Retail column: Is self-checkout a benefit?
| Wednesday, Apr 29 2009 04:21 PM
Last Updated Wednesday, Apr 29 2009 04:21 PM
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Employees met before doors opened at the northwest Bakersfield Fresh & Easy Neighborhood Market in December 2008.
Technology has been supplanting human labor ever since the Industrial Revolution kicked off the era of mass production.
The march of machinery is more visible than ever. You can get cash from an ATM rather than a bank teller, or bypass an airline ticket agent by checking luggage at an airport kiosk.
Increasingly, retailers are turning to self-checkout systems instead of cashiers.
The jury’s still out on whether this is a good thing, but it’s clear the trend is gaining momentum.
Self-checkout transactions last year rung up nearly $450 billion, according to market research firm IHL Consulting Group.
There are pros and cons to implementing these systems.
The most obvious hindrance is upfront cost. Hardware starts at about $50,000 for the most basic, no frills model. Expect to pay far more if you want more than one lane, or extra features such as a conveyor belt, said Aravindh Vanchesan, program manager with the retail systems unit of consulting firm Frost & Sullivan.
And that’s not counting the cost of tearing out the old system and installing wiring for the new one. It also doesn’t include the software, which can be as much as $250,000.
“Obviously that’s not a cost you’re going to get back right away,” Vanchesan said. “It will be three or four years, at least, before it pays for itself.”
The most ardent local enthusiast is Fresh & Easy, a chain of small grocery stores that has no traditional checkout lanes. There are an average of nine self-service checkouts per store, including express stations for 15 items or less.
“We call them assisted checkout because there’s always someone there to help if you need it,” said spokesman Brendan Wonnacott.
“We’ve had some pretty incredible feedback that customers like it. With nine lanes open at all times, it really does eliminate lines.”
That’s if the transaction has no hiccups, of course. Commonly, machines lock customers out if the weight of the merchandise on a scale doesn’t match the weight the machine expects, which can be a signal that something has been bagged but not scanned.
The system also gets tripped up if customers use environmentally friendly reusable bags.
In either case, a real human has to unlock the machine, which robs customers of any time they might have saved scanning their own purchases.
“I don’t think they’re as widely accepted as stores think,” said Carlsbad retail consultant George Whalin.
“They’re pretty cumbersome if you have more than one or two items. I see them at my local Albertsons, and they’re never used.”
The machines tend to intimidate the elderly, in particular, so it may be wise to avoid them if your customer base skews older.
There’s also the question of security. Labor savings are diminished if you have to staff machines to make sure nobody’s stealing.
That expense doesn’t worry Frost & Sullivan’s Vanchesan.
“Cashiers who steal are a much bigger security risk than customers,” he said. “It’s hard for customers to take anything with a line of people behind them, watching.”
Self-service checkout stations ought not eliminate human beings, Vanchesan said.
He’d like to see retailers use them to free up labor for other activities, such as working the sales floor and helping people get bags to their cars.
But it all may be moot, because these checkout lanes could be gone in our lifetime.
Somewhere, evil geniuses are working on a system that would put electronic tags on merchandise that would be scanned as you and your shopping cart pass through an airport security-type walkway, said Scott Testa, a marketing professor with St. Joseph’s University in Philadelphia.
Well, that’s mostly what he said, anyway. The “evil genius” part is my words.
