Recent actions would appear to indicate that some retailers have begun to back away from self checkout (SCO). CNN, Business Insider and The Atlantic all reported that Walmart, a known innovator in retail technology, had pulled self checkout from their stores. The Atlantic called self checkout a “failed experiment”, while CNN claimed that some retailers were “re-thinking self checkout” as it had not met their expectations. It seemed that retailers were backing away, counter indicating surveys like this one that predicted a CAGR of 10.3% between 2021 and 2028, and found that 67% of millennials preferred self checkout. What is the true story with self checkout?

What self checkout promised to retailers

Since self checkout was first introduced in the 1980’s, the promise to retailers was a net reduction of in-store staff; for many, the biggest operational expense. This was extremely attractive to retail leadership, as margins in retail segments such as grocery were chronically thin. Even in the best of times, finding quality employees to work in retail was often challenging. These self checkout systems were sold to retail leadership with headcount reduction as core value proposition, a benefit CEOs could hardly ignore.

The problem is that it turned out not to be true for several reasons:

  • At least one employee was needed to staff self checkout for questions, clearing errors, and alcohol sales.
  • Member stores like Costco had to assign employees to the lanes to keep non-members from checking out.
  • In some areas inventory shrink nearly doubled, due to checkout errors and theft related to self checkout. More employees were needed to watch doors and monitor floor activity.

Generally, the numbers for some retailers showed negligible gain or reduction of headcount from self checkout, so why keep them?

The real story on self checkout

According to a recent survey, 85% of shoppers have used a self-checkout system at least once. Over 40% of all shoppers prefer self checkout, while 67% of millennials think they are more efficient. Self checkout has many advantages for the shopper:

  • When the shopper has a particular system “figured out”, they are much faster for a few items, and lines are shorter.
  • They are very much appreciated when the shopper is buying a frangible product such as an ice-cream cake or sushi.
  • Interaction with employees is minimized, a holdover from the Pandemic.
  • Shoppers appreciate privacy when purchasing personal products.

The truth is Walmart pulled self checkout from only 3 of its over 4700 stores for undisclosed reasons. It was not a rejection of the technology by the leader in deploying retail technology. Other retailers are re-thinking the business case for retail self checkout, and in some cases making changes to store layouts and the customer experience, adjusting their approach rather than abandoning it. Walmart has clearly not abandoned self checkout, and other chains appear to be reconsidering the business case for self checkout.

The new business case for self checkout

For any one retail chain, depending on size and offerings, the business case can vary widely. However, in any event will probably include the following:

  • The customer experience is the main concern.
  • Customers don’t like to wait; in many surveys this is their number one issue.
  • For retailers like Smart&Final, it is not atypical for 3 or 4 customers who are buying lunch to arrive shortly after two customers each with $800-$1,000 in purchases. While the big-ticket customers contribute substantially to cash intake, their visits are generally more infrequent. Frequent customers purchasing a few items are an important part of the in-store sales revenue picture.
  • Retailers want to adopt a flexible strategy for store staffing that optimizes head count and ensures that neither group must wait.
  • Retailers also want to implement barriers to crossover such as self checkout stations with minimal footprint, which are not convenient for large numbers of items purchased.
  • Retailers may consider special store hours or dedicated POS terminals for big-ticket customers who have a membership or store account.

Indeed, self checkout hardware vendors such as NCR, CPI and Toshiba are building their respective messages around a better customer experience, which means optimum time spent, minimal hassles for big-ticket clients and people on the go.

Self checkout will continue to be deployed by retailers. What does that mean for in-store network wiring, especially if it requires structured cabling?

Integrating self checkout POS systems into the structured cabling design

As retailers adopt and modify their self checkout initiatives, structured cabling installers are tasked with a variety of in-store operations:

  • Self-checkout replaces some number of existing registers. Generally speaking, more self checkout systems can be placed in the same footprint as traditional POS. However, there is a net increase in the amount of services that need to be pulled in, including network service from the most available telecommunications closet.
  • Floor space is set aside for the new systems. Existing systems may be serviced by wiring channels embedded in the slab. If those channels are not accessible, installers must adapt new solutions, which may include overhead wiring.
  • More self checkout systems are added. When the initial self checkout systems are installed, it is essential for the installer to allow for expansion. Allowing for sufficient additional capacity calls for close coordination with the client and an understanding of their expansion plans.
  • Self checkout systems are moved. The installed systems need to be moved to another location. Additional network service is not required, however some existing wiring may be terminated and removed if possible, and new wiring added.

No two situations are alike, and it is very important for the cabling installer to consider each project as a design project. Simply repeating the previous installation project does not account for the uniqueness of the situation, nor does it take advantage of previously unavailable opportunities. Knowing what to do and when to do it requires experience and commitment to the client’s best interests. With over 30 years of experience in structured wiring design, Telecom Designs is the structured cabling partner that major retailers rely on. Contact us today and tell us about your self checkout plans.

For insights on streamlining self checkout in your retail chain, read our whitepaper.