SUPERMARKET SELF SUFFICIENCY

Front-end self checkout appears to be a growing trend in the nation's largest retail operations, although there is still some resistance and skepticism from smaller retailers. According to Falls Church, Va.-based Food Marketing Institute's 1999 In-Store Systems Study, 14% of companies with 11 or more stores reported using self-scanning checkout devices in about 25% of their stores. In contrast, this

Front-end self checkout appears to be a growing trend in the nation's largest retail operations, although there is still some resistance and skepticism from smaller retailers. According to Falls Church, Va.-based Food Marketing Institute's 1999 In-Store Systems Study, 14% of companies with 11 or more stores reported using self-scanning checkout devices in about 25% of their stores. In contrast, this technology has been in operation in Europe for the last decade and has expanded dramatically in the past four or five years.

One of the major issues contributing to the earlier and greater acceptance of self checkout in Europe is a higher population density serviced by fewer supermarkets, a situation leading to the need for faster service. Introduction by retailers and acceptance of automated checkout by customers was also fostered by the regulation of store hours that often led to long checkout lines being the standard customer experience. Automated front-end checkout has helped ease this problem.

In North America, by contrast, there are more and larger supermarkets that operate with less regulation of store hours. As a result, there has been less of an industry-wide push toward self checkout.

Despite the lag in implementing this technology in North America, industry consultant Richard Sarkissian of Deloitte and Touche Consulting Group notes that "self-checkout is moving from the 'test' stage and into the mainstream." A number of national retailers are currently using automated self-checkout technology, and other retailers report plans to expand its use in the future.

An industry source preferring anonymity foresees a near future in which most stores will offer some variation of self-scanning installations. Sarkissian's expectation is that not more than 25% to 35% of lanes will carry self checkout.

One of the trends in the current expanding use of stationary front-end self-checkout units is that they can now support all transactions: cash, debit, credit card and loyalty programs. Newer versions of self-checkout technology also convert back and forth from self-scanning to cashier mode.

Results of tests show that self-scanning works very well in high-traffic, low-average order environments, enabling fast flow in a high-density setting. Current product development is working toward large lane solutions. What is being looked for here is the ability to switch between high- and low-average order lanes depending on the needs of the store.

Where front-end self checkout has been introduced, customer resistance is minimal to nonexistent. "Technology doesn't awe people, especially in the last 10 years or so," said John Sarno, vice president of information systems for Big Y Foods, Springfield, Mass. Regardless of age, people who are comfortable with the technology are going to use it and enjoy it, he said.

"It is incredible how fast seniors pick it up. They like it because they have control," said Thomas D. Murphy, management consultant for Colorado Springs, Colo.-based Peak Tech Consulting. "They know what they are spending as the groceries ring up. When they are close to being out of money, they can stop without being embarrassed," he said.

Where in-store credit card use is higher, better customer acceptance of self checkout seems to follow. John Mahar of Green Hill Farms, an independent retailer in Syracuse, N.Y., remains skeptical. He doesn't feel that self-checkout "offers that much of a benefit to the customer." Nevertheless, many customers perceive self-checkout as an improvement that enhances the shopping experience, according to observers. Because they are busy during checkout, time appears to go faster, and customers consequently feel they have better service.

Given the high turnover rate of front-end personnel, self checkout has the potential for labor savings, observers note. This potential can be realized at the point when one person oversees several automated lanes. However, in those cases where customers are still becoming familiar with the system and one person per lane is required to assist with transactions, this potential is not yet fully realized. \

Sarkissian says "self-checkout also helps defend supermarkets from on-line competitors," where the customer is in total control. The perceived advantage of self checkout to customers is that they have more control over their checkout experience, and checkout goes faster, he said.

On the retailers' side, the past year has seen more openness toward self checkout. This has been aided by the next generation of hardware that has both reduced the cost of initial investment and the number of multiple purchases of equipment. However, for some retailers such as Albert E. Lees, Jr., president and chief executive officer of Lees Supermarkets, Westport, Mass., the "price is prohibitive, and we have no plans for using this technology."

But Marv Imus, vice president and owner of Paw Paw Shopping Center, Paw Paw, Mich., said his "feeling is that consumers are getting more and more comfortable with using the technology." He said he will probably add self-checkout units by early next year, despite the cost of installing new software to support such a system. In general, as the cost of self-checkout systems continues to come down and customers become more familiar with them, it's expected that the number of units in the industry will rise.

An additional trend exists in the industry toward the use of portable handheld self-checkout systems. This is now more viable due to advances in technology, programming and equipment over the past two years. Portable self-scanning units now facilitate interactive customer transactions and provide the retailer with the ability to enhance existing marketing programs by putting them into the hands of the consumer at the point of decision. By linking this technology with frequent-shopper and loyalty programs, a new level of enhancement can be reached that is based upon an individual's shopping patterns, according to observers.