Nobody likes self-checkouts. Here’s why it’s everywhere


If you’ve encountered these irritating alerts at the self-checkout, you’re not alone.

“It’s 2022. One would expect the self-service checkout experience to be flawless. We’re not quite there yet,” said Sylvain Charlebois, director of the agri-food analysis laboratory. Dalhousie University in Nova Scotia, which has researched self-checking.

Customers aren’t the only ones frustrated with the self-checkout experience. Stores also have challenges to overcome.

Machines are expensive to install, break down often, and can cause customers to buy fewer items. Stores also experience higher losses and more shoplifting at self-checkouts than at traditional checkouts with human cashiers.

Despite the headaches, self-checkout is growing.

In 2020, 29% of transactions at food retailers were processed through self-checkout, up from 23% the previous year, according to the latest data from the food industry association IMF.

This begs the question: why is this often problematic and unloved technology taking over retail?

Make customers work

The introduction of self-checkouts in 1986 was part of a long history of stores transferring work from paid employees to unpaid customers, a practice that dates back to Piggly Wiggly – the first self-service supermarket – in the early 1900s.

Instead of employees behind a counter gathering products for customers, Piggly Wiggly allowed shoppers to browse the aisles, pick items from the shelves, and pay at the checkout. In exchange for more work, the model promised lower prices.

Shoppers at Piggly Wiggly, the first self-service supermarket, in 1918.

Self-checkouts, however, were designed primarily to reduce store labor expenses. The system has reduced cashier costs by up to 66%, according to a 1988 article in the Miami Herald.

The first modern self-checkout system, patented by Florida-based CheckRobot and installed in several Kroger stores, would be almost unrecognizable to shoppers today.

Customers scanned their items and placed them on a conveyor belt. An employee at the other end of the belt put the groceries in a bag. Customers would then take them to a central checkout area to pay.

The technology has been heralded as a “revolution in the supermarket”. Shoppers “become their own grocery clerks because self-checkouts shorten those long lines of carts and reduce market staffing costs,” the Los Angeles Times said in a 1987 review.

But self-checkout hasn’t revolutionized the grocery store. Many customers were reluctant to have to do more work in exchange for benefits that weren’t entirely clear.

It took a decade to walmart (WMT) to test self-service checkout. It was not until the early 2000s that the trend accelerated in supermarkets, which sought to cut costs during the 2001 recession and faced fierce competition from emerging hypermarkets and club- warehouses.
Walmart first tested self-checkout in the late 1990s.

“The rationale was based on the economy, not the customer,” Charlebois said. “From the start, customers hated them.”

A 2003 Nielsen survey found that 52% of shoppers considered self-checkout lanes to be “ok”, while 16% said they were “frustrating”. Thirty-two percent of shoppers rated them “awesome.”

The mixed response has led some grocery chains, including Costco (COST)Albertsons and others, to remove self-checkouts they had installed in the mid-2000s.
“Self-service checkout lines clog up as customers had to wait for store staff to help them with barcodes, coupons, payment issues and other issues that invariably arise with many transactions,” grocery chain Big Y said in 2011 when it axed its Machines.

Gateways

The shift to self-service checkouts has also had unintended consequences for stores.

Retailers have found that self-checkouts are not self-sustaining and require regular maintenance and supervision, said Christopher Andrews, a sociologist at Drew University and author of “The Overworked Consumer: Self-Checkouts, Supermarkets and the Do- It-Yourself Economy”.
Stores have issues with self-checkout, including higher levels of theft.

Although self-checkouts eliminated some of the tasks of traditional cashiers, they still needed to be staffed and created a need for higher-paying IT jobs, he said.

Self-checkout, Andrews added, “doesn’t deliver what it promises.”

In the biggest headache for store owners, self-checkout leads to more losses due to error or theft than traditional cashiers.

According to Adrian Beck, Emeritus Professor at the University of Leicester in the UK, who studies retail losses, “If you had a retail store where 50% of transactions were through self-checkout, the losses would be 77 % higher” than average.

Customers make honest mistakes and intentionally steal from self-checkouts.

Some products have multiple barcodes or barcodes that do not read correctly. Products, including fruit and meat, usually have to be weighed and manually entered into the system using a code. Customers may type in the wrong code by accident. Other times, shoppers won’t hear the “beep” confirming that an item has been successfully scanned.

“Consumers aren’t very good at digitizing reliably,” Beck said. “Why should they be? They’re not trained.”

Other customers take advantage of lax surveillance in the aisles of self-service checkouts and have developed theft techniques. Common tactics include not scanning an item, swapping a cheaper item (bananas) for a more expensive item (steak), scanning counterfeit barcodes strapped to their wrists, or scanning everything properly and then walking out without pay.

Stores have tried to limit shrinkage by adding security features to self-checkouts, such as adding weight sensors. But additional anti-theft measures also lead to more frustrating “unexpected item in bagging area” errors, requiring store employees to intervene.

“There’s a delicate balance between security and customer convenience,” Beck said.

Self-checkout is here to stay

Despite the many shortcomings of self-service checkouts for customers and store owners, the trend is only growing.

walmart (WMT), Kroger (KR) and General dollar (CEO) operate exclusively self-service stores. Costco and Albertsons have brought back self-checkout after scrapping it years ago. Amazon (AMZN) took the concept one step further with cashierless Amazon Go stores.

It may simply be too late for stores to turn their backs on self-checkout.

Amazon has developed cashierless Go stores.  Other retailers are trying to follow the trend.

Today, stores cater to shoppers who perceive self-checkout to be faster than traditional checkouts, even though there is little evidence to support this. But, because customers are doing the work, rather than queuing, the experience can feel like it’s moving faster.

Store owners also saw competitors installing self-checkouts and determined they didn’t want to miss out.

“It’s an arms race. If everyone does it, you look like a fool if you don’t have it,” said David D’Arezzo, former executive at Dollar General, Wegmans and d other retailers. “Once you take it out of the bag, it’s pretty hard not to give it away.”

Covid-19 has also accelerated the spread of automatic checkouts.

During the pandemic, many customers opted for self-service to avoid close interactions with cashiers and baggers. And the challenges of hiring and retaining workers have led stores to rely more on machines to get customers through the door.

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