Report • 01.09.2014

Modern Checkout Zone – Challenges at the Checkout

Some manufacturers offer a number of system components that integrate all scan...
Some manufacturers offer a number of system components that integrate all scan and payment options.
Source: NCR GmbH

The checkout decides how satisfied the customer is when he/she is leaving the store. Yet the checkout zone is still more of an impersonal handling zone in many stores and markets. This is why retailers need innovative concepts to set themselves apart from their competition and increase efficiency at the store.

The selection of current checkout solutions is admittedly large. Retailers therefore don’t just need an innovative, but also individual solution that is customized to their needs and even to individual stores. To find it, they have to analyze a number of important factors such as product mix depth for instance, buying behavior and customer structure as well as the type of branch and store.

At the same time, the checkout is an extremely personnel- and cost intensive process for retailers. Approximately 24 percent of overall store process costs originate at the checkout. The challenge for retail is to strike a balance between customer satisfaction and cost optimization. And that is not an easy task: if too many checkouts are open, the retailer incurs unnecessary costs; if not enough of them are manned, waiting times increase and customers are dissatisfied. And as is commonly known, customers perceive long lines at the checkout as the biggest nuisance of all during shopping.

Checkout solutions as individual as the customers

There is no one checkout solution that is right for a store. Instead, retailers today should focus on a combination of different solutions, because different customers also prefer different payment options. This is why retailers need to create a checkout mix that is best suited to their store concept. Self-checkouts, mobile shopping and payment at “traditional” checkouts can all be combined in a checkout zone. It forms a very crucial point in the store. Each shopping experience ends at the checkout, because every customer needs to pay.

Self-checkout is becoming increasingly popular

The self-checkout area is increasingly growing. Experts expect 35 percent of all retail transactions by 2016 to be handled at self-checkout terminals. However, you also need to consider country-specific requirements: acceptance and therefore distribution of self-checkouts in supermarkets is far greater in Great Britain for instance than it is in the German-speaking region.

However, to reduce checkout costs and increase customer satisfaction, retailers in Germany also increasingly resort to different automated checkout systems where customers can scan items in their shopping carts themselves and pay for them. Even though these systems significantly reduce personnel expenditures, they don’t automatically shorten waiting times and thus increase customer satisfaction. After all, the customer usually needs a lot more time to checkout than a professional cashier does.

However, this will change automatically of course once self- checkout systems achieve even greater market penetration. Most experiments (see IKEA as an example) already show that the suspected lack of consumer acceptance should not present a problem round here – of course always assuming that the applied solutions are user-friendly and customers are able to use them with ease.

Checkouts become multifunctional – ready for multichannel retailing

Even though self-checkout systems are trendy, these new systems will of course not replace ”traditional“ checkout systems. That said these systems need to also be further developed to integrate new range of functions. This may be the issuing and redemption of coupons – whether that’s on paper or on the Smartphone – as well as loading prepaid SIM cards (e-loading) or contactless payments.

The POS system at the store thus increasingly becomes an all-rounder. According to the current study titled “Checkout Systems 2014“ (German: “Kassensysteme 2014”) by the EHI Retail Institute, which surveyed 55 companies in the German-speaking area that operate 58,300 stores all over Germany, presently 61 percent of interviewed retailers offer couponing at their checkouts. 81 percent of study participants said they plan to offer this option in the future.

The multichannel retailing trend involves new demands especially for checkout systems. It needs to be possible to check for available products, regardless of whether they are kept at the store or the online store warehouse. The exchange of items bought online needs to be an option as well, just like the general identification of the customer, who freely switches between the different retail channels. QR codes are also going to play an increasing role in retail. Already 40 percent of participants of the EHI study are planning to link QR codes at the store with their own online shop.

Retailers also offer new payment methods

28 percent of the surveyed retailers stated they already offer contactless payment today; generally card-based systems and often still just in selected stores. The percentage of planned installations is at 78 percent. Mobile payment – payment with a Smartphone – is already being offered by 24 percent of the surveyed retail companies. This payment method is even meant to be available with 81 percent of retailers. 52 percent of the participants are planning to check out customers with mobile cash registers. Today already 9 percent of companies are also using mobile cash registers.

The changes at the checkout are in full swing

Even though mature technology is already available today many retailers still shy away from self-checkout solutions, because they worry about lack of consumer acceptance for these systems. However, a multitude of installations where these solutions are already being used shows that this fear is mostly unfounded when it comes to the German market.

For retailers, the solution is to focus on a mature and customized system mix in every store. This way, every customer can choose his/her payment method based on individual needs. At least during the transition period, self-scanning systems serviced by personnel can also make sense.

At this point, some manufacturers even offer a number of system components that integrate all scan and payment options. This way, retailers can use self-service solutions (and possibly also kiosks and digital signage) that are tailored to respective customer needs.

Self-checkout systems with scan, payment and bagging modules make it possible for retailers to optimize the use of floor space in the store, improve the customer’s shopping experience and even – given integration of respective components – improve cash management.

Author: Daniel Stöter; first publication

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