Self-Checkout: Final Edition

Putting an end to the debate once and for all.

Unless you've been on another planet, you've seen a lot of media coverage about self-checkouts ever since the news broke about Albertsons LLC's and Big Y's decisions to eliminate the technology from their stores.

Much of the news, however, was negative, and questioned the value of self-checkouts in terms of the shopper's overall in-store experience. In fact, some stories hinted that self-checkouts reduce a retailer's overall service levels.

Self-checkouts were getting a bad rap, and I felt that they didn't deserve it. After all, as I've recently discussed in these pages and in my PG Tech e-newsletter, a great deal of the success of a self-checkout operation depends on how well it's operated, and in my view, many retailers just don't invest the time and effort needed to keep these machines humming.

For example, during a front end technology roundtable I moderated a few years ago, a retailer participant raised a subject that made me cringe. Specifically, the retailer began lamenting about several problems he was having with his self-checkout unit. When the roundtable ended, and we moved into another room to do a walk-through of the same front end unit that was installed in his company's stores, the grocery executive learned that every problem he was encountering with his self-checkout was self-inflicted, as he neglected to deploy several software updates.

Lesson learned.

I'm also a believer that self-checkouts, when operated correctly, can be an enhancement to a retailer's overall level of service.

With this in mind, we take a closer look at this continuing controversial topic in this issue's PG Tech main story, which examines the cases for and against self-checkout, and shows how one innovative grocer has developed such a strong self-checkout operation that more than 40 percent of his store's transactions are conducted through them.

Speaking of innovative retailers, we're also looking to honor the industry's top tech implementations with our first-ever Tech Innovation Awards program, which honors four food retailers for an outstanding technology implementation in the categories of In-Store Systems, Enterprise/Marketing Technology, Supply Chain and Online/ Mobile Technology.

Winning retailers will be honored at the Progressive Grocer booth during the NRF Convention & Expo, Jan. 15-18, 2012, at the Jacob K. Javits Convention Center in New York.

To nominate a retailer for its innovative implementation, visit the awards page on our website by clicking the Resources tab at www.progressivegrocer.com.

Self-Study

Retailers and vendors weigh in on the pros and cons of self-checkouts.

Recent media reports that Albertsons LLC and Big Y have removed self-checkouts from their stores have led to much discussion and debate about the value of self-checkout technology in terms of customer service. Essentially, both retailers said they were ditching the technology in an effort to enhance customer service, thereby creating an improved shopping experience.

Dozens of news stories — both in the trade and mainstream media — questioned whether self-checkout technology had run its course, with retailers lining up both for and against the technology. It resembled a selling frenzy on Wall Street: Once it started, everyone forgot reason and just followed suit. Few realized that Albert-sons had actually begun removing its self-checkouts three years ago, and was down to its final 20 when a blogger picked it up and labeled it a trend, according to Albertsons spokeswoman Christine Wilcox.

Interestingly, at the same time these announcements were made, a survey released by Empathica Inc., a Mississauga, Ontario-based provider of customer experience management solutions, reported that self-checkout systems are highly favored by shoppers, based on a survey it fielded asking consumers to rate which technologies they value most in their grocery experience, and how their expectations are being met by grocery stores across the United States and Canada.

Empathica's survey, interestingly enough, said that self-checkouts ranked as the No. 1 technology that enhances consumers' overall shopping experience.

Go figure.

So now what?

Like any technology, self-checkout systems aren't meant to be an end in and of themselves. There are some situations for which they're ideal, and others for which they're not. Of course, how they're deployed and how they fit in with a retailer's overall strategy are just as important as the technology itself.

It's also important to consider that self-checkouts are a relatively new technology, and over time, some retailers may find that they don't fit in with their overall operating strategy, while others will devote even more resources and front end floor space to further refining and perfecting their existing platforms.

The Case Against

Springfield, Mass.-based Big Y,

which installed its self-checkouts in 2003, determined that the technology couldn't improve on or replace a cashier able to provide personal assistance to each customer in her lane. In addition, Big Y pointed out that self-checkout lines occasionally get bogged down when customers need assistance with products that require age verification, or when shoppers have trouble scanning bar codes and coupons, as well as other issues that arise during transactions.

