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Top 3 challenges to overcome when implementing self scanning

The brick-and-mortar retail industry is undergoing seismic shifts driven by digital enablement and intense online competition. As part of a larger trend to offer consumers more convenience and more control as they shop — and also to counter Amazon’s cashierless stores — retailers are increasingly adopting self-scanning checkout solutions in their stores. Not surprisingly, the expected annual growth rate for self-scanning software tops 14 percent, according to research agency VDC.

One of the reasons that self-scanning is gaining popularity fast is that it reduces the length of checkout lines and checkout times. Any retailer knows that long checkout times are a deal-breaker. Forrester (2018) found that checkout (the line length and experience) is, after location and price, the most important factor to prompt consumers to head somewhere else for groceries if it takes too long. In fact, 18 percent claim that they’d rather shop elsewhere if length of lines and checkout time would be shorter.

Benefits of self scanning

11-scale-scan teaserConsumers perceive self-scanning as a way to save considerable amounts of time, especially when checking out. It allows them to touch an item only once as they “scan, bag and go.” Shoppers can scan their own items in store using a dedicated scanning device or their smartphone (“bring your own device,” or BYOD), bag their items while shopping, pay at a designated area, and leave the store without any cashier involvement. This improves the consumer experience, makes everyday shopping a more innovative experience and provides retailers with the tools to establish a “store for one” using personalized interactions — visible on the hand scanner — while shopping.

Self-scanning not only improves the consumer experience, it also improves bottom-line results for retailers. According to VDC Research (2015), European retailers have observed greater basket sizes and, on average, a 10 percent increase in overall revenues since deploying hand-held self-scanning solutions. The ROI for self-scanning projects typically is achieved within 18 to 24 months. Shoppers who use self-scanning are more likely to buy extra items when they’re alerted via hand scanner that an item is on sale. Moreover, recommendations can be made in real time, like “This wine goes well with your meat, and is on sale right now.”

Adoption rates

In areas where self-scanning was introduced 10 to 20 years ago, we see a substantial share of consumers using it. In countries like Sweden, Switzerland, Belgium and the Netherlands, self-scanning is broadly adopted, with up to 35 percent of consumers having used hand-held self-scanners to purchase products as they shop (Nielsen, 2017).

U.S. grocers are quickly ramping up self-scanning capabilities, moving from 8.5 percent availability in 2017 to 24.3 percent in 2018 (Progressive Grocer’s 85th Annual Report). Here in Canada, grocery giant Loblaw launched its phone-based “shop and scan” offering at five Loblaws locations and three Real Canadian Superstores in the Greater Toronto Area in November.

Challenges of self scanning

As a proven solution for more than two decades, the real challenges of self-scanning are no longer in the hardware and software solutions. Rather, they’re in adoption by the consumer. The successful adoption of new ways to shop is dependent on overcoming three primary challenges:

  1. Selling the concept. Consumers and staff need time to experiment and learn about new shopping processes, with technology simply acting as the vehicle to get the process accomplished. As any psychologist can tell you, learning new habits is a task not to be underestimated. Ease of use is crucial, as is a crisp and clear explanation of how to use it, and sufficient staff in the trial period to help consumers who may get stuck somewhere in the checkout process.
  2. Visibility and availability. It’s not only the devices themselves that are required; a lot of services supporting the devices are needed, such as multiple bag racks, cart brackets and dedicated pay stations. There should also be a surplus of devices clearly visible at the entry, and a surplus of brackets at the exit. Retailers should think about how to support items that need to be scanned efficiently: for example, how to enable self-scanning for fresh produce or any other non-barcoded items priced by weight. This often requires a new store process with weighing sales and barcode printers in the store to be set up in advance. Retailers must also think about how to enable loyalty programs and special discounted items for self-scanning shoppers.
  3. Consumer acceptance of security measures. Customers have to accept that they’ll be monitored and sometimes exposed to security checks, such as a partial re-scan by a staff member. This can be softened by not “incriminating” them upfront, but rather by helping them scan items properly, and clearly explaining that a first-time user is always checked. With the right mathematical algorithms and business knowledge in place, random checks can be reduced to an absolute minimum. Various self-scanning projects show that — if properly implemented, communicated and executed — the effect on shrinkage is marginal.

The winners in retail will be the ones that smartly innovate their stores to let shoppers conduct their journeys how they want. Self-scanning may be just the innovation needed to achieve this goal.

Carl von Sydow, Diebold Nixdorf’s director of self-service sales, Americas, has more than 15 years of international business experience in sales, manufacturing, quality management, R&D for hardware and software, IT/ERP, and finance. He brings a deep knowledge of both the European and North American retail markets to his position.

Originally posted at ProgressiveGrocer.com.