MONTREAL -- Self-checkout systems have historically attracted customers with small orders and a healthy appetite for using new technology. However, changes are being made to offer more payment options and improve the speed and ease of use in an effort to garner new users.
"We're really seeing this technology being embraced by a variety of people you would never expect to see in the self-checkout lane," said Henry Karp, president of Optimal Robotics here.
"Our retailers are telling us that across all demographics levels and income levels, customers are finding self-checkout has improved customer service."
Optimal Robotics is one of the leading vendors of self-checkout systems, with installations in a variety of retailers, including Kroger Co., Cincinnati; A&P, Montvale, N.J.; and Wal-Mart Stores, Bentonville, Ark.
Karp projects Optimal will have 240 retailers using its system by the end of 1999, and hopes to reach 500 by the end of 2000. Karp also expects to more than double the number of transactions being handled by Optimal self-checkout systems, from an estimated 45 million in 1999 to a projected 110 million in 2000.
Five factors will drive growth in self-checkout technology, according to Karp: time savings for customers, convenience, competition, the labor shortage and cost-reduction efforts.
Karp said Optimal, and self-checkout technology in general, has made steady strides toward systems that are easier to use and more convenient.
"We're seeing a lot of growth among senior citizens," Karp said. "They like to feel more in control. They like participating in technology and they like to avoid the lines and the cashier," he said.
Adding the ability to handle a variety of transactions is also enticing new users to try self-checkout, Karp said. "We can now handle debit with cash back. That makes a huge difference as people are looking to get cash back on transactions to avoid those fees. We also accept checks and food stamps at the station. And we've added bilingual capabilities as well."
Optimal is looking at biometrics as a way to speed the checkout process even further. "It is certainly one of the things we are looking to do in an effort to make the process even faster," he said.
As the systems get faster, people will be more likely to use self-checkout for larger orders, he said. "Right now, most of the people using self-checkout are using it for smaller orders. Our studies show that half of supermarket shoppers are purchasing five items or less, so many people are using the supermarket as a convenience-store replacement in some cases and they want to get out fast, which is why they find self-checkout attractive."
Meal replacement is also spurring the growth of interest in self-checkout, Karp said. "The meal-replacement shoppers really like the grab, pay and go aspect of our system," Karp said.
While customers like the time savings and convenience, the labor shortage is another force in the move toward self-checkout technology, Karp said.
"We hear from retailers that their No. 1 problem is labor. And estimates are that there will be a shortage of about 500,000 cashiers by 2006," he said. The Optimal system is typically configured so that one cashier can monitor four self-checkout lanes. He estimates that a typical supermarket can save 120 to 150 hours per week with self-checkout. "They can get a payback in nine to 18 months and leverage their existing workforce," he said.
Supermarket consolidations and Y2K concerns have slowed overall investment in technology over the past 18 months, Karp said, but he expects that these factors will dissipate in the coming year. "As merging companies evaluate their technology investments and look for ways to contain costs, we feel they will find the returns on self-checkout technology attractive," he said. "IBM did a survey of retailers, asking: If they had a spare $100,000, where would they invest it? Ninety percent said self-checkout."