Shopping in the Automated Future
In this article, Questia Group focuses on the ’self-checkout’ trend, namely on machine mechanisms that help customers purchase their items from retailers. Our research was conducted through an online survey on our platform www.questia.ro covering 663 respondents, with a plus or minus 4% margin of error. The survey was active between 29 and 31 August 2017. Our key findings are presented below.
Self-service is not a new concept. In fact, in 1916 Clarence Saunders pioneered a new supermarket concept in the US that lets customers use a shopping basket and select their items from the shelves without assistance from store clerks. The store, despite its name, ’Piggly Wiggly’, started a revolution. In this manner, it became the new model for supermarkets and the beginning of self-service in retail.
Self-service technologies are defined as technological interfaces that enable customers to produce a service without direct employee involvement. Self-service machines have appeared everywhere: from airports to banks, hospitals, gas stations, restaurants, entertainment venues and retail stores.
According to an NCR Whitepaper, self-service has become a ubiquitous part of our world and has helped create a new era of efficiency, convenience, and productivity benefiting both deployers of self-service and consumers. In retail, self-checkout is used extensively in supermarkets, mass merchants/hypermarkets, convenience stores and home improvement stores and has strong consumer acceptance. First, we will present the pros and cons, and then we briefly present some consumer insights regarding self-checkout machines. For the following section, we turned to an article that summarizes the pros and cons of self-checkout machines in the retail industry here.
Speed: Purchases are made quickly by people by ringing up items themselves. This can be especially helpful during peak sales times when stores experience rushes with a large influx of customers. In this manner, this reduces the length of waiting in queues, which should keep customers happy while minimizing the stress on employees.
Space: Because multiple machines/kiosks can be placed into a relatively small area, stores can take care of customer transactions with minimal space. In some cases, up to six kiosks can take up the same amount of space as a single traditional checkout area with a cashier.
Costs: Utilizing a self-checkout system can considerably cut back on cashiers because a single employee can monitor several kiosks at one time.
Difficulties: While some people are tech savvy and can navigate their way through self-checkouts with ease, it can be problematic for others. Even with a relatively intuitive navigation menu and audio instructions, this system can be frustrating to many shoppers.
Theft potential: Although most systems are equipped with some form of anti-shoplifting technology, there is often a higher likelihood of theft occurring. Because employees are unable to monitor customer transactions as closely on self-checkouts, it’s easier for customers to steal. See more on this issue here.
Personal interaction: Rather than dealing with a faceless machine, customers enjoy a brief conversation with employees and the personal attention they receive. However, while automation has helped retailers address the efficiency in challenging in many areas of business, service remains an important differentiator, particularly in store.
Job loss: The retail sector has the highest proportion of existing jobs at high risk of automation. For instance, in the UK there are 300,000 fewer people in the sector since 2001 – almost a quarter of the job losses in the industry have affected cashiers and shelf fillers. Many jobs in retail are entry-level, low-skill ones, and the elimination of many such positions could cause a public outcry. For more insights of the pros and cons of automation, see our blog article here.
Focusing on consumers
Worldwide, 91% of people aging 35 and younger, 85% aged between 35 and 50 and 82% of those aged 51 and older have used self-checkouts at least once. The number of self-checkout stations worldwide is 624,500 and it will increase through the years. For instance, only self-checkout terminals are projected to increase to 325,000 by 2019.
A number of social and economic barriers currently limit the extent of their use in stores; these factors include theft, maintenance, perceptions of service, internal controls, and specific labor contract provisions. A study also suggest that external, rather than internal, market factors may be driving current employment trends, including competition in the low-wage labor market and the emergence of nonunion competition into the retail food industry.
Ryan Buell, an assistant professor at the Harvard Business School, suggests that that self-service technology can pretty dramatically change what people do and how they act – though the research is hardly clear-cut on it being the best option for all businesses. He says that there are three things that determine when a customer will willingly engage in self-service.
- First, customers have to know what’s expected of them.
- Second, they have to be capable of doing what’s expected of them.
- Finally, and this is one where a lot of companies fall off the rails, they have to see the value of expanding the extra effort in order for it to be something that they would willingly engage in.
Data suggest that of the 2,803 consumers surveyed in Australia, France, Germany, Italy, Japan, Russia, Spain, UK, and the US by the NPD Group 90% identify themselves as users of self-checkout. Another study found that most shoppers consider self-checkouts fast and easy to use. This varies, though, with age – 90% of shoppers aged 18-39 found self-service checkouts easy to use, but only 50% of those over 60 said the same.
Other experiences with self-checkouts can be found here regarding strategies used to scam such machines, as approached by Vice UK., a country that experiences high increase rates in shoplifting with the rise of self-checkout machines.
Consumer awareness regarding self-checkout machines is not so high in Romania: only 35.0 have seen self-checkout machines at the stores where they usually purchase items, while 47.2% said they didn’t see any, and 17.0% don’t know or don’t remember. This is attributed to the fact that not so many retailers have started to use such machines.
Consumers highlighted a very high degree of future usage of self-checkout machines if these machines were available to them. In this sense, 41.8% suggested they would use them to a very great extent, 35.7% to a great extent and only 22.5% said they would not use them, with 4.4% never using them.
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