For over a decade, self-checkout lanes have promised a faster and more convenient shopping experience. However, recent changes at major retailers suggest a potential shift. Retail giants like Target, Walmart, Safeway, Costco, Dollar General and Five Below are removing or limiting self-checkout options, raising the question: are we witnessing the end of self-checkout as we know it?

Several factors are contributing to this trend, according to Patrick Penfield, Ph.D., professor of supply chain practice at Syracuse University. A key one is inventory shrinkage and shoplifting.

The perfect storm: Rising theft and frustration

Increasing incidents of theft continues to be a main reason major retailers have removed or adjusted their self-checkout options. These incidents lead to inventory shrinkage, or a discrepancy between the retailer's recorded inventory and its actual inventory. Shoplifting is a major cause of shrinkage and results in lost profit for the retailer.

"To put it simply, there is a direct correlation between shrink levels increasing and self-checkout options starting to decrease," Penfield said. He explained that with the combination of increasing minimum wages, labor shortages and the process of pulling the self-checkouts themselves, there is significant money lost on equipment where theft is high.

The vulnerability is often due to a combination of factors:

  • Technical limitations: Self-checkout systems can be easily fooled by tactics like switching barcodes or exploiting weight discrepancies.
  • Understaffing: With fewer employees monitoring self-checkout areas, opportunities for theft increase.

Beyond theft, CNN cites customer frustration with self-checkout malfunctions and false alarms as another major pain point. This frustration can negatively impact customer satisfaction and brand loyalty.

Which retailers have removed or changed their self-checkouts?

Walmart

Walmart has removed self-checkouts from many of its stores, including locations in Shrewsbury, Missouri, Cleveland, Ohio and Albuquerque, New Mexico. Walmart U.S. president and CEO John Furner told ABC News "There are a few stores where we've made the decision that they'll come out of, but we haven't made that decision in every store," he said.

"Over the next few years, we're really going to lean into new types of technology that can make the checkout process even better for customers."

Target

In a press release earlier this year, Target outlined its plan to limit its self-checkout lanes to a maximum of 10 items.

"Today, ease and convenience are top of mind, so, to learn more about guests' self-checkout preferences, we piloted the concept of Express Self-Checkout with limits of 10 items or fewer at about 200 stores last fall," Target said in the release. "The result: Self-checkout was twice as fast at our pilot stores. By having the option to pick self-checkout for a quick trip, or a traditional, staffed lane when their cart is full, guests who were surveyed told us the overall checkout experience was better, too."

Target also announced it will be rolling out "Express Self-Checkout" at most of its nearly 2000 stores nationwide.

Costco

Costco has recently begun cracking down on customers who share their membership cards by asking for photo ID from customers looking to use the self-checkout lanes. They hope that this move will deter people from giving their membership cards to non-members. There has been a longstanding policy at Costco for customers to show ID when going through traditional checkout lanes; however, customers using self-checkout have not been forced to show ID until now. This has led to an increased number of people who are not Costco members using members' cards to enter the store, shop and receive discounts without having to pay for their own memberships.

Safeway

Safeway, a supermarket chain that operates 918 stores throughout the U.S., recently began removing self-checkout kiosks at some Safeway locations in the San Francisco Bay area.

"Operational changes have been made at select stores throughout the Bay Area given the increasing amount of theft," a representative for Safeway told Newsweek.

"Self-checkout kiosks have been removed at a few stores. Like other businesses, we are working on ways to curtail escalating theft so we can ensure the well-being of our employees and foster a welcoming environment for our customers."

Dollar General

Dollar General has moved to almost entirely eliminate self-checkout usage in general. The discount-retailer has stopped the use of self-checkout in 12,000 of its stores, leaving the kiosks in only a handful of its locations.

When asked how the 12,000 stores have responded to the removal, Todd Vasos, CEO told the Daily Mail that "There is no doubt we're getting positive customer feedback across the board on the 9,000 and quite frankly, some of the 3,000 that we did in May." Adding "consumers like the interaction at the front of the store."

Five Below

Five Below reported a higher-than-expected level of shrink last year. The retailer is responding by limiting the number of self-checkouts at its stores as well as checking receipts, boosting store payroll and adding guards to prevent theft.

The future of self-checkout: adaptation or elimination?

Ultimately, the fate of self-checkout hinges on striking a balance, according to Penfield.

Retailers need to find a system that minimizes theft and employee confrontations without sacrificing customer experience, he said. Technological innovation, like smarter camera systems with improved object recognition and weight verification, may hold the key. Additionally, increased staffing specifically dedicated to self-checkout areas can provide support and deter theft.

While the future of self-checkout remains uncertain, one thing is clear: retailers need to prioritize a customer-centric approach that balances convenience with security. When asked if he thinks we're seeing the end of self-checkout, Penfield said no, adding that it is likely "technology will change. It has to become foolproof," and that we will likely begin to see interventions that aim to find this balance.

Copyright © 2024 Networld Media. All rights reserved., source Industry News