To automate, or not to automate? That is the question retailers face this holiday season and beyond.

By Joel Brock

Holiday shopping season is upon us! The National Retail Federation projects a 4.1-percent increase in holiday sales this year to $586.1 billion. Retailers want their fair share, and customers want a painless retail experience. Every year, retailers face the age old question of how to handle a large spike in customer traffic without dramatically increasing staff or infrastructure they may not be able to utilize fully the rest of the year.

Self-checkout lanes: Friend or foe?
For years, many retailers have been using self check-out lanes to reduce lines and wait times. In a recent West Monroe survey, 86 percent of customers cited a fast checkout as the primary reason for rating a store as delivering a positive shopping experience. It’s clear that everyone, retailers and consumers alike, want efficient service. What isn’t clear is whether people want the human interaction and precision of store checkout lanes handled by personnel. Indeed, customers seem polarized on the concept of self check-out experience. Some praise the ease of use; others believe they “pay” for a level of customer experience not afforded by self check-out lanes, are intimidated by technology, or resist the technology because they believe that this strategy costs their communities jobs.

When analyzing individual transactions, we find that self check-out lanes are often slower because inexperienced users who are not trained on the system are not as efficient as store employees. In one recent study of self check-out transaction times, we found that these transactions take an average of five to six percent longer than at cashier lanes. But, it takes some of the traffic out of the cashiers’ lanes and the difference is only five to six percent, so it is still makes sense, right? It’s not that easy.

Many stores realize that customers purchasing one or two items and paying by credit card prefer to get in and out using self check-out lanes. But with no control on which customers use the self check-out lanes, inexperienced users, large purchasers and other bottlenecks emerge and impact the experience for others.

Mobile check-out: Wave of the future?
Some savvy retailers have or are considering mobile check-out available from anywhere in the store via smart phones or other mobile devices supplied by the store. With these technologies, shoppers can scan items into their carts as they shop, with all of the data stored for either paying at a checkout counter or via a loyalty rewards card and credit card tied to the customer’s account. Other stores are adding a concept popular in retail food-service environments—having employees scan items in carts while customers are waiting in check-out lines so that when it’s their turn, they simply pay. It’s a proven way to help speed up the process.

Evaluating your options: Will these technologies really make it faster?
Some retailers can experience increases between 20 and 40 percent during the holidays according the National Retail Federation; thus, they constantly evaluate new options to get customers through their stores efficiently.

To determine the right balance of check-out options for your retail stores, you need to analyze your customer base, the types and sizes of your products, the type of interaction you wish to have with your customers and what your preferred staffing model looks like – both during the holiday season and year round. Ask the following questions:

  • Do you know your store’s capacity per hour in its current state? Are you losing customers because you are unable to process additional transactions given capacity constraints?
  • Will the new technology increase wait time for customers?
  • Will your lines get shorter or longer?
  • How many self-checkouts should be used during each hour of the day? What types of self-checkouts?  How should they be staffed?  When should they be open?  How many people do we need to use them for a good ROI?
  • How will this solution impact customer service?

Are you able to answer these questions confidently, with actual supporting data? If not, a retail simulation study can help identify the right self check-out technology for improving store operations.

For more information on how a retail simulation could help improve your store operations, please contact Joel Brock at jbrock@westmonroepartners.com.

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