The Changing Retail Checkout Lane

Worldwide, a variety of approaches are being tried for retail checkout. Many of these approaches are changing how checkout lanes function.

Approaches include facial recognition for payment; scan-and-go with personalized pricing; a smart grocery cart that identifies items as they are placed in the cart; and a smart grocery store with frictionless checkout that allows customers to view and approve their basket.

In addition, one very interesting approach is being tried: the slow checkout lane. Not in a hurry, want to chat with the cashier? No problem, go to the “chat” or “social” checkout lanes.

Video Spotlight:  

This post is based on the Grocery Dive article, Aisles Abroad: How Grocers Overseas Are Innovating Checkout Experiences, by Aislinn Murphy, March 21, 2024; the Delish article, Wegmans’ Futuristic Smart Shopping Carts Are Freaking Out Customers, by Danielle Harling, July 6, 2023; and the YouTube videos in the Spotlight. Image source: adriaticfoto/Shutterstock

Discussion Questions:

1. Are there any issues with facial recognition systems for payments?

Guidance: One of the biggest issues is ensuring that the technology functions correctly. Many people are also raising privacy concerns. Public policy has not caught up with the technology to guide companies on how to use it. Anytime facial recognition is used by an organization, it is advisable to receive permission from customers.

2. What advantages does a frictionless smart system offer over a scan-and-go system?

Guidance: Scan-and-go systems require the customer to scan each item, while smart systems automatically track items.

Scan-and-go systems have experienced unacceptable levels of theft.  Wegman’s grocery store discontinued its scan-and-go system, upsetting many customers who liked the convenience of the system. However, Wegman’s stores are testing a smart cart system to take its place. The hope is that this smart cart system will reduce theft, but still provide benefits of scan and go systems.

3. What benefit does the slow-lane provide?

Guidance: From an operations management perspective, people look at a variety of performance measures, such as time in line, time in system, number in line, number in system, and utilization rates. Looking at traditional waiting line performance measures, a company would never implement slow-lane checkout. However, for certain customers, it just might increase their customer satisfaction with the organization, and build brand loyalty.

4. What do you think of personalized pricing?

Guidance: Answers will vary. Based on the reaction when Wendy’s announced surge pricing, it will probably not be popular. Most organization using this approach are concentrating on offering discounts on a handful of products to specific customers, or offering discounts to any customer using their app.

In the U.S., Sam’s Wholesale Club will have a handful of items that are discounted for customers who use their scan-and-go app.

Major questions include how personalized prices are determined, and whether these prices are set in a fair and reasonable manner.

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May 20, 2024 Newsletter
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