Retailers want to replace people with robots and other forms of automation. This is largely because robots don’t cost money, can’t demand raises, and generally don’t complain.
Sure, there’s a slight “Terminator” risk, but robot uprisings rarely start with the inventory robot or the mop robot cleaning the floors.
The problem with robots and automation is that so far, outside of warehouses and fulfillment centers, they haven’t really worked. Walmart (WMT) – Get a free reportFor example, it has tested robots that take inventory and automated towers in stores that fulfill online orders.
Related: CVS and Home Depot follow Walmart with new ways to combat theft
Neither idea worked particularly well and both were scrapped. Aside from cleaning robots, the idea of automating store operations hasn’t really worked, causing Walmart, Target, Kroger and other grocery chains to focus on the idea of self-checkout.
In a broad sense, self-checkout is the most basic type of automation. It’s not a robot doing the job. Rather, it is a company that pressures customers to do something that workers once did.
Yes, there’s some technology involved (an increasing amount as retailers look for ways to reduce theft), but for the most part, a self-checkout is a regular checkout set up a little differently. Kroger has tested self-checkout-only stores, while Walmart and Target have taken steps to staff classic checkout aisles less and encourage people to do it themselves.
Target, however, has recently made a big change at select locations that some customers will appreciate and others will be upset about.
Image source: John Smith/VIEWpress.
Target makes major change to checkout
Target, unlike most grocery stores, generally has not offered checkout lines of 10 items or less. Now, certain locations are testing that idea on their self-checkout lