Palmer Retail Solutions Blog

Self Checkout: The Pros and Cons of Giving the Customer Control

Posted by Kathy Heil on Oct 31, 2018 2:02:57 PM

Self Checkout

Self-checkout continues to grow in popularity among retailers because today’s customers like the idea of a shopping experience tailored to their personal needs and desires. And these days, experience drives repeat sales and long-term loyalty. But, is self-checkout really all it's cracked up to be?

Here are the major pros and cons to giving customers control at checkout.

Retailer Benefits of Self-Checkout

While it may seem like all the benefits of self-checkout target consumers, there are several advantages for retailers, too.

  • Happy customers. According to a recent SOTI survey, 66% of consumers prefer self-service over interacting with a store employee. Why? It is faster. Even in peak periods when there is a line, studies show shoppers can scan their goods, pay, and get on with their day in much less time. That’s a plus for your brand, and it could be a distinct competitive edge. It also means you can complete more transactions per hour.
  • Better use of space. This one seems obvious. As many as five or six self-checkout kiosks can fit in the space needed for just one traditional cashier system. Recouping that much floor space to repurpose for sales could give your revenue a big boost. This is especially true for smaller-footprint stores.
  • Better use of personnel. A single employee can supervise a half dozen or more self-checkout stations, assisting customers as needed. Therefore, switching to at least some DIY units could significantly lower labor costs.

The Downside to Self-Checkout

Of course, it's not all good. Self-checkout has its disadvantages for retailers, too.

  • High up-front costs. Installing self-service systems costs several times as much as standard cashier lanes. Will you save enough in money and floor space to warrant that? ROI may be easier to earn if you have multiple locations.
  • Theft. This is a serious and growing concern among retailers who have implemented self-checkout. Without much supervision, customers can easily switch price tags or fail to scan every item. And outfoxing self-checkout units is keeping pace with security innovations. One extensive study revealed an average 4% loss based on total merchandise value — that’s higher than profit margins for most retailers.
  • Unhappy customers. If 66% of consumers like self-checkout, 34% do not. Human interaction plays a big role in customer experience, so a size-able group of shoppers still wants to mingle with an associate at the checkout lane. You have to cater to these customers, too. That’s why most stores that have introduced self-checkout also retain traditional cashiering stations.
  • Equipment malfunctions. Machines can be touchy, and some transactions cannot be completed without the help of an employee. And some issues are simply user error. This frustration can nullify the better experience self-checkout promises.
  • Dehumanizing your store. With self-checkout, customers can easily get what they need and pay without any human contact. Eliminating the opportunity to exchange smiles and a few friendly words makes it harder for people to engage with your brand. With no emotional attachment to your store, they might as well shop somewhere else.
  • Layoff backlash. The opportunity to save money by reducing labor costs is tempting, indeed. But layoffs can anger customers or the entire community, resulting in brand damage. This is a key reason why Ikea and CVS eliminated their self-checkout stations. Taking note, savvy retailers are retaining employees no longer needed as cashiers and putting them to work in other areas. Interacting with customers, for example.

Is self-checkout right for your store?

If you're wondering whether self-checkout is right for your store, ask yourself two things:

  1. What do you sell? Products that are easy to handle, scan, and bag are most conducive to self-checkout. Restaurateurs are also offering self-service tablets for customer ordering and payment.
  2. Who is your clientele? If grab-and-go convenience is your hallmark (or important to a segment of your customers), then self-checkout makes perfect sense.

Adding value for your customers is crucial to remain competitive. But before you adopt self-checkout, consider all the pros and cons to be sure it will be a good financial investment as well.

eBook Download Retail Psychology

Tags: Customer Experience