NORTHWEST ARKANSAS (KFTA) — Self-checkout machines are a growing feature in popular retail stores such as Walmart and Target, but they’re also showing up in other service industries.
Several retail experts at the University of Arkansas have observed the self-checkout boom and noticed that it’s spreading across service industries.
“From personal experience I have seen several large companies use the self-checkout and it seems to be a growing trend as long as it is monitored by the employees for any glitches – some stores do a better job of this than others as would be expected,” said Dr. Kathleen R. Smith, Clinical Associate Professor of Apparel Merchandising and Product Development for the School of Human Environmental Sciences, Dale Bumpers College of Agricultural, Food and Life Sciences.
The self-checkout trend has found its way to fast food because it has many benefits, according to John Aloysius, Professor and Oren Harris Chair in Logistics for the U of A’s Supply Chain Management Department.
“There is indeed a growing trend for fast food restaurants to experiment with roll outs of self-service kiosks,” Aloysius said. “One big benefit is cost savings, but also there is potential for improved service because of slightly quicker service times and a reduction in service failures due to errors that happen because of the extra step in the ordering process (the human server listens to the customer’s order and then inputs it into the system).”
Self-checkout is emerging in fast food establishments because consumers do not like standing in line and there are only so many employees and manned checkout stations at the order counter, said Dr. Ronn J. Smith, Department Chair, Associate Professor of Marketing, R.A. and Vivian Young Chair in Marketing for the Sam M. Walton College of Business.
“If there are other options available (e.g., self-checkout kiosks) that could reduce line length and potentially speed up the ordering process, it ends up being a win-win and worth exploring,” Ronn J. Smith said.
Dinesh K. Gauri is a professor for the U of A’s Department of Marketing and Walmart Marketing Chair. He said Panera Bread and Wendy’s are effectively incorporating self-checkout, and McDonald’s has done an exemplary job incorporating self-checkout into its service model.
“I have personally used their self-checkout/order kiosks in many countries. Though initially, I was skeptical, but it has worked out very well whenever I have used it,” Gauri said. “It is much better than ordering from the counter as this system recommends also various items, which is useful many times to add to the order certain items that you may not otherwise order/try.”
Self-checkout systems could feature many potential marketing innovations, according to Aloysius.
“One of the more interesting additional benefits that could result from automated service points is the potential to exploit data in real time for targeted marketing,” Aloysius said. “While other forms of retail have been exploiting this opportunity especially with online retail to make personalized offers, it is still only emerging in the fast food industry. If for example, someone ordered two big macs and a side of fries, the system could in real time look at what customers who had that precise combination also bought in addition. The system could then cross-sell by making an offer to the customer for those additional items – maybe also offering a discount for the additional purchase or for the bundle.”
Self-checkout has a dual benefit for both the customer and the company that owns the fast food restaurant, according to Gauri.
“It saves time for customers as well as may save costs for the establishment, but may cost a bunch to install and maintain also,” Gauri said. “Saving time is important as no one wants to wait in line a lot to order.”
Customers have become used to self-checkout systems in grocery stores, so they may expect similar experiences in other retail industries, Gauri said.
Gauri said airports have technology akin to self-checkout. Most airports feature self-use kiosks that enable passengers to check-in and print the boarding pass for your flight. Gauri said Department of Motor Vehicle locations would benefit from having such technology.
Self-checkout has also found a place in post offices, and the service compliments the postal industry well, according to Bob Stassen, associate professor of Marketing Transportation at the Sam M. Walton College of Business.
“At the Post Office, the self-service machines are perfect for weighing packages, buying stamps or paying custom postage rates — this is generally faster than time at the counter; there’s no ‘drive-through’ window,” Stassen said.
Smith said while self-checkout systems likely cause a smaller workforce, such systems will never fully replace traditional checkout lines with a person behind the cash register.
“Even with robotics in these industries, there will most likely always [be] a human factor,” Smith said.