IKEA Kills Self-Checkout In The U.S. For An Unusual Reason: It Was Too Secure And, Therefore, Too Slow
The IKEA Group's U.S. operations have become the latest chain opting to rip out self-checkout POS, concluding that the systems simply required too much oversight and staff time. But in this case the decision is more nuanced, as the chain is keeping self-checkout at its European and Canadian stores, among others.
A key reason? The U.S. stores' systems were more secure and more sophisticated, which also slowed down operations more. The irony: Had the U.S. self-checkout systems been less secure, they might still be there.
IKEA, the global furniture retailer with stores in more than 38 countries, uses Wincor Nixdorf self-checkout in Europe. Those Nixdorf systems have far fewer security protections than the NCR self-checkout units being used in the U.S. For example, the Euro units had no weight verification, to confirm that the items being scanned were what they were supposed to be.
But the size and bulk—and varying packaging material—in large furniture pieces might make a scale less effective than in, for example, grocery. "I assume that the NCR standard Fastlanes were not ideal to cope with the bulky items and that the simple IKEA-developed and Wincor-Nixdorf-built (self-checkout) were able to cope with this," said Björn Weber, a retail technology research director with Planet Retail in Germany.
Although security indirectly played a role in the self-checkout's demise, the main concern was line movement, said IKEA U.S.'s Joseph Roth. After five years of U.S. self-checkout, the chain is now replacing all—or almost all—of the units. "When our stores are quite busy, we end up staffing these self-checkout lanes anyway (with one person per self-checkout). If we're already staffing the self-checkouts, why bother?" Roth said. "It's more efficient to have a traditional checkout if we're going to have to be staffing it anyway."
Roth said that the U.S. stores are newer than most of the rest of IKEA's global stores and that they are "fairly larger. That means that we already have room for conventional checkouts." He added that the very nature of a furniture retailer may not be the best match with self-checkout. "It may work with home improvement or grocery stores, but it's a little more complicated when you have a flatbed cart with lots of boxes in it," Roth said.
Martin Weiderstrand, a European Union advisor with IKEA, agreed that the nature of the chain makes some security efforts ineffective. "There's no real user case for scales in our line of business, apart from security (weigh the product), and that is not a very good tool given all handbags, kids and other things that are present at the checkout," he said. "We have handscanners in the EU, not fixed ones as in the U.S. The U.S. has both nowadays, but it's hard to scan a 25 kg bed on a fixed scanner. We take cards only in the E.U., but it's cash and cards in the U.S. The bottom line is that it's not a like-for-like comparison. In short, the express checkout has been very well received in Europe. U.S. customers might not have gotten the same experience, given the different setups."
There were also other issues in the U.S., including self-checkout difficulties that go beyond speed. There was customer "difficulty with bar code scanning, the combination of components that comprise a product, same item but different color," said Cathy Meyer, the chain's U.S. customer relations manager. For example, Meyer said, "a customer could accidentally ring 2 purple pillows when they actually have a red and a purple. This could result in an inaccurate charge and/or inventory."
When asked why IKEA didn't simply take the self-checkout systems that worked in Europe and use them in the U.S., Meyer said they've been trying to do that. "That has actually been a work in progress that we’ve been trying to review for some time. To get all of our systems to one synchronized system would take some time. It could take 12-24 months. In that time, there could be a significant impact to the" stores while working through the inventory and speed issues that they've been experiencing, she said.Self-checkout in the U.S. has been hit with conflicting reactions, with some retailers—such as Walmart—loving the machines and promising to sharply increase their use. But other chains—including Kroger, Albertsons and Big Y—are removing the units. And both sides cite the identical reason for the opposite move: improving customer service.
Self-checkout advocates, such as Dusty Lutz, general manager of retail self-service solutions at NCR, argue that most unsuccessful self-checkout deployments are the fault of the retailer, which often doesn't monitor or maintain the systems properly. "You need to have clear and reasonable objective-setting and reporting," said Lutz, who would not comment on specific customers such as IKEA. "You don't want to force (self-checkout) on customers not ready for it."
One example he cited was reducing interventions, which Lutz said can be done by allowing the item to be automatically and instantly accepted, while a store associate does a visual age verification (often just by looking at the customer and seeing if he or she is obviously above-age) as the order is processed. Done properly, that age-intervention item wouldn't delay the line—or the customer—at all, he said. But it takes training and management attention to make that happen and to make it work.
The situation at IKEA would seem to support Lutz's argument, in that the chain knew how to make self-checkout work for its customers, but logistics made it difficult to bring that to the U.S. stores.
IKEA is also experimenting with an unusual security traffic-light system in about 1,000 self-checkout lanes in Germany—a trial that began in February, according to a report from Planet Retail.
"Each traffic light is equipped with three lamps: a green, an orange and a red one. If the checkout is not used, all lamps are switched off. As soon as a customer starts to utilize the checkout, the orange lamp lights up and remains activated. Every time the customer scans a product, the green lamp flashes up so employees can see that the customer is scanning items," the report said. "The red light flashes up if assistance is needed. Once the customer has paid, the orange light goes out. If it does not, this means the shopper wants to leave without paying."