Article

Self checkout could dominate sales aisles

A well-integrated customer self-checkout program can bring higher revenues for retailers.

November 9, 2010

By Staff

Consumer’s today are adopting self-service technologies in the retail marketplace and merchants should consider integrating these concepts in their stores, according to a recent report sponsored by IBM Corp.

One successful application that demonstrates the consumer adoption of self-service technology is the self check-in at airlines that has become widespread in the last decade. This same type of convenient technology is growing throughout the retail sector.

Today, retailers primarily deliver self-service through a kiosk, say in the ‘endless aisle’ application, in photo kiosks, and self-checkout systems. The kiosk offers convenience to the customer and a positive ROI to the store.

“Many customer-facing kiosks actually drive increased revenues and sales, in some cases 30 percent or more,” said Ken Duffy, an IBM marketing manager.

Duffy notes that deli kiosks have increased consumer spend by 35 percent in some instances, and a guided sales kiosk that targets a specific product drove a 20 percent increase in sales.

And retail self-serve has become an all-ages show. For instance 91 percent of consumers 35 and younger said they made a purchase using a self-service retail device in the previous six months, according to the 2009 Self-Service Consumer Survey.

That compares with 85 percent of consumers aged 36 to 50, and 82 percent of consumers aged 51 and older, the survey reported.

One challenge for retailers is integrating self-service technology with their stores’ existing point-of-sale and back office systems.

“Companies often have lots of back-end technologies that are different and don’t necessarily talk to each other,” said Jeff Weidauer, vice president with Vestcom, a provider of solutions for retailers.

To truly take advantage of self-service technologies retailers need to manage applications like self-checkout at the enterprise- and store-levels, said Norma Wolcott, business line executive for self-service with IBM.

That way the merchant can “automatically distribute software updates down to the lane and … track hardware and software levels,” said Wolcott. This intelligence helps retailers keep customer-facing kiosks up and running.

Self-checkout technology has become so widespread that many consumers now expect it when they go to the store. That should probably convince merchants that have wavered over installing the technology to join their competitors in offering self checkout, according to experts.

Indeed, it’s possible there soon will be more self-service lanes at retailers than cashiered, or traditional, checkout lanes, says Bruce Kopp, SVP with Fujitsu America in Sunnyvale, Calif.

“Today it is about two-thirds (traditional)/one-third (self-checkout)  ... in most stores,” Kopp said. “More and more companies are moving to having fewer actual cashiers. You are always going to need a few because things come up and … there are some people who just don’t like self-checkout … but I do think you are going to see self-checkout becoming the dominant front-end mechanism in retail.”

Retailers are adding applications to self-serve at the store to make it more appealing to consumers. The Metro Grocery chain in Canada offers a kiosk where recipes can be printed out, and the consumer can watch a video of cooks preparing various recipes, says Bill Phelps, business development manager of Zebra Technologies.

“They’ve actually filmed people cooking those recipes, so as you are walking by you can actually see someone making a recipe, and that leads you to go over and print out that recipe and try it yourself,” said Phelps.