While self-checkout may seem like a no-brainer, not everyone sees these systems as a positive move forward
According to the research company Global Market Insights, the market for self-checkout systems is expected to reach €3.6 billion by 2024.
While self-checkout may seem like a no-brainer – lower labour costs for businesses, more speed and flexibility for consumers – not everyone sees these systems as a positive move forward.
The Cons of Self-Checkout
Frustration: Five words – “Unexpected item in bagging area” – sum up what users hate the most about self-checkouts – their glitchiness. After all, what is the point of using a self-checkout if it is slower and more frustrating than simply having a human help you? The “unexpected item” phrase is so hated that stores have even begun trying to make it sound more pleasant.
In the UK, Morrison’s supermarket hired Wallace and Gromit actor, Ben Whitehead, as its self-checkout voice, while discount chain Poundland opted to use an Elvis impersonator. Stores may be going to these lengths because angry and frustrated customers tend to buy less.
Theft: The constant frustration at the machines may also be contributing to another problem with self-checkouts – increased rates of theft. It is estimated that around 4 per cent of items that pass through the machines are not actually paid for. For supermarkets, which tend to operate with very tight margins, 4 per cent is a very large number.
In fact, self-checkout theft has become so widespread that a whole slang vocabulary has emerged to describe it. Ringing up an expensive item of produce with the code for a cheaper one is a “banana trick”. Peeling the sticker off a cheap item and placing it over the bar code of an expensive item is called “the switcheroo”.
Researchers have also pointed out that self-checkouts allow people who might not otherwise steal to rationalise their behaviour by giving them a sense of anonymity. Frustration also plays into this. After trying to scan an item 5 or 6 times, only to get the annoying “unexpected item” each time, shoppers might decide it is not their job to try too hard. Some customers also argue they are saving the store money by replacing the checkout worker, so they should have some reward.
Fewer workers: Along with rent, salaries are one of the biggest fixed costs for retailers. By switching to self-checkout, stores could in theory cut back on the number of cashiers they use, lowering their costs. Retailers argue that self-checkout has not led to fewer staff numbers, but instead allows them to move staff to the sales floor, where they can help customers. Research shows that this is true, for now, but many suspect that self-checkouts will ultimately eliminate jobs.
Earlier this year, Sainsbury’s trialled a completely checkout-free store, allowing customers to scan their own items using an app and then walk out. This type of technology is becoming more common – several companies are pioneering carts that allow you to scan products as you shop. And this is likely a stepping stone to the completely autonomous store.
Although these are very expensive to develop and have not proved popular with customers, once the technology becomes cheaper it is likely that they will be implemented. BingoBox, in China, already has 500 autonomous stores. And given that retail currently employs huge numbers of people, many argue that the disappearance of jobs in this sector is a crisis in waiting.
The Pros of Self-Checkout
Lower costs for stores: While fewer employees is a definite negative for individuals looking for work, it is an advantage for retailers. Fewer employees mean lower costs and a better chance of competing with online retailers. Self-checkouts may also help stores make better use of their space, replacing one traditional conveyor belt cashier with five or six self-checkout kiosks, creating more room for stock.
Faster checkouts: Self-checkouts help keep cashier lines shorter so that customers can be in and out faster. This is also a big selling point for autonomous stores – the ability to just grab an item and go, without waiting in lines or making small talk.
Great for introverts – and bottom lines: According to some studies, around two-thirds of customers who prefer self-checkouts do so because it saves them from having to interact with store employees. Other studies have illustrated that grocery self-checkout baskets tend to contain more unhealthy food than baskets that pass through a cashier.
Customers may feel that there are less scrutiny and more anonymity in a self-checkout, which may, in turn, make them more likely to add that extra box of cookies or bottle of wine to their shopping. And more food in the basket is better for the stores’ bottom line.
Getting ready for the future: Given the cons of increased expense, theft and negative attitudes from customers, why are stores so eager to switch to self-checkout? The biggest reason may be that self-checkout is not the end of the process of automation in retail checkouts, it is the beginning, and stores do not want to be left behind.
Many analysts believe that self-checkout is just a stepping stone to completely automated retail. However, if autonomous retail is the future, perhaps stores should consider skipping this step and waiting for the real deal.
The Bottom Line
Whether you love them or loathe them, it is likely that self-checkouts are here to stay. The global self-checkout system was valued at $2.5 billion in 2017 and is forecast to see a CAGR of 10.7 per cent between now and 2023. There is also a great deal of growth in ancillary industries, and developments in scanning, software, anti-theft and smart cart technology.
Despite the expense, automated checkout may have another benefit for stores – data collection. In China, Jack Ma Yun’s Yunfeng Capital provides DeepBlue’s Quizmart technology to retailers for free, in exchange for access to the data it collects on customers. This data is could then be used to train large data sets for AI or sold on to marketers. As with the checkouts themselves, whether you see this as a pro or a con may well depend on which side of the checkout you are on.
27th January 2020