tell us they want.”
- Jeff McAllister, Senior VP – Innovation, Walmart U.S.