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Here to stay

Written by David Adams
11/01/2010

With the likes of Tesco and Asda trumpeting impressive growth, self-service is certainly in fashion, David Adams finds.

Just how important to the success of a retailer is the quality of customer service on the shopfloor? Perhaps I'm maligning supermarkets unfairly here, but surely the way they tend to process customers at the checkout might be an another reason, in addition to the potential for cost and efficiency savings, why self-service checkouts appear to have passed the tipping point in this part of the retail sector.

There's been a spike in uptake recently, with an increase of 55 per cent in the number of self-checkout units in use during the first half of 2009, according to NCR. It has the lion's share (80 per cent) of the UK self-checkout market; its SelfServ technology is now used in more than 2,100 stores, including almost all Tesco and Asda outlets, along with many Sainsbury's and Marks and Spencer stores. Elsewhere, B&Q and Wincor Nixdorf have developed units with security scales that can cope with the wide variety of shape and weight of goods sold by the retailer, including bags of cement. There will be around 7,000 self-checkout units in use in the UK by the end of 2009, with that number set to reach 15,000 by 2013, according to analysis from Retail Banking Research.

In October, a Tesco Express store in Northampton became the first shop in the country with no manual checkout: just five SelfServ tills. The Daily Mail, in its characteristically calm and level-headed way, announced that this "sounded the death knell for checkout workers" and that "critics" were suggesting this "marks the end of basic human intervention during weekly shopping trips and could eventually cost thousands of jobs". (It didn't name these critics or quote directly from them.)

NCR is quick to point out that UK supermarkets recruited 27,000 permanent store staff in the first half of 2009. It claims that self-service units free up more staff to man conventional tills; and that staff supervising said units (usually on a ratio of one person for each four units) have more time to interact with customers than do cashiers under pressure to work through a long queue of shoppers.

Richard Dodd, spokesperson for the British Retail Consortium, also dismisses the Mail's assertions. "This doesn't mean mass redundancies for checkout staff," he insists. "Technology developments often mean in industries of all kinds is not fewer people being employed, but people being employed to do other jobs. And there's still a tremendously important role for staffed checkouts."

But the main reason retailers invest in this technology is not so they can sack staff or because they don't care about customer service. Once shoppers get used to self-service they can scan and pay for their shopping pretty quickly; and because these units have a smaller physical footprint than manned tills, you can squeeze more of them into the store. Both those things mean shorter queues. Improved technology may also be helping drive adoption. NCR has solved one problem that used to lead to frequent and irritating 'Unexpected item in the bagging area' messages - and rather undermined retailers' green credentials - there's now an 'Own Bag' button that means customers are not forced to use a new carrier bag each time they use the unit.

Meanwhile, coin hoppers mean loose change can be loaded into the machine more rapidly; while the new version of NCR's SelfServ unit can recycle coins and notes, reducing workload for cash office staff and meaning machines can be replenished with change less frequently.

Pretty much all retailers using self-service, including both Boots and B&Q as well as the supermarkets, report favourable reactions from customers, on speed and queue reduction grounds. James Airey, process improvement manager at Asda, points to research the retailer commissioned from Illuminas that shows 92 per cent of customers using self-service checkout like doing so.

He has been managing the implementation of these machines for just over two years, but Asda's first units were implemented in 2004. "It was quite a slow roll-out to start with, but in 2006 the business saw the potential to roll-out aggressively to 200 stores," Airey explains. "We now have them in 99 per cent of the supermarkets. That will be 100 per cent by the end of March - it's actually just three stores left now that don't have them."

He says Asda uses the machines in part because it helps reduce queue size in crowded stores. Four million of its customers now use self-service each week - about 23 per cent of total transactions and 30 per cent of the transactions in main till banks. The average number of units in a store is nine, the minimum four, but in one store at Keighley in West Yorkshire there are 22.

The grocery giant has also rolled out self-service units for customers with trolleys in seven stores at Ashford, Boldon, Crawley, Derby, Grimsby, Keighley and Oadby ("Customer feedback's been great!" says Airey.); and is trialling self-service in the food-to-go areas at Eastlands in Manchester and at Keighley, to reduce lunchtime queues: roll-out is expected to continue next year.
Could he imagine Asda opening an entirely self-service store? "I think so," he says. "Customer demand would need to be there, but if the opportunity came up, maybe with a smaller store, probably in the London area, I think it's something we'd consider."

Security issues


There are still some security concerns in relation to self-service. Customers have been known to scan the barcode of a cheaper item than the one they actually place in the bag, enabling the substitution of vintage champagne for the a cheap sparkling wine the machine thinks is being purchased. Some machines' security scales are temporarily disabled when the customer hits the 'Finish and pay' button, allowing illicit bagging of further items. Problems can also arise if the supervising member of staff is in collusion with the customer, or if the supervisor is distracted by a problem at a unit (whether or not a diversion has been created deliberately).

"Retailers need to be up-front with suppliers about those risks," says Kevin Eley, head of business development at loss prevention specialist, Sysrepublic. "When we work with retailers we go into the store and run through all the ways employees and customers could interact with the checkout to identify flaws in their processes. Then we help retailers understand clues in the data to find out when and where those risks are being exploited."

But successful deployment of self-scanning technologies can also form the foundation for more ambitious projects that aim to improve the relationship between the customer and the store. French hypermarket Géant Casino worked with Datalogic to develop Scan'Express, a self-scanning project for loyalty card scheme members based on handheld terminals and radio frequency (RF) technology, launched in 2004.

The system is based in part on trust. Customers who sign a user agreement are free to log on to a handheld terminal at the front of the store and then use them to scan the barcodes on goods. Once they finish shopping, customers head to dedicated Scan'Express tills, where an algorithm-based system selects some of them for spot checks. The fewer the errors that show up on these checks, the less likely it is that the customer will be chosen to be checked by the algorithm in future. Roll-out began in 2005 and the solution is now used in 90 per cent of Casino Group hypermarkets.

"We invested in the technology to give customers the ability to control the value of their basket; and to create goodwill - because we are really saying to them, 'we trust you'," says Alain Berne, IT front office store manager at Casino Group. "The customers like it; they want to use it. We have noticed that it seems to be converting occasional shoppers into people who come more often: they are tending to become more loyal."

The retailer is now testing the effectiveness of a more advanced version of the system at the Géant Casino Odysseum hypermarket in Montpelier, using Datalogic's JOYA personal shopper device, which offers additional interactivity options including access to extra promotional information and a shopping list service integrated with the retailer's website and loyalty scheme. Datalogic could also incorporate contactless NFC (Near Field Communication) technology into the JOYA, making payment even faster.

Interestingly, one of the closest things we have to this kind of implementation in the UK is Waitrose's Quick Check scheme, originally introduced in 1996 and now used in 116 stores. "Customer response has been very positive," says a spokesperson for Waitrose, again citing the fact that shoppers can finish shopping more quickly as a key benefit. "Quick Pay also makes shopping even quicker for Quick Check customers - this is where they can simply swipe their debit or credit card at the Quick Pay unit before taking their shopping home. This is also a very popular service."

The retailer doesn't, however, have any plans to use self-service checkout technology at this moment in time. What does this teach us? Well, retailers have woken up to the fact that some shoppers value electronically-aided convenience more than being served by a friendly (or unfriendly) human being. It's also getting harder to criticise self-service checkout technology, while those retailers using additional self-service tools seem to be benefitting from doing so. While it's not yet clear what effects this will have on the nature of customer service, or for the job prospects of those who work on manned checkouts, one thing's for sure: the machines are here to stay.


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