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Operations & Supply Chain
better shoppers,” he says.
Suketu Gandhi, a partner in the Digital Transformation
Practice of consulting firm A. T. Kearney, characterizes
self-checkout as “a mixed bag” because of certain prob-
lems, including shrink and the difficulty in processing
bulk items such as fresh produce. He suggests that camera
surveillance of self-checkout lanes might alleviate shrink,
but adds “that it’s still an area of experimentation.”
Gandhi also says self-checkout is the basis for “store of
the future” models, most notably the prototype grocery
store unveiled last year by Amazon in its hometown of
Seattle. Dubbed Amazon Go, the 1,800-square-foot store
has no human cashiers. When shoppers remove an item
from the shelves, it automatically registers through a phone
app; they then walk out the door with the total charged
to their Amazon account. A store with a similar concept,
using cameras to track item removal, was opened this year
in Santa Clara, Calif., by tech startup Standard Cognition.
“Pure” self-checkout of that nature seems far in the
future, and not just for technical reasons. Bishop says
one reason Tesco failed with Fresh & Easy, a chain of
small-format groceries in the Southwestern U.S., was
that it was solely self-checkout, which many customers
weren’t ready for.
Holman of IHL says while self-checkout may have
leveled off from its early adoption, it’s still a viable part
of supermarket operations. “Few retailers had realistic aspirations of replacing all traditional POS with
self-checkout,” he says. “Rather, having 10-30% of lanes
as self-checkout seemed to be the sweet spot.” According
to an FMI survey, in 2016, 14% of supermarket transactions were in self-checkout—and that figure set a record.
One of the biggest hang-ups in self-checkout is that it
requires self-bagging, which inherently sparks considerable consumer resistance, particularly among older shoppers. “There’s kind of an age relationship with folks who
want to do it themselves and do it faster because they’re
in control, versus having someone else do it and enjoying
the service benefit,” Bishop says.
Even when human cashiers are involved, potential
strategies exist to dislodge bottlenecks. One of these is
streamlining payment systems. Shoppers of a certain age
remember what it was like to have to wait as someone
wrote a check, but now it’s rare: Only 4% of grocery sales
were made by check in 2016, according to the FMI survey.
Credit and debit cards together make up 71%. Plastic payments are faster than checks, but there’s been a hitch with
the rollout of EMV or “chip” cards, which typically take 10
seconds or more to validate.
“Truth be told, EMV did more to hinder the operation,
profitability and innovation of grocers than anything
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