People Who Don't Need People, Are the Luckiest People at the Self-Checkout

By Evan Schuman  |  Posted 08-17-2005

People Who Don't Need People, Are the Luckiest People at the Self-Checkout

Are consumers seeing self-checkout as the anti-customer-service initiative they feared? Not according to the latest industry study, which predicts self-checkout revenue will double this year (compared with 2004) to $161 billion, and could hit $454 billion by 2008.

The study, conducted by retail consulting firm IHL Consulting Group, is far more interesting than those numbers would suggest. IHL’s people looked not only into the revenue trends, but also into the demographic splits and retailer preferences, and found some intriguing trends.

The report says that young people, on the whole, are grumpy and don’t like to deal with people. Further, it says that men like self-checkout more than women because—warning: gender stereotype dissemination commencing—they hate shopping and have always hated shopping.

For retail IT execs trying to sell self-checkout to their superiors and for retail marketers trying to figure out how to use it, these figures offer hints about better and unexpected ways to use these weight-checking money-grabbing machines.

For IHL President Greg Buzek, one of the more interesting conclusions of the research suggests that retail execs have much less of an understanding of their customers than they than they think they do. He pointed to Target as an example.

Target is one of the industry’s few retail giants that has refused to use self-checkout systems.

”Target will not install self-checkout ‘cause it takes away from the customer experience,” Buzek said. “They have a belief that their customers don’t like self-checkout.”

But when IHL analyzed its 650 consumer interviews, it found that 22 percent of the Target customers it talked with said that they use self-checkout “all the time” when they shop at other retailers.

Even more interesting, 99 percent of the Target customers IHL interviewed said they “commonly” use self-checking when shopping for grocery or household items. Only one percent of the Target customers interviewed said they would not use self-checkout technology.

If those numbers are indicative of Target customers in general—and don’t get me started on the dangers of overanalyzing survey stats or Web traffic—then it seems like a good chunk of Target's customers are just fine with using self-checkout systems anywhere else.

Target certainly isn’t alone among retailers who have refused to deploy self-checkout, but they are in a shrinking minority.

Kmart was a very early adopter, but it sharply pulled back after a lack of customer interest. There’s no indication yet whether the Sears merger will change Kmart’s feelings about self-checkout.

To read more about the Sears/Kmart merger plans, click here.

But perhaps it should. It’s not coincidental that Kmart was an early adopter and found weak results. Self-checkout is a new approach and American consumers are slow to warm to new shopping methods.

Indeed, one of the IHL conclusions is that a key reason for the increasing use of self-checkout is …. well, the increasing use of self-checkout.

In other words, as consumers see self-checkout in more locations and see more people using it, they become more comfortable with it themselves.

That and a healthy touch of resignation that they’re here and “We might as well get used to them.” Think full-serve gas stations that rarely wipe windows or check oil anymore, though that lack would have seemed outrageous a decade or two ago.

People got used to it and lowered their expectations of gas station service.

The whole argument for self-checkout, of course, is that it will improve customer service by taking personnel out from behind the POS—where they can do little value-add—and get them carrying groceries to the car, making hot meals at dinnertime, arranging floral packages and baking cakes. (Musical interlude: “If I knew you’d be scanning, I’d have baked a cake, baked a cake….”)

Although self-checkout is a key payment tactic, the $2.3 billion 3,000-store Rent-A-Center chain found wireless POS as a more compelling approach. To read more, click here.

An especially uplifting part of the IHL report was that consumers 19 years old to 25 years old tended to really like self-checkout because, among other reasons, they preferred using the machines to dealing with store personnel.

Some 48 percent of the interviewees in that age group listed “I don’t want to deal with people” as their reason for liking self-checkout. That figure is much lower for almost all other demographic segments.

”Those under the age of 35 are the ones most likely to be buying online so they are used to checking out by themselves,” Buzek said. “They’re really comfortable doing these things online and doing things by themselves.”

Buzek added his theory that earlier generations were taught to be courteous (“Have a nice day”) and “the younger generation views that as being fake. They abhor anything (commercial) that is not real.”

That’s one theory. Another interesting IHL self-checkout conclusion is that men gravitate to self-checkout machines much more than do women, which is statistically interesting because women still do more of the grocery shopping

Next Page: Why men like self-checkout so much more than women do.

Why Men Love Self

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Buzek said that men’s basket size tends to be much smaller, which makes them more comfortable with self-checkout. In other words, all consumers with two, or four, or five items in a basket will find self-checkout more compelling than someone with an overflowing cart.

But the bigger driver is that men tend to hate shopping and see a self-checkout aisle as a way to get out of the store faster, which is their primary goal.

On a sadder sign-of-the-times note, the survey found that 52 percent of those interviewed identified their greatest dislike about checkout comes from transactions that are halted in the middle, to make way for employee intervention.

Survey participants said such employee interruptions are happening in about one out of three shopping trips, greatly undermining the promise of speed that lured them to the self-checkout aisle in the first place.

Although initial suspicions were that self-checkout would be a shoplifting haven, it’s actually turned out otherwise. To read how, click here.

One, fairly positive, reason for those interventions is to check the sale of age-restricted items such as alcohol and cigarettes, or clear up glitches where the weight didn’t register properly or items were incorrectly moved from one bag to another. Buzek said those issues will soon be addressed by ID scanners and by tweaking machine-set tolerances.

The sad part is that systems now have to monitor the sale of certain items due to concern about drug-abuse or terrorism.

Among the otherwise-benign products being pulled off some counters, Buzek says, are Claritin D and Tylenol Sinus; both products, like many cold medicines containing Pseudoephedrine or ephedrine, can be used in the production of methamphetamines.

”If someone tries to buy 15 gallons of bleach, that will send an alert,” Buzek said. “In California, it’s spray paint.”

So self-checkout systems are now placing cashiers in the role of surrogate law enforcement. The sad part is that’s probably not a horrible idea. Maybe Barbra was more right than I thought.

Evan Schuman is retail editor for Ziff Davis Internet's Enterprise Edit group. He has tracked high-tech issues since 1987, has been opinionated long before that and doesn't plan to stop anytime soon. He can be reached at Evan_Schuman@ziffdavis.com.

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