Over the last six months, there have been many reports from large media outlets about how retailers are abandoning self-checkout, implying that the technology has been somewhat of a “failed experiment” due to the shrink that occurs from both intentional stealing and user error. While these articles may infer that retailers are abandoning self-checkout units in droves, the truth is far from it. Yes, some retailers are removing some self-checkout units from their stores, but there are far more who are rapidly implementing self-checkout units and embracing the technology more than ever before.
Let’s back up a little bit and talk about why this problem seems to be surfacing right now after years of self-checkout being implemented by retailers worldwide and being seen in grocery technology as “the next big thing.”
Unfortunately, both a cashier and a self-checkout unit will always have some shrinkage that occurs, with the self-checkout usually having a higher rate than a cashier., However, the labor cost saved by utilizing a self-checkout was usually greater than the shrink, offsetting this problem. So, while self-checkouts have always had a higher rate of shrink occurring, they also led to greater profits as well as providing another option for customers to check out. When the Covid-19 pandemic started in 2020, it pushed retailers around the world to rapidly implement self-checkout units as they provided an option to check out in-store while still social distancing. Some stores even had self-checkout-only locations, cutting down on traditional lanes and eliminating cashiers. This meant that more people were using self-checkout units than ever before. So why are we seeing so many articles about self-checkout being a “failure” due to shrink? It’s simple:
More Self-Checkout Units
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Fewer Cashiers and More People Using Self-Checkout
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More Shrink Occurring
Make no mistake, self-checkout does not always equal shrink. Some retailers view self-checkout as one of the more prominent causes due to criminals using them to fake buying something, allowing them to steal, as well as innocent customers making errors or simply forgetting to scan an item. These are legitimate concerns that happen regularly, but retailers should also not forget about shrink occurring at manned lanes, which happens more often than we might think, or other ways criminals can shoplift from their stores. If a store is experiencing shrink at their manned lanes, they may want to utilize a solution like TruView, which records cashier performance, shedding light on areas of shrink. If they are experiencing shoplifting somewhere else, they may want to implement security cameras in new areas of the store.
All of this is to say that self-checkout is not the only area of shrink, it has just been the easiest culprit to point out due to it usually having less oversight by employees compared to a manned lane. So yes, while some stores have been removing their self-checkout units due to this problem, these stores should be viewing it as a solution.
What may surprise some people is that the retailers removing self-checkout units and the ones who are implementing more into their stores are both reacting to this shrink problem but in different ways. What may surprise even more people is that retailers who are embracing self-checkout technologies and implementing more into their stores are combatting shrink and setting their stores up for long-term success. How? By implementing the latest artificial intelligence (AI) solutions into their self-checkout units.
“Self Checkout integrated with the latest AI solutions has been proven to reduce shrink at the self-service point of sale. It’s not completely about eliminating human error, but rather leveraging smart technology that can eliminate the impact of human error to the bottom line"
-Paul Willoughby, vice president of POS Solutions, TRUNO
Whether you’re an NCR or Toshiba Global Commerce Solutions POS user, there is an AI solution to help reduce the loss associated with shrink, as well as provide other benefits to both you and your customers. NCR self-checkouts are compatible with Everseen, and Toshiba’s self-checkouts utilize their own ELERA® Security Suite. Both solutions offer similar features with the main one being to detect both intentional and unintentional missed scans. When a missed scan is detected, the unit can alert the customer to complete the scan and transaction, as well as alert a nearby employee.
Both solutions also offer produce recognition at self-checkout. One of the greatest pain points as a consumer is correctly weighing, and then searching for the correct produce item. Both Everseen and ELERA® Produce Recognition can instantly and accurately recognize fruit and vegetables both in and out of a bag.
“A.I. technology at self-checkout can enhance customer experiences, optimize operations, enable intelligent decision-making driven by data, and drive innovation. A recent retail study by Incisiv that was commissioned by Toshiba Global Commerce Solutions reported that 97% of U.S. retailers say that innovation is critical to their future growth strategy. Implementing a more automated approach for self-checkout using enhanced security and produce recognition technology creates a better experience for shoppers and provides the added benefits of increased self-checkout adoption for more effective in-store labor distribution, improved loss prevention, and more accurate item inventory visibility,”
-Fredrik Carlegren, vice president, head of marketing and communications at Toshiba Global Commerce Solutions.
While these features are appealing to retailers due to cutting down on shrink, there are numerous other benefits associated with implementing these AI solutions at self-checkout. For starters, the ability to instantly recognize produce when scanning can save up to five seconds per item. While this may not sound like much, it can dramatically improve the speed at which your customers check themselves out, reducing line times and improving customer satisfaction.
Another benefit that may not be initially obvious is improving your on-shelf availability. When items are stolen, intentionally or not, it can lead to your store’s inventory having the item as “in stock” when it isn’t. This issue can be an annoyance to both the store and customers who may have seen that something was in stock online.
“Technology is constantly changing to adapt to retail challenges. Problems lead to problem-solving, which leads to innovation. By utilizing these innovative AI technologies, grocers have the opportunity to get ahead of shrink at the point of sale like never before.”
-John Poore, chief technology officer, TRUNO
Self-service checkout is a technology that has slowly become an expectation to shoppers, and for good reason. They reduce line times, allow customers to limit their interactions with others if they choose, and can provide more lanes than the store would regularly handle. A study from NCR Voyix recently found that 43% of shoppers would rather use a self-service option when checking out, with 53% of the 18-44 demographic preferring self-checkout. This shows that self-checkout is gaining popularity with consumers and should not be removed from stores but instead invested in to adapt to the problems that it currently faces.
While self-checkout lanes may have a higher rate of shrink associated with them, the benefits they provide both retailers and consumers are nearly endless. If retailers are already following the best practices to prevent theft at self-checkout, the additional tools given to us from the latest AI technologies can help to almost entirely eliminate shrink at self-checkout, proving that they are a more than worthwhile investment to retailers’ long-term success.
Ready to Cut Down on Shrink at Self-Checkout?
