According to surveys, 60% 1 of people are irritated with long checkout lines. Self-checkout units are installed to prevent the long queues at the market and improve the shopping experience. Today, self-checkout systems continue to attract tech giants like Amazon and Walmart.
This article explains self-checkout systems with all different approaches to self-checkout and highlights the advantages and challenges of these systems.
What are self-checkout systems?
Self-checkouts (SCOs) are machines customers use to complete their purchases. The machines remove the traditional staffed checkout. Self-checkouts are also known as assisted checkouts (ACOs) or self-service checkouts.
With Self-checkouts, customers grab the products, and scan them through barcodes. They complete their shopping without any assistance. Self-checkouts are commonly used in supermarkets. One or two staff members supervise Self-checkout areas to assist customers in case of problems.
What are the different approaches to self-checkout?
There are different self-checkouts with various approaches. All these approaches have their unique pros and cons:
Some convenience stores have already been using self-checkout machines in their stores for a few years. They have some advantages:
- Shorter lines and faster checkout
- Improved privacy
- Greater accuracy
- Reduced labor cost
- Better in-store optimization thanks to the availability of new space with a reduction of queues
- Improved Customer experience
Despite the advantages, the implementation costs are high. A typical four-lane setup costs $125,000 to install. 2
Self-checkout units with RFID
Retailers can label all their products with RFID tags. When customers place their shopping bags on the counter, all the products get scanned at once without any effort and the counter displays a full list of the products and total price.
This technology reduces the time spent on the entire checkout experience to 30 seconds.
For this technology to work, all items need to be tagged with RFID tags and these potentially expensive checkout machines need to be installed in stores.
Vending machines automate the checkout experience and is potentially more secure than other approaches. However, vending machines put a glass between products and customers and do not allow them to touch products before buying. In addition, these machines are also expensive hardware.
Barcode scanning solutions
Snabble is an app that enables customers to scan their purchases in retail stores, pay online and then walk out. 5 The app is in use in markets called Knauber in Germany and Frankfurt <IKEA. Though the Snabble app is good overall, there are some problems while reading barcodes, such as
- The low print quality of a barcode is too low
- Low quality of your mobile phone camera
- Specific barcodes are not priced in the system.
- The system also provides limited security for retailers as end users are in charge of the whole process.
Self-checkout vs. Checkout Free systems
Checkout-free stores are a different approach to self-service checkout. In this approach, customers do not line up to scan their items. The products they grab are identified, and the bill is directed to their phone automatically. You can grasp more about checkout-free systems in the comprehensive guide article.
There are 2 types of vendors in checkout-free systems. The first one develop and install the technology to use it in their company stores, such as Amazon Go, Walmart, and Standard Cognition. The other type of vendor develops systems to provide white-label solutions for third-party stores. Grabandgo and Trigo Vision are known examples.
Feel free to explore more in our article covering examples from most supermarket chains.
What are the disadvantages?
Even though it sounds amazing and provides a peerless customer experience while reducing labor costs, it has some disadvantages.
- All purchases and transactions are made online with pre-registered credit card information. Some users will be reluctant to get their credit cards stored
- Inventory Loss No matter how advanced the technology is, there will be people trying to steal because employees are unable to monitor customer transactions as closely as self-checkouts. While some technologies try to minimize theft, some technologies such as barcode scanning solutions rely on users’ compliance.
- Lack of Personal Interaction
- Although the key benefit is eliminating customer engagement to decrease waiting times, customers may prefer to have a one-on-one interaction with cashiers.
- Implementation difficulties
- Sometimes bar codes and coupons don’t scan properly, some products such as alcoholic beverages require age verification, or customers need assistance.
Interested in trying this out at your business and looking for an AI vendor? Let us know
Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month.
Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.
Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.
He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.
Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.
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