“Our self-checkout technology could not deliver on the service needs of our customers,” explains Michael A. Tami, VP for information resources and technologies at Big Y, which operates 61 stores in Connecticut and Massachusetts. “In short, we were not able to provide the exceptional customer service through them that has made Big Y what it is today. While other chains are opting to replace cashiers with more self-checkouts, we are adding cashiers to service more standard lanes.”

Jeffrey Hamel, manager of a Big Y supermarket, said in an interview with American Public Media's Marketplace Morning Report that customers who opt to use the self-checkout machines often have questions or problems that require a cashier's attention — basically negating their purpose. He added that theft was an issue and that the units required tremendous maintenance.

Boise, Idaho-based Albertsons LLC, like Big Y, says the primary reason for removing its self-checkout units is to provide more “face time” between its staff and shoppers. “If you have a chance to talk with someone before you leave a store, odds are they will let us know if we met their expectations, if there were items they were looking for but couldn't find, rather than not saying anything,” says Wilcox. “We want shoppers to tell us what's not working so we can fix it. We want to know how we can better service them, and that interaction between shoppers and our associates, while they are in the store, is key to making that happen. While we do have other channels of communication, such as Facebook, Twitter and our website, the fastest way to resolve something or make a shopper's experience a better one is at the moment that they're shopping.”

Some experts say that removing self-checkouts, especially when they've been in operation for years, can be dangerous because it eliminates a choice for customers. “While some shoppers may not use the self-checkout every trip, they like having the option to use it when they want,” says Chad Eilers, VP of design engineering for fixture and self-checkout vendor Pan-Oston in Bowling Green, Ky. “In addition, many self-checkout users see the technology as an addition in service, not a reduction of service, as they often avoid long checkout lines by using them.”

Indeed, independent grocer Crest Foods, based in Edmond, Okla., noticed a reduction in the size of the lines at its checkouts immediately after installing self-checkout units. “The results were unbelievable,” says Jim Eilers, controller. “Within an hour, we could see the impact it was having on the regular checkstands. No lines. No waiting.”

The Case For

Newport Avenue Market, an upscale supermarket in Bend, Ore., is well known for delivering excellent customer service. As such, owner Rudy Dory was initially reluctant to install a self-checkout system. He feared he might be going against his store's roots, and that shoppers might agree. “I thought my shoppers would view it as a reduction in service levels,” he recalls.

He ultimately decided it was a competitive necessity, since most of the retailers in his trade area already had such systems.

To his surprise, Dory saw customer acceptance and usage take off immediately, and they haven't slowed down since. In fact, 40 percent of Newport's transactions are now processed through self-checkout units.

“When we committed to self-checkout, it essentially gave us two more checkstands — we went from six units to eight,” Dory notes.

One unique aspect of Newport's self-checkout operation is its configuration. The store now has four manned registers and four self-checkouts, which are located right in the middle of the manned checkouts. There are two manned checkouts on each side of the self-checkout units, and the cashiers are easily visible from the self-checkouts. Dory feels that this has contributed to the high usage rates of the units, as they are more likely to use them if they know that help is within arm's reach.

While Newport's self-checkouts are prone to the occasional bugs and crashes, like any other technology, Dory stays on top of their maintenance to keep such occurrences to a minimum.

A Commitment

Many of the gripes retailers have about self-checkout stem from problems that are often self-inflicted, such as neglecting maintenance and upgrades, or not calibrating the scales. As a customer-facing technology, self-checkouts experience much more wear and tear than traditional checkouts. And since each unit performs a variety of functions — functions that are usually spread across several devices at a manned checkout — regular updates are critical. “You have to manage them properly,” says Rick Chavic, VP retail markets at Duluth, Ga.-based NCR. “If you are going to run a successful self-checkout operation, it's a commitment. You have to regularly maintain them, upgrade the software and make sure all of the interfaces are correct.”

What it comes down to is that it's not really a matter of technology, but rather how that technology is operated. There are no half-measures when it comes to successful self-checkout. So it's important for retailers to decide whether self-checkout really suits their overall business and brand, and if it does, they must make a commitment in terms of its upkeep to reap the benefits.

The technology may be self-service for your shoppers, but to run smoothly, it requires some assistance. PG

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