Self-Checkout Grows Up (and Sometimes Phases Out)

As the cost of labor skyrockets (especially in California) and the size of the qualified talent pool shrinks for MULO (multi-location) brands, retailers and restaurants are looking for ways to automate and streamline all aspects of their operations. Self-checkout was introduced in the 1980s but didn’t take off and proliferate until 2001. Since their mass roll-out, they have (like ATMs in banks) met with mixed consumer reviews.

Now, 20+ years later, MULO brands are examining their use of self-checkout and figuring out where and how to utilize it in their stores.

• Dollar General has eliminated self-checkout in close to 10,000 stores and is limiting its use in others. The company cites theft as one reason for its decision.
• Walmart has made a state-by-state decision about its use of self-checkout. Although they believe that a more human touch will enhance customer experience, they also believe that eliminating self-checkout will cut back on crime.
• Grocery companies like Costco and Wegmans believe that customer confusion and deliberate “customer gaming” impact losses. Do you know the difference between apple varieties, or are you purposely selecting the cheapest kind rather than the exotic organic ones? We don’t judge. We’re merely stating the types of scamming that can significantly impact store profits and inventory management when thousands of shoppers figure out the trick and get away with it. The industry refers to these losses as “shrink.”
• Target proclaims, “We’re always listening to our guests so we can deliver a joyful and convenient shopping experience.” Part of this “joy” entails Express Self-Checkout limited to 10 or fewer items. Managers will also be able to add more human-powered lanes and adjust hours for self-checkout based on their individual store data and customer behaviors.
• Amazon’s “Just Walk Out” technology and Amazon One palm recognition system have received mixed reviews.

The reality is that consumers will probably never agree on the level of automation and people-free service they want in their lives and shopping/dining experiences.

Again, going back to the previous example of ATMs (introduced in the 1970s), we see that only 40 percent of people are frequent users of cash machines. But that may be partly because of the phase-out of cash and the surge in mobile banking.

Self-checkout use is on the rise, especially among a younger demographic.

We believe that MULO retailers and restaurants will:

• Use AI-powered behavior monitoring and data analytics to figure out how and where self-checkout belongs in their ecosystems;
• Work with partners to improve security systems so they can bust those apple-stealing shoppers and other self-checkout scammers;
• Figure out a human/machine combination to provide the right number of devices and the proper level of assistance for tech-challenged consumers.

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