The Latest Grocery Chain To Ditch Self-Checkout Adds Theft And Other Issues To The Debate

In the ongoing battle of words over retail self-checkout with Kroger and Albertsons—with each side arguing to its customers that true customer love means rejecting/retaining self-checkout—the latest comes from a 75-year-old $1.5-billion regional grocery chain that was late to the game in beginning self-checkout and right in the middle of the rush to jettison it. But even though the chain certainly argued a customer service reason for the swift chain-wide exit, it also said that it couldn't stomach the high theft rate.

The Big Y chain, with 61 stores in Connecticut and Massachusetts, announced this month that it would kill all of its self-checkout lanes. "In the battle of Service vs. Self Checkouts, service won," the chain said in a short statement. In a conversation with a chain executive, though, the decision sounded a lot more complicated. To be blunt, it didn't seem as if the chain had ever been all that fond of self-checkout, which it first deployed back in 2003.

"We were one of the last chains to get into the self-checkout game. We were really dragging our feet," said Claire D'Amour-Daley, the chain's VP for corporate communications.

Beyond an anti-customer-service perception, D'Amour-Daley cited several concerns, including the struggles of fresh produce identification, coupon issues, theft, payment choices and compliance fears with the Americans With Disabilities Act of 1990.

The theft issues were both intentional concerns (true stealing) and unintentional concerns (customers who, for example, misidentified the type of orange they were purchasing and said it was a cheaper variety than it really was). But, D'Amour-Daley added, "more was intentional," with some thieves knowing the best [busiest] times to get away with thefts.

This month also saw one of the world's largest retailers, Tesco, get involved in the self-checkout drama, pledging to add self-checkout to its stores in parts of Central and Eastern Europe, including the Czech Republic, Slovakia, Poland and Hungary. Tesco's started with self-checkout in 2002—a year earlier than Big Y—with its U.K. stores.

The difference in customer service perceptions is explained mostly by looking at the different geographies and specialties of the retailers involved, along with the nature of their customer demographics.Sometimes, it also speaks to the perceived pleasantness of store associates. After all, whether a self-checkout is seen as nicer than a staffed lane really depends on how the cashier is. Some cashiers, candidly, offer a nicer experience than self-checkout interactions while others don't. Trader Joe's, for example, pushes associates to be so customer-oriented that self-checkout would make little sense. But other chains could be a very different situation.

Another factor is the perceived speed of checkout. Almost all self-checkout systems have been designed with the goal of handling no more than 10 items. But almost no stores ever advertise that fact, fearing it would discourage shoppers with overflowing carts from using self-checkout. In fact, stores really should discourage such shoppers from using self-checkout, because it will quite likely deliver a subpar experience for that shopper and everyone in the line behind him/her.

The lack of training—and/or associate hand-holding—of customers is another factor. Self-checkout is like any new technology experience. The first couple of times it can be awkward, slow and unpleasant. Many consumers may not want to repeat that experience, not realizing that it will be a lot better once they get used to self-checkout and understand how it works.

It's like working with a new operating system. In the very beginning, productivity plummets, because almost nothing is where your fingers expect it to be. But if you stick it out, within a week or two, productivity might easily exceed where it had been with the old system. (Unless it's a Microsoft OS, in which case you're toast.)

But a common retail self-checkout approach of "throw 'em in the self-checkout waters and hope most don't drown" was probably not the best way to engender self-checkout fondness. Not all customers will resort to self-checkout fisticuffs, but a few will.

Longtime self-checkout watcher—and IHL President—Greg Buzek has even argued that smartphones could play a role in decreasing self-checkout kiosk sales.

That brings up perhaps the ultimate self-checkout decision. With all of today's technology changes—mobile being just one, but a huge one—and the changing customer expectations of fast E-Commerce-like customer service, how much effort does self-checkout merit? To do self-checkout properly requires oversight—from both an associate and a loss-prevention perspective—marketing and a means of encouraging self-checkout-friendly items (fewer than 10 items, no age verification items, no limit verification, etc.). In the ROI struggle, how well will self-checkout do in 2012 and beyond?

"We have to continually look at our cost of doing business," said Big Y's D'Amour-Daley. "Does this work? Does that work?"

For the Big Y, the question of whether to get rid of self-checkout ended up being the Big "Why Not?"