Businesses find that self-checkout lanes distract customers into thinking they spend less time in line while saving the owners money.
By MARK ALBRIGHT
Published June 5, 2004
[Times photo: Stefanie Boyar]
A self-checkout machine at a Tampa Home Depot prints Tina Adams' receipt while 1-year-old twins, Andrew, left, and Garrett, wait. Customers perceive the lines as quicker because they are kept busy.
A new study of self-checkout lanes offers some advice to shoppers: Get used to them.
"Self-checkout is no longer a test," said Lee Holman, vice president of IHL Consulting Group, a Franklin, Tenn., research firm that tracks retail technology. "It will quickly become as ubiquitous in stores as ATMs at banks and pay-at-the-pump gas stations."
If current trends hold up, IHL estimates that self-checkout sales of $42-billion in 2003 will skyrocket eightfold to $336-billion by 2007.
That's quite a change from a decade ago, when Publix Super Markets Inc. pulled the plug on a highly publicized one-store test of self-checkout in West Palm Beach because it didn't save shoppers any time.
Self-checkout still doesn't save anybody time. But IHL says the illusion of speed, reinforced by not standing in line and keeping busy in a do-it-yourself exercise, has become an appealing alternative for many shoppers at grocery stores such as Winn-Dixie and mass merchants such as Wal-Mart.
Home Depot now offers self-checkout in half of its 1,740 stores nationwide and has been prodding customers to learn how it works by opening fewer cashier lines. While grocers say 15 percent of their shoppers use self-checkout if it is available, 30 percent of all transactions go through self-checkout at Home Depots that have it. In some stores, it is as much as 40 percent, according to IHL.
For retailers the numbers are compelling. A rule of thumb in the grocery business is that it takes a $15 transaction to recoup the cost of having a cashier handle the order. At an installation cost of $23,000 a lane, a self-checkout can pay for itself within a year. If the cashier is moved to another job in the store, retailers can say customer service was enhanced and still pocket a big savings. The theft rate (half of all retail theft is perpetrated by employees) is cut in half with automated systems.
While technology companies are already pushing software and the equipment to do it, no retailer is considering ditching cashiers entirely. That's because the overwhelming majority of shoppers expect a human being to handle checkout for them.
Self-checkout is not for all types of stores, either. To prevent shoplifting, scales under the conveyor and laser scanners compare the weight and shape of a product to what the UPC code alerts the computer to expect. If they don't match, the system shuts down and summons an attendant. So, large apparel stores, for instance, are doubtful prospects for self-checkout because the scanner cannot tell a cheap cotton sweater from a chichi cashmere one.
At convenience stores, the average transaction is too small to make automatic checkout pay because the most likely users already are paying at the pump. At Best Buy, the chain would lose an opportunity to push those highly profitable extended warranties.
The next generation of do-it-yourself checkout is the wireless scanner. Those are the handheld wands Home Depot clerks wave at price tags to help shoppers stumped by the nuances of the self-service lane.
A Massachusetts grocery chain and a German supermarket have built wireless scanners into their shopping carts, which allows customers to ring up their purchases as they shop. At the checkout counter, another computer downloads the list of items from the scanner and a cashier accepts payment.
All 106 Albertsons stores in Dallas and Fort Worth are getting wireless shopping cart scanners. Albertsons also acquired and is installing in other markets the self-checkout equipment that Kmart tried nationally a few years ago before filing for Chapter 11 bankruptcy protection.
"We're expanding self-checkout in a big way," said Walt Rubel, an Albertsons spokesman.
There's enough of a self-serve movement that Publix has revived its self-checkout test in 13 stores.
"Actually, where they really need a self-service option is the Publix deli," said Holman, the IHL research analyst who lives in Boca Raton. "They've always got a long, slow line there."
In fact, Publix is testing such a system at 13 stores, including two in Tampa. Hurried deli customers punch their custom-sliced meat and cheese orders into a keypad that tells them when to return to pick up their completed order.
