Article

The only end in sight for self-checkout is 'the end of the beginning'

Top retail self-service suppliers and analysts say self-checkout's in no danger.

July 25, 2011 by Christopher Hall — w, t

In the wake of the news that Albertsons LLC is pulling self-checkout from its 217 Albertsons stores and that Kroger is trialing a self-checkout-less store, news stories cropped up across the Internet about "the trend" of pulling self-checkout from grocery stores.

Setting aside the issue of whether or not one or two occurrences of anything can properly be called a trend, two of the top players in the self-checkout business say nothing could be further from the truth.

Both Wincor Nixdorf and NCR Corp. reacted to the idea that self-checkout might be in trouble with what might almost be described as amusement.

"Far from being at the end, we're at the end of the beginning, and the opportunity for retail automation is healthier than it's ever been," said Doug Wallace, vice president of Wincor Nixdorf's Retail Division, in a recent interview.

Wallace pointed to a study from late last year saying that 2010 would see consumers spend $740 billion through self-service or self-checkout technologies in North America, and said Wincor Nixdorf isn't seeing any signs that it's slowing — despite the news from Albertsons and Kroger.

NCR Retail spokesman Cameron Smith echoed those sentiments, saying that analysts continue to predict strong growth in the sector and that NCR's own research confirms that idea.

"We certainly don't see any slowdown in interest from retailers," he said. "We continue to have great conversations with retailers around the world with regards to self-checkout and we're continuing to expand it in new markets frequently"

Smith also pointed out that Supervalu, which owns and operates nearly 500 Albertsons stores in western states, was quick to issue an announcement hot on the heels of the Albertsons LLC news that the Supervalu stores would be keeping their self-checkout lanes.

And a recent story on MSNBC.com said "self-checkout suppliers raked in $524.1 million worldwide in 2010, a 46 percent increase from 2007, according to technology research firm VDC Research Group, which projects growth of 84 percent over the next five years. As technology improves, self-checkout likely will migrate into store aisles as customers armed with smart phones use new apps to scan and pay for items on the spot."

Wincor Nixdorf sees four main drivers for continued adoption of self-service and self-checkout in retail, Wallace said: increased consumer choice, increased ease of use for consumers, speedier checkout times for consumer, and increased convenience for consumers.

And Wallace pointed to three macro trends he sees driving the market's continued growth globally: new formats adopting the technology, like c-stores and drug stores; new solutions with an increased focus on the consumer and making checkout easier for them; and new technology hitting the marketplace to make checkout faster and, perhaps, more fun. (To wit, Wallace talked up Wincor Nixdorf's new 360-degree scanner that makes checking out easier and faster, with a scanning speed of up to 80 items per minute.)

"We think that, and I think every other consultant and analyst believes that, the marketplace is going to continue to grow at a massive rate," he said.

NCR has also been seeing exactly the growth in non-grocery deployments that Wallace discussed — e.g. the news that the 120-store-strong Quick Chek c-store chain in New York and New Jerseycontinues to deploy NCR Corp. SelfServ units in its stores — and the company also is introducing new technology to make the self-checkout process more personalized, Smith said.

"We are seeing greater interest in self-checkout in the convenience store realm in particular," he said. "They're finding that self-checkout is a great way to augment their existing employee capabilities."

Smith talked about NCR's new technology that will make self-checkout more personalized, allowing consumers to set preference through their loyalty cards, such as language or right- or left-handedness, that the device will recognize and adapt to.

And self-checkout continues to change the grocery and retail from its 1950s-era paradigm of employees at the front of the store while shoppers mill about the aisles. Retailers are now seeing that self-checkout allows them the benefit of being able to redeploy staff inside the store to stock shelves and help customers find the items they're looking for, Smith said.

"The DIY category is a perfect example of that," he said. "By now employing self-checkout they can provide more expert help and associates that can help consumers make the right choices inside the store ... so they've found concrete benefits there as well."

Far from being the death knell of self-checkout, it looks more like the news from Albertsons and other grocers is just a bump in the road.

"There are some who think that the end is nigh for self-checkout," Wallace said. "But we strongly believe that's not what's actually happening. We believe that our industry is at the end of the beginning, and it's a new dawn for automation in the retail industry."

To read more about self-checkout technologies, go to our self-checkout research center.

About Christopher Hall

---

None

Connect with Christopher: