The Demise of Self-Checkout?

Self-checkout has been an ongoing approach by retailers to reduce the need for cashiers and lower costs. However, many retailers are reevaluating their use of self-checkout.

Five Below has reduced the use of self-checkout, especially at stores that have higher “shrink.”  Shrink is a term used to describe “theft and other inventory loss.”  Dollar General is removing self-checkout at 300 stores with the highest shrink.

Target is also making changes to self-checkout in response to high shrink. Self-checkout lanes have changed into express lanes with 10-item-or-less restrictions. The company is also shutting down self-checkout lanes during high-theft times.

This policy may actually help customers. Initial reactions from customers have been mixed, but Target projects checkout times will be cut in half with the new self-checkout policy, which will help customers with smaller orders.

Several Walmart stores have also changed their self-checkout policy. In some cases, only Walmart Plus members and delivery drivers can use self-checkout. This policy also has drawn complaints from many customers.

Not all is gloom and doom with self-checkout. Sam’s Wholesale Club is reporting that 1 in 3 customers are using the Scan and Go system that allows customers to scan an item into their phone app and pay online. Customers can then bypass the cashier.

Aldi’s is implementing its automated checkout system, Aldi Go. It was installed first in a Chicago store. Aldi Go uses a combination of a mobile app, sensors, vision systems, and artificial intelligence to track what customers have selected from the shelf. When they leave the store, they complete their transaction at a kiosk without the need to scan the items. This system is similar to Amazon’s Just Walk Out.

Video Spotlight:  

This post is based on the Yahoo article, Target’s New Self-Checkout Policy Is in Effect and It May Impact Your Shopping Experience, by Sophie Caldwell, March 18, 2024; the Fox Business article, Five Below Fights Back on Theft by Reducing Self-Checkout, by Aislinn Murphy, March 21, 2024; The Sun article, OVER IT ‘Worse Than Walmart,’ Fumes Target Shopper After Major Self-Checkout Problem Leaves Them Asking ‘What’s the Point?’, by Isabelle Hajek, March 17, 2024; the Grocery Dive article, 1 In 3 Sam’s Club Members Use Scan-And-Go Technology Regularly, by Peyton Bigora, March 4, 2024; the Grocery Dive article, Aldi Debuts Automated Checkout Tech At Chicago-Area Store, by Sam Silverstein and Lynne Marek; and the YouTube videos in the Spotlight. Image source: Hispanolistic/E+/Getty Images

Discussion Questions:

1. Do you prefer self-checkout or a traditional cashier? Why?

Guidance: Answers will obviously vary. An Acosta Group survey indicates that about 2/5 of shoppers prefer self-checkout, while about the same number prefer a traditional checkout process, with the remainder indifferent.

2. How does Target’s policy of “10 items or less” impact self-checkout performance?

Guidance: Based on limited application, Target claims that this policy will cut self-checkout time by over 50%.

Two factors are impacting this change. One is that the number of customers entering the self-checkout process will be reduced by eliminating customers with more than 10 items. Secondly, the service time itself is reduced with fewer items.

Queuing models can be used to illustrate this reduction in check-out time. For example, consider a self-checkout system with 8 assisted checkout stations. 70 customers per hour arrive into the system with an average service time of 6 minutes. Using the M/M/S model, the average time in system would be 9.8 minutes. If the new policy reduces the arrival rate to 35 customers per hour and service time to 4 minutes, the new system shifts from a 3.8 minutes wait in line to almost zero. The average time in system would be slightly over 4 minutes for the new system.

3. How should retailers handle the elimination or reduction of current self-checkout?

Guidance: Obviously, retailers should be prepared with enough staff for traditional checkout. Many people expect speedy checkout, and a shortage of cashiers will be received poorly by customers.

Retailers should also ensure that customers have a good experience in the checkout system. Target should be very careful about peak times when shutting down self-checkout lanes. It could be very frustrating for customers to be waiting in line with 10 items or less and see the self-checkout lanes empty.

4. How could retailers reduce theft from self-checkout systems?

Guidance: Newer versions of self-checkout offer potential improvement in terms of protection against theft with the use of cameras, sensors, and artificial intelligence. Systems such as Amazon’s Just Walk Out, and Aldi’s Aldi Go, skip the scanning step of the checkout process, and automatically track items removed from the shelf.

At a minimum these changes should help with accidental theft. Other theft prevention techniques include receipt checking, security guards, additional employees, and surveillance cameras.

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