Self-pay tech ‘could hit retailer profitability’

While self-scan and self-pay technologies (SCO) have been shown to enhance the customer experience and offer retailers productivity savings, they may also have a negative impact on profitability and security, according to new research.

Checkpoint Systems, ECR Community Shrinkage and On-Shelf Availability Group analysed data from 13 retail companies based in the US and Europe and two suppliers of SCO technologies, revealing that a greater use of SCO technologies resulted in higher rates of retail loss.

The research included three types of SCO systems: fixed (the consumer scans items at a self-service kiosk), Scan and Go (the customer is supplied with a scanning device provided by the retailer) and Mobile Scan and Go (the customer’s own mobile device is used as a device for scanning items).

It found that stores where 55 to 60 per cent of transactions went through fixed SCO saw retail losses increase by 31 per cent, while Scan and Go systems were likely to result in increased losses of up to 18 per cent more than those retailers not using SCO technology.

While the adoption rate for Scan and Go technologies continues to be low, accounting for only 2.82 per cent of all transactions recorded by research participants, the research found use of the technology resulted in high levels of customer error. In fact, the greater the quantity of products in the shopping cart, the higher the risk of either scanning an item more than once or not scanning an item at all.

The report found that in a shopping cart containing 50 products, there is a 60 per cent chance that there will be at least one error made, while in a shopping cart containing 100 items there is a 90 per cent chance that the shopper will have made at least one mistake.

According to the ECR, the most likely causes of losses relating to SCO technologies include failure to scan items, mis-scanning items - for instance, scanning a kilo of grapes as one kilo of carrots - walking away before completing the payment process, incorrect scanning of promotional or multi-variety products, barcode switching and coupon fraud.

The extent of the potential loss suggests that there is still much work to be done to ensure SCO technologies are delivering the benefits anticipated by both retailers and technology providers.

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