Tired of waiting in long lines at the checkout counter, consumers are more than willing to use self-checkout equipment to speed up their shopping trip. Where available as high as 25 per cent of transactions go through self-checkout systems.
Elsevier Food International, Vol. 5, Number 3, September 2002
David Litwak

Retailers realise that no matter how great a shopping experience they try to provide for their customers, the shopper's last stop can cost the store a good customer. Self-checkout equipment may be a viable part of the solution. "Anything that a retailer can do to reduce the time at the checkout leads to a happier customer," Gary Rhodes of Kroger told USA Today back in June of 2001. Kroger has certainly set about trying to make its customers happy, the chain went from having self-checkouts installed in around 600 of its stores in June 2001 to installing the equipment in 1,350 stores by May of this year. Kroger has over 4,800 self-scan lanes in operation.

A swelling market
Kroger is not the only supermarket chain to embrace self-checkout. According to the Food Marketing Institute (FMI), about 25 percent of their members have already installed some self-checkout equipment. Nevertheless, in 1999 FMI reported that only about six percent of supermarket operators had even tested self-checkouts.
"After a decade of retail hesitancy and limited sales, this category (self-checkout) is coming into its own. Shoppers are now expecting to find a self-checkout option at their local grocery," says Greg Buzek, president of IHL Consulting Group, based in Franklin, Tennessee. IHL recently released the results of a market study entitled, Retail Self-Checkout in North America. "There are 1.9 million lanes using pas devices in North America in the food/drug, department store and mass merchandiser segments. IHL estimates that as many as five percent (95,000) of these lanes could switch to self-checkouts by 2005. Vendors are upgrading their offerings and preparing for higher volume production over the next few years," Buzek says.
According to IHL's report, shipments of self-checkout equipment increased by 162 percent in 2001. However, this growth really reflects the commitment of two large retailers to the technology, together Kroger and Kmart accounted for the majority of the new installations. Buzek sees this trend turning around where now the industry is starting to see many more operating companies who have previously tested the equipment starting to roll it out. "Self-checkout has hit the mainstream, consumers are accepting it and grocery retailers are demonstrating that as high as 25 percent of their transaction volume is now going through self-checkout systems (where available)", Buzek says.

Developments in the US
According to IHL the average self-checkout system costs around $25,000 and with savings in labour, and throughput on transactions the machines should provide a return on investment within 12-15 months.
The two largest purveyors of self-checkout systems are NCR Corp. (Dayton, Ohio) and Optical Robotics Corp. (Montreal, Quebec). According to NCR's Mike Webster, general manager of the company's FastLane self-checkout product line, the company installed about 6,000 units last year, and customer transactions rose from 350 million in 2000 to over 500 million last year. Over at Optical Robotics, the news is similar, the company had over 8,000 U Scan terminals installed in the U.S., with transactions increasing from about 150,000 million in 2000 to over 350 million last year. According to Robin Yaffe, Optical's director of marketing, customer transactions this year are expected to exceed the 500 million mark.
"Since installing our first NCR self-checkout system last year, we have had a tremendous response from our customers, says Bernard Rogan, spokesperson for the Massachusetts-based Shaw's Supermarkets, a subsidiary of London-Based Sainsbury pic. "We are eager to offer more of our customers the convenience of being able to quickly and easily scan and bag their own items."

Self-checkouts in Europe
In Europe, retailers are also just beginning to experiment with self-checkouts. The installed base is much smaller, but the technology also appears to be poised for rapid acceptance. "We recently started representation in the UK," says Yaffe, "and we're getting a lot of positive feedback there."
NCR currently does have a number of installations in the UK, the Netherlands, Germany, France, Italy, Turkey and Australia. While the base is smaller than in North America, Webster says that the interest his company is getting from retailers in Europe and the acceptance of the equipment by shoppers is really growing. "European retailers, having successfully navigated the euro transition, are now eager to explore how self-service technology can enhance customer service," Webster says.
NCR recently conducted a survey among consumers in the UK, Germany and France and found that 71 percent of the respondents would use self-checkout if it were available where they shopped and 41 percent indicated that they would be more likely to shop at a place that offered self-checkout.
"By offering our customers an option at checkout, we are giving them more control over their shopping experience and ultimately providing a greater service," says Evert Jan de Boer, franchisee and owner of Hema Noordwijk in the Netherlands, the first retailer to offer self-checkout in that country by installing NCR's FastLane equipment. "Enabling shoppers to scan their own items can also cut down on wait time."
In Italy, Datalogic uses a handheld scanning terminal that shoppers carry around the store with them to scan their purchases as they get them off the shelves. The Shopevolution self-scanning system is now being coupled with retailer consumer loyalty cards, such as the Conad Loyalty Card from Le Querce supermarkets to access the "Spesa & Vai" (Shop & Go) service, which scans the purchases as customers walk around the store, adds in any promotions and totals the bill.

New technology
Self-checkout has been available for well over a decade, but has just started to become commonplace in stores during the last two or three years. There are several reasons why the time is right now for the acceptance of self-scanning by both consumers and retailers. First of all, the technology has become much more user friendly with multimedia monitors prompting the shoppers through the process, the labour shortage has become more acute, making cashiers harder to find, and the pressures to get any sort of competitive edge on the store down the road have all helped to drive retailers towards self-checkout. From the shoppers' point of view, self-checkout now seems much less imposing than it would have even just a few years ago. Consumers are quite familiar with ATMs, and pay-at-the-pump technology. They buy their movie tickets at kiosks, so the leap to self-checkout has already been partially bridged for them.
There have been some recent changes in the technology offered by the major suppliers of self-checkouts. In February Optical Robotics launched its next generation of U Scan equipment. The most noticeable difference is that the new machines are much smaller than their predecessors are. This allows the retailer to put in more units in the same amount of space. The U Scan's four terminal If-shaped formation can place four lanes in the area previously devoted to two traditional check lanes. The company has also released a new Mobile Attendant, which allows the supervising cashier to move freely wherever he/she is needed and still monitor all the transactions from a hand-held "Palm-type" terminal. FastLane from NCR is a more modular unit where the operator can upgrade his self-checkout lanes to suit the changing needs of his store and shoppers. This feature, according to Webster, allows the store to keep pace with their shoppers without losing any of their original capital investment.
Symbol Technologies, maker of bar-code readers has a handheld self-scanning device, called the Personal Shopper that shoppers can use to scan their purchases all around the store. Symbol is the leading proponent of portable self-scanning in the U.S.
In a move to combine the benefits of both stationary self-checkout and portable self-scanning, Symbol and Optical Robotics have begun testing the feasibility of combining the two technologies. Unveiled at May's FMI Show in Chicago the two plan to test a system where shoppers could use the portable device to record items they wish to purchase as they place them in their basket, and then take the receipt issued by the Personal Shopper to a U Scan terminal at the checkout area, where they can complete the transaction.