Why self-service kiosks won't take over checkout
To see why robots aren't going to wipe out everyone's job anytime soon, look no further than the annoyed and bewildered customers confronting store self-checkout units squawking "Unexpected item in bagging area" and "Help is on the way."
Self-service checkout scanners are now standard at most U.S. supermarket and mass-merchandise chains. That might seem great for customers in a hurry. After all, in a June poll, half of U.S. adults picked slow checkout speeds and long lines as the most frustrating thing about shopping in brick-and-mortar stores. A whopping 88 percent would like checkout to be faster, the Harris Poll for Digimarc Corp. found. Americans hate to wait to buy stuff, and expanding self-scanners seems like an obvious way to speed up cash register lines.
But three-quarters of respondents also said they sometimes avoid self-service -- most often because of technical problems. (Those over 65 were more likely to say they simply prefer cashiers.) Nobody wants to listen to an endless loop of electronic reprimands while watching other shoppers move smoothly through the human-staffed queue.
Even people who've mastered the machines often find themselves waiting behind customers who aren't so adept. "If the self-checkout is empty, I always head for it," says one friend. "But for some reason, whenever I get behind someone it seems to take forever, much longer than waiting behind someone at the cash register. I don't know if they are refinancing their mortgage or buying groceries, so I just get in line at the cash register."
Self-service is a handy option, but few shoppers want to rely on it. And most people who use self-scanners limit them to small orders.
That in part reflects the tiny space most stores allocate to their self-service bagging areas. But it also suggests two other costs that illuminate consumer thinking about the transaction. Engaging with a cashier exacts a predictable fixed cost -- in time for everyone, in bother for the less social among us -- that seems more justified when spread over many items. Meanwhile, each additional article increases the odds of a self-scanning mishap.
For now, new self-checkout installations seem to have peaked in the U.S. "Everyone who was going to do it has more or less done it, and now they're either filling in the stores that didn't get it the first time around or they're on a replacement cycle," says Paula Rosenblum, managing partner of RSR, a consulting firm specializing in retail technology, in an interview.
Adoptions hit a high in 2013, when the rollout of new NCR Corp. self-checkout systems at Wal-Mart stores brought U.S. shipments to 16,000 units. Last year, new shipments dropped to 8,600, according to the 2015 Global EPOS and Self-Checkout study by RBR, a London-based research and consulting firm. Worldwide, about 210,000 self-checkout systems are in place, a number that RBR projects will jump to 335,000 by 2020, spurred mostly by growth in Europe and Asia.
To justify upgrades, self-scanner companies are working to address shoppers' technical gripes. Market leader NCR, which accounted for 64 percent of new shipments in 2014, has shrunk its machines to double the space in the bagging area. It has also shortened the tedious process of paging through screens to find produce codes -- a deterrent to many grocery shoppers. New NCR software first shows customers the top-selling fruits and vegetables in the store that day or, if they've swiped a frequent shopper card, their own most common purchases.
And scanning a bottle of wine no longer brings the process to an abrupt halt while you wait for a clerk half your age to check your driver's license. The system simply alerts an employee as scanning continues. "A lot of times they can look over and see that you're obviously old enough and not have to come over to check your ID," said Dusty Lutz, general manager of NCR's retail self-service solution, in an interview.
Eventually, such innovations will smooth the technical glitches that now make self-checkout irritating. (ATMs weren't always so problem-free either.) But by the time supermarkets and drugstores roll out the glitch-free self-scanners, cutting human staff to a bare minimum may seem like retail suicide.
Why, after all, should you schlep to the store when you can point and click at home? Today, the answer is to get your cough medicine or dinner ingredients faster. But with Amazon aiming for "zero delivery time," that advantage may soon disappear.
The only reason to go shopping will then be for the social and aesthetic experience. Stores will have to treat employees as long-term assets who create specific value for customers rather than expenses to handle routine transactions. Technology will serve as a complement to, rather than a substitute for, staff. Already RSR's annual survey finds that the most successful retailers are investing more in hiring and training. But, said Rosenblum, "they're still struggling" with a century-old business model that assumes a low-paid, transient workforce of interchangeable clerks. Basic tools, such as Wi-Fi that employees can use to answer questions, are still scarce.
The job-displacing robots won't be at the supermarket checkout but hidden in Amazon warehouses. Even graceful technology, however, can't satisfy every consumer desire. Some researchers speculate that loneliness, rather than technophobia, may be one reason that older customers prefer cashiers to self- checkout. For people who live or work alone, interacting with cashiers may provide one of the day's few in-person conversations. "Since I try to always get the same clerk, it's like seeing a friend," says one extroverted pal who works from home. "A friend who knows the codes for fruit and vegetables."
• Virginia Postrel, a Bloomberg View columnist, writes about commerce and culture, innovation, economics, and public policy.