Best Practices in Implementing Self-Checkout

Introducing self-service technology can reap enormous benefits for retailers if implemented strategically, keeping in mind the store's current business model, culture, clientele and goals. For convenience stores, incorporating self-checkout systems can dramatically improve store operations, revenue generation and customer satisfaction. According to research conducted by The NPD Group for NCR Corp., two out of three consumers would prefer to have self-checkout available when they shop in a physical store. And, for the most part, the "convenience store culture" is uniquely suited to embrace and benefit from self-service technologies, like self-checkout.

Caters to On-the-Go Environment/Customers
First, convenience stores are already equipped with "serve yourself" features like ATMs, pay-at-the-pump gas, and self-serve coffee and food stations. Not only do customers enter convenience stores expecting to serve themselves, many prefer it. In fact, that same research study by The NPD Group found that more than half of consumers find having the option to use self-service kiosks and/or self-checkout is important for creating a positive experience, and one out of five find it to be extremely important.

By nature, convenience store customers are on the go, looking to pick up a few items quickly and get on their way. Technologies, like self-checkout, that support and maximize this expedited business model are good solutions for convenience store retailers looking to optimize customer satisfaction and create a positive "serve yourself" experience.

Short lines, quick transaction times and efficient staff assistance when requested are critical to securing repeat customers. If the typical on-the-go convenience store customer finds that they are frequently slowed down by waiting for a parking space and then standing in line to check out, they will find a convenience store that better caters to their needs.

Allows Redeployment of Resources
The typical convenience store customer does not want to wait for service. Most convenience stores operate with very limited staff -- often just one employee working at a time -- and limited time for customer related tasks such as checkout, restocking refrigerators and shelves, brewing coffee and replenishing fountain modules and hot/prepared food. This doesn't include other duties, including cleaning the store, handling vendor orders and correspondence, emptying trash containers and checking on gas delivery.

With self-checkout systems in place, busy convenience store staffs will have more free time to offer personal assistance when requested, delivering better customer service as needed.

Drives Repeat Customers & Long-Term Gains
Offering self-checkout has a wide-ranging, positive impact on the customer experience. Introducing self-checkout systems not only improves store operational efficiency and customer satisfaction, but also increases revenue generation. C-stores experience peaks in customer flow, and must keep checkout lines moving to maximize the number of transactions and decrease the number of walkaways.

When customers in a rush see a long, stagnant line, they will leave. Fifty percent of c-store customers admitted that they became so frustrated waiting in a retailer line that they walked out without completing their purchase, according to the 2008 Maritz Poll, "Are Checkout Lines Affecting Retailers' Bottom Lines?"

Delivering a fast checkout process is critical to fostering repeat customers who know they can expect a quick stop at the store. Selecting reliable, state-of-the-art self-service technology that has minimal disruptions and fewer equipment failures will facilitate quick transactions, keep lines moving and reduce parking lot and in-store congestion. Overall, customer flow is improved by speeding up point-of-sale transactions. Self-checkout allows for more customers per hour and therefore, the opportunity for increased sales.

In the May 2010 issue of Convenience Store News, Maria Fidelibus, vice president of technology for c-store chain Quick Chek, said "self-checkout has allowed the stores to handle more customers during peak periods, while reducing checkout lines and parking lot congestion; increased the number of transactions completed hourly … allowed store employees to complete tasks in the store rather than having to stop and assist during the checkout process."

Retailers can redeploy staffs who would have previously worked at checkout stations during peak rush to assist customers as they shop, improving the customer's experience while in the store.

One Size Does Not Fit All
Once each retailer determines that self-service technologies are appropriate, creative integration based on each store's unique needs will be important to success -- one size does not fit all.

C-stores should closely review their POS transaction logs (T-logs) and evaluate analytics to determine if self-checkout is an appropriate addition to the store's infrastructure. Analytics include volume of transactions, average amount of each purchase and purchase methods. This data helps determine which self-service hardware and software best fits the store's needs and how many systems will offer the best return on investment.

Implementation is also an important consideration when adopting self-checkout systems. Placement, front-end integration, and aesthetics like color and size have a significant impact on how the technology is received by customers and how valuable the systems are for revenue generation. For example, c-stores are small and space must be maximized. Effective integration of self-checkout systems makes the best use of limited real estate and positions the hardware in a manner that increases sales. The latter can include arranging smaller, last-minute purchase items like candy and gum around the machines.

Quick Chek demonstrates a successful model of a store that effectively implemented self-checkout and has benefitted from the investment. Working with its technology provider, Quick Chek selected self-checkout systems with a sleek, "saw-tooth alignment" to match the look and feel of their stores. With candy racks placed around the machines to make the best use of space, the POS station offers a welcoming, visually pleasing transaction point.

In sum, c-stores have the potential to see great benefits from the implementation of self-service technologies. Self-checkout systems are well-suited to fit consumer demands, business operations and the existing "culture" of a typical c-store. However, retailers must understand and consider their business analytics and clientele preferences when selecting and incorporating self-checkout systems to ensure the greatest return on investment.

Rick Chavie is vice president, marketing, retail and hospitality solutions, for NCR Corp. He brings extensive experience in global retail industry roles with major service providers and retailers. He has served as senior vice president for Industry Solution Management at SAP where he created a new vision for SAP's retail industry leadership and global innovation; led Strategy and International for The Home Depot including responsibility for Home Depot's China entry, and played a key role in developing Accenture's retail consulting practices in Germany and Japan. A Fulbright Scholar in International Trade, Chavie holds a bachelor of arts degree from the University of St. Thomas (Minnesota) and a master's of business administration degree from the Harvard Business School.