Measuring the Success of Self-Checkout Investment

 

For some reason over the last few months I have found myself at the grocery store with my wife close to a dozen times. Usually, we go to the store to purchase the groceries needed to prepare for dinner that night. We do these small trips so often that we’re always trying to get in and out quickly. The first couple of times, we made our way to the Self-Checkout (SCO) line and found it to be the most inconvenient experience. The “friction” – the industry term for difficulty checking out – that we experienced has made using the SCO line a serious gamble when compared to waiting for the cashier. Issues we have encountered include:

• SCO systems are not ideal for shoppers using reusable shopping bags
• Starting to checkout before putting a bag on the scale
• Scanning the next item before fully bagging the previous item
• Not enough space on the basket or bagging scale
• Buying alcohol and having to wait for the attendant to come approve the transaction

My wife blames the issues on the two-person involvement (me) and now I stand three feet away from her while she completes the transaction. Regardless, it has not been a seamless process and we both perform a massive mental calculation that involves the length of the lines at the cashiers, average speed of cashier lines at this store, the fullness of the baskets in line ahead of us, the length of the line for self-checkout and whether or not we have alcohol in our basket. All of these factors weigh into our choice of which line to enter and our overall customer experience at a given store.

I share this story because here at Taiga many of our clients and prospects are either using or exploring some form of SCO. Vendors promise big ROI from reduction in labor costs and increased customer satisfaction. As we have worked with our clients to help them measure and analyze their ROI, it is no surprise that customer utilization is the key factor. What is surprising is the disparity in utilization rates across our clients. We have some clients who are successfully driving over 30% of their in store transactions through SCO while others are down in the single digits. SCO vendors would like you to think that it is a result of the slick technology and pleasing design of their products; however, we have learned that savvy operators have combined their implementations with our analytics and operational strategies to influence that mental math calculation that determines whether customers choose to use SCO.

The operators driving their utilization over 30% view their SCO as a process for ongoing improvement, not a one and done investment of a new system that is left to sink or swim. They watch the performance of certain metrics that we have helped them identify where and how they can improve utilization. Examples of some of the metrics they look at include:

1. Self-Checkout Utilization – This metric answers the question “Are customers using the SCO?” It is a baseline that tracks the percentage of total in store transactions completed through SCO.
2. Long-Term Customer Adoption – This number answers the question “Are customers
   using SCO again?” It tracks the number of customers that have fully adopted SCO and whether you are trending upward or down.
3. SCO Product Mix Analysis – This report answers the questions “What products do customers buy via SCO and how are they different from the product mix being purchased from your cashier?” “Are they afraid of age-restricted purchases?” “Are my promotions that drive customers to SCO working?”
4. Customer Traffic Analysis – This helps you understand “What time of day is SCO used most often and what other traffic patterns seem to be influencing SCO utilization?” This analysis is the key to optimizing labor costs while improving customer satisfaction at the same time.

Successful operators combine the information from these metrics with other operating decisions to refine and improve the SCO experience on an ongoing basis. They may use promotions to get customers to try SCO or, more importantly, adopt it as their preferred checkout method. The ability to measure the performance of the technology and the choices customers are making is as critical to the success of the SCO investment as the selection of the technology itself.

If you would like to understand how Taiga partners with our clients to provide the ability to track and improve the performance of their SCO investment, please contact us. We would be happy to share our experience with you and walk you through the capabilities of our product.

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