Lessons from Research on Self-Checkout Technology

self-checkout technology

The prospect that self-checkout technology or no checkout will come to dominate retail environments is reflected in two recent news items.

In one, a recent survey of consumers, 60 percent said they’d actually prefer retail stores to offer “just walk out” shopping, akin to the Amazon Go store experience. In the other, CBC News reported that three Canadian Tire stores in Toronto and all PCC Community Markets in the Seattle area were pulling their self-checkout machines, a move praised by some shoppers who said they found them frustrating and tedious.

In other words, the future is far from certain. In some store environments, removing store cashiers will likely make good business sense. In others, it probably won’t. And execution matters, whichever path retailers pursue.

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Given the extent to which cashier-less shopping transforms the shopping experience and impacts retail operations, it’s not surprising that it is the subject of a significant amount of research. What do shoppers think about it? What do thieves think about it? What is to be gained? Lost?

Here is a look at broad lessons derived from several recent studies on transforming in-store checkout.

A thief’s perspective. Stephanie Lin, a research scientist with the Loss Prevention Research Council, interviewed dozens of shoplifters with recent self-checkout theft experiences to understand their shoplifting behaviors, methods, and thought processes. Through its SmartCheckout Centers of Excellence, the LPRC helps retailers minimize costs and losses in cashier-less operations.

What do they say? “The main reason offenders leverage this theft option is because they felt self-checkout theft is easier to get away with,” Lin writes in her article, “Offender Perspectives on Self-Checkout Theft.” “Almost all offenders I interviewed indicated they use self-checkout for shoplifting because they receive less attention from both employees and other customers.”

Because self-checkout (SCO) thieves are seeking anonymity, store associates in SCO areas play a crucial role in deterring shoplifting, concludes Lin. Overall, her interviews with thieves suggest that adequately managing loss related to self-checkout technology requires retailers to supervise SCO areas with employees and technologies.

To date, retailers have not done an adequate job supervising self-checkout areas, according to research by the University of Leicester’s Adrian Beck, Self-Checkout in Retail: Measuring the Loss, Oct. 2018. “The study identified the key role SCO supervisors can play in providing control and yet many respondents also highlighted how they had not been prioritized in their businesses,” says the report. “Too often, the ‘walking wounded’ were given responsibility for managing the SCO environment when in fact what is needed is somebody who is highly experienced, outgoing, customer-focused, and highly attuned with the peculiarities of this demanding and risk space.”

A good fit? An online survey by GPShopper finds that consumers are significantly more excited by the prospect of scan-and-go technology in some retail environments than in others. Fifty percent of respondents said would like to be able—when grocery shopping—to scan items as they shop and then pay through the store’s mobile app, thus avoiding checkout lines altogether.

However, fewer want the option in home goods stores (30 percent), fashion stores (27 percent), and beauty and cosmetic retailers (25 percent). Only 21 percent said they would like to see scan-and-go in sports and outdoors stores, according to GPShopper’s Reality of Retail Personalization Report.

Not surprisingly, a shopper’s age has a lot to do with whether or not he or she is likely to be attracted to the idea of bypassing a cashier altogether, according to a survey by Mulesoft, Consumer Connectivity Insights 2018. Some 77 percent of shoppers aged 18 to 34 like the idea, but only 42 percent of shoppers 55 and older do.

Brand fit is also an issue, as suggested by the decision by PCC Community Markets to revert to full-service cashiers. With two-thirds of its customers choosing to avoid self-checkout lines, a representative said the machines were determined to not be a good fit for a chain that focuses on community. Conversely, the sock maker and retailer Stance adopted a different perspective after long checkout lines during the 2017 holiday season presented a problem for customers. The retailer partnered with Moltin for a self-checkout technology that operates outside of a store app to speed checkout and to be “where retail is headed,” a company executive told STORES magazine.

Scan-and-go technologies could have even more theft problems than fixed self-checkout technology, suggested Joel Larson, a former Walmart senior manager who led the company’s Scan & Go initiative as the head of checkout innovation. In an interview with Business Insider, the executive said shopper theft was a major reason why Walmart axed its Scan & Go cashierless-checkout technology several months after expanding it to more than 100 stores (“Ex-Walmart exec says theft helped kill Walmart’s cashierless checkout technology,” Feb. 7, 2019). “You think that the theft is bad on self-checkouts? Wait until you try Scan & Go, where nobody is watching the customers out in the aisles,” Larson warned.

Risky business. The benefits a retailer enjoys from using customer checkout systems is offset, at least in part, by higher losses. According to Adrian Beck’s research, which was supported by the ECR Community Shrinkage and On-Shelf Availability Group and based primarily on data supplied by participating retailers, fixed self-checkout technology is associated with higher losses. A store that has 55 to 60 percent of transactions going through fixed SCO can expect losses to be 31 percent higher, the data suggests. In the report’s grocery store case studies, losses were between 33 percent to 147 percent higher. The more self-checkout machines a store has and the more they are utilized, the higher the losses, the study found.

“The control of the fixed SCO environment needs to focus upon developing a clear zone of control,” concludes the study. Establishing control requires a high level of customer service and well trained and incentivized capable guardians in SCO areas. Retailers should also consider the use of scan verification technology, as well as product verification technologies as they evolve, the study says. “Through a combination of these factors, operating within a culture of compliance and dynamic application, this may be the most comprehensive approach to adopt.”

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