Posted on 10/17/2002 3:53:57 PM PDT by SamAdams76
A new development in point-of-sale (POS) technology promises to extend the benefits of supply chain automation directly to the consumer, while achieving significant bottom-line advantages for merchandisers as well. Innovative bar code scanning–based self-checkout systems not only can save hundreds of thousands of dollars or more per year in labor costs, according to data collected by Productivity Solutions Inc. (PSI), a system manufacturer, but also offer retailers a competitive boost. PSI's studies reveal that consumers will actually choose to shop at stores with self-checkout systems and tend to remain loyal to those stores. Although research conducted by PSC Inc., a leading scanner manufacturer, reveals that some retailers are still hesitant—citing physical disruptions to floor space, procedural changes, and cost as possible barriers to their adoption of such systems—consumers' enthusiastic acceptance of technologies such as automated teller machines (ATMs) and pay-at-the-pump gasoline purchase proves that self-service works for them. Retailers are finally getting on board.
"I don't think anything is holding up self-checkout installation [any longer]," said Norman Tsang, vice president of marketing at PSI. "Retailers are becoming more knowledgeable about the systems and are now differentiating among the different solutions offered and the levels of ROI [return on investment] they can expect."
"Up until a year ago, self-checkout was in a trial and validation period," said Paul Denimarck, director of self-checkout systems for PSC, which introduced its QuickCheck product to the market in February. "It has now passed that hurdle and retailers are now looking at the alternatives available and deciding which system to implement. This is a very important milestone."
Although all self-checkout systems revolve around the same basic concept—letting consumers scan, bag, and pay for their items without cashier assistance—each solution has its own unique characteristics.
One feature that distinguishes PSI's solution from similar systems, said Mr. Tsang, is the fact that its ACM Self-Checkout lane looks like a conventional lane. "Our system is familiar and friendly to consumers, which eliminates any reluctance they may have about using the system," he said. "It's conveyor based, it's the same color as traditional lanes, and it has the same lane lights. We designed it purposely to be this way."
"It's a nice feature that the system blends in with the other checkout lanes," said Dave McGeary, retail technology advisor at Giant Eagle Inc. (Pittsburgh, PA), which has installed PSI solutions in 30 of its 200 stores. "However, there's a disadvantage to that. If you can't distinguish it, you may not be drawn to it without proper signage."
According to Mr. Tsang, PSI's solution can handle both express and large orders: "We can process any size order at any time, which sets us apart dramatically from our competitors."
Such features helped PSI establish a business relationship with IBM this past February, said Brian Scott, vice president/Americas for IBM Retail Store Solutions. PSI is now incorporating IBM hardware and software into its ACM Automated Checkout Machine, and the two companies are comarketing the product. ACM lets shoppers scan items and then use cash, credit cards, or debit cards at a centrally located pay station. The system comes with both touchscreen and voice-synthesized assistance.
"It's important to us to design solutions that meet all types of retailer and consumer requirements," said Mike Webster, general manager for NCR Self-Checkout. "For instance, we're even designing a solution with the height and reach requirements for consumers who are wheelchair-bound."
"Self-checkout systems should improve the entire shopping experience, saving the consumer money and time," said John Lucke, director of product management for Symbol Technologies. It is to this end that Symbol developed its Portable Shopping System (PSS). Now in more than 500 stores, primarily in Europe, PSS saves time by letting consumers scan items, check prices, and obtain a running total as they shop. They can even bag their items on the fly.
Currently, Giant Eagle is testing PSS. "We believe it's another option for the customer, but we're not certain yet if it's a viable option," said Mr. McGeary. "I'm not certain that enough customers will be drawn to it, but if we do choose to use PSS, it will be just one more option that we offer our customers. We see it as complementary to self-checkout."
Upon entering the store, a shopper inserts an identification card to remove a bar code scanner—the size of a telephone headset, weighing 0.36 kilograms—from an automatic dispenser kiosk. The scanner features three keys —plus, minus, and equals—as well as a visual display.
As the shopper selects merchandise, he or she scans each item's bar code using the plus key and places the item in a cart. If a shopper decides against purchasing an item, he or she can cancel by using the minus key to scan the bar code; the price is then subtracted from the shopping total. The equals key can be pressed at any time for a subtotal. When the shopper is finished, he or she returns the scanner to the rack and goes to an express pay station.
