Self checkout markets ride growing retail trend

In 1998, I came across the first self checkout system I had ever seen at a National Automatic Merchandising Association (NAMA) convention at McCormick Place in Chicago. It was a company called Smart Vending Solutions Ltd. based in Israel. The system involved going into an enclosed area using an access card, selecting the products, paying for the products, and then exiting the enclosed area. The system seemed to be designed primarily to prevent theft.

times have changed

Times have certainly changed. Self checkout systems are expanding rapidly from coast to coast. In a self checkout market, a customer picks products from open racks, coolers, freezers and bins, then scans the UPC bar code or RFID tag for each product at a payment kiosk. They pay with a single payment, be it cash, credit card or stored value card.

In showing a prospective customer a self checkout system at an existing location, I witnessed how the consumers at the location were happy to demonstrate how fast and efficient was the selection and payment process. The operator did not have to say a word: the consumers themselves were selling the self checkout system. When did this ever happen to you, as a vending operator, at a vending location?

Self checkout is expanding in a variety of retail environments, and as it does, we can expect the acceptance of self checkout markets to increase. In the meantime, vending operators have plenty of questions about these formats. The purpose of this article is to educate vending operators about the operations and economics of these systems.

Before examining the benefits these systems offer to vending operators, I think it’s important to note that self checkout is not happening in a vacuum. Retail self checkout is evolving quickly, and as it does, the acceptance and demand of the systems that vending operators are using will grow.

The other day, I went grocery shopping at our local Stop & Shop supermarket. Upon entering the supermarket, my wife and I scanned our Stop & Shop card and obtained a “Scan It” gun and started shopping. The Scan It gun quickly scanned all the UPC labels on the product packaging. We placed the scanned products in our “green” shopping bags we had brought into the store.

Any products that required preparation at the fish or meat counters were wrapped with labels with prices and the UPC for scanning. Fresh fruits and vegetables had numbers affixed to the bunches. We went to the readily available scales, entered the number, weighed the product, generated a price/UPC label, placed the product in a plastic bag, affixed the label to the bag, and then scanned the label. If the fruit or vegetable did not have a number, the scale had icons describing the product from which you could generate the appropriate price/UPC label.

A display on the scanning gun enabled us to track our purchases by unit and price. Periodically, special promotions appeared on the screen. Stop & Shop can store each customer’s sales and then at the next visit, customize promotions to their purchases. The promotions are recorded immediately on the screen.

A pint of strawberries was displayed with the signage, “Buy 1 And Get 1 Free.” We scanned in the two pints and the display confirmed that the second pint was free. (I wondered: Is this a method to move products that are approaching their shelf life?)

The most important aspect of the shopping experience occurred at the self checkout kiosk. Responding to prompts we scanned in the gun, we selected a method of payment – cash, and credit or debit card – paid, and walked out of the store without any store personnel checking the contents of our bags. We saved time and money. It was totally user friendly; a dramatic contrast to the “locked” room concept of the earlier self checkout system described above.

Down the block at our local drug store, there are no cash registers. Every product is paid for at self checkout kiosks. There are store personnel available for assistance. Once you interact with any of these systems, it is just like pumping gas.