"We're taking a number of steps out of the self-checkout transaction," explained Symbol's Mr. Lucke. "The more conventional self-checkout systems eliminate only the cashier, but the customer still has to unload the cart to scan the items and then rebundle them for bagging. Our solution really saves time." Mr. Lucke anticipates that other retailers in North America will follow Giant Eagle and use Symbol's PSS as a complementary unit to self-checkout lanes. Symbol hopes to provide some incentive by offering retailers the benefits of mobile marketing. Here, as the shopper scans an item, a banner message encouraging the consumer to buy more scrolls across the handheld's screen. If the shopper has just scanned a roll of paper towels, for example, the scrolling message might advertise a buy-one-get-one-free offer. "You'll never get the consumer at a better point in the purchase cycle than at that point of decision," said Mr. Lucke.
Cross merchandising is also possible with mobile marketing. If the consumer buys diapers, for instance, a message on the device could promote baby wipes. "Inferences can be made as well," explained Mr. Lucke. "If someone has bought hot dogs and buns, we can scroll a message saying, 'Don't forget the chips.'"
Giant Eagle is moving cautiously toward mobile marketing. "We don't want to be a nuisance to our customers," noted Mr. McGeary.
But Symbol's Mr. Lucke remains confident that the combination of portable shopping and mobile marketing is a win/win for everyone. "The self-checkout solution has to benefit all parties involved: retailers, consumers, and packaging manufacturers," he said. "The retailer should see greater customer loyalty, the manufacturer should be able to streamline its marketing expenses, and the consumer should save time and money. We believe our solution enables all that."
A retailer can expect to pay close to $150,000 for a self-checkout system, which includes a cluster of lanes. The decision as to how many systems to purchase is primarily based on the volume of customers a retailer is looking to serve and how severe its labor shortage actually is.
Vendors warn retailers not to invest in a system just to turn the checkout process over to consumers. "The name of the game is getting the customer to scan the item and not have them mind doing it," said PSI's Mr. Tsang.
Symbol's Mr. Lucke agreed: "A retailer can't just outsource labor to the consumer. There has to be a benefit to the consumer."
Once the benefits are made evident and actually realized, industry insiders expect to see a boom in the sale of self-checkout systems. "We do think self checkout will be available at every supermarket and every mass merchandiser," commented PSI's Mr. Tsang. "In three to five years, this market will be much larger and will continue to be driven by consumer demand. They love the ease of ATM and pay-at-the pump. This is just a continuation of the self-service trend and vendors are bringing that application to the supermarket aisle."
"Shoppers are willing to adopt the technology," said NCR's Mr. Webster, "and retailers are hearing that message loud and clear."
Better than getting behind someone paying for two dollars worth of merchandise with a check.
Not me, I'm all for it, and can't wait.
I've always been a little (good-naturedly ;) ticked off over the concept of the "line", anyway. Who the heck hoodwinked consumers into just accepting the idea that it's a natural thing to stand in a line and wait for the privilege of exchanging our money for their goods?
I know what I wanna buy. I've got money in my hand. There's really nothing more to decide. Conversely, the store exists to get my money from me. They should want to do so as soon as possible. I figured out what I wanted and now I'm ready to give them money. So what's to wait for? Why am I waiting?
Cuz the store doesn't want to hire any more workers. Now, I know, I know, hiring so many checkout people that there are never any lines at all would be inefficient.
But automating the checkout process is not. Bring it on! :)
Maybe, but I didn't see any compelling reasons in the article to make me think so. The article is correct, consumers aren't going to enjoy having the supermarket's work pushed off on them unless there's a benefit, and speedier checkout (a dubious claim anyway) is not it.
The extra open lanes will be more than compensated by dawdlers, nose pickers, people who don't know any other method of paying besides checks, and all the folks scratching their head wondering what to do next.
No thanks.
My local Safeway just opened up this year, its huge, its popular, and yet checkout has never been a problem.
Hey, how 'bout we adopt the European standard, people pay for their shopping carts ala airport baggage carts, pay for their own grocery bags, and bag their crap themselves, all while paying higher prices. Yeah, that's it.
At my store they have one cashier who is there to help if you run into trouble, which has been quite helpful, as I once double-scanned something and didn't know how to remove it.
You need to learn the art of gently ramming into them while pretending that you thought there was enough clearance.
I'm not too fond of them my self. You know how you sometimes get stuck behind someone that acts like they had never filled out a check before and is taking the time to bask in the learning experience?
Well I've found automated checkout lines to be worse. I keep getting stuck behind people that are just now discovering the joy of scanning barcodes, reading, punching buttons, manipulating objects, and breathing.
They relish the moment with all the intensity of a 1 month old that just discovered his hands.
Two words: Death Penalty
Sob. "Ya' shouldn't outta ha' done it...baby."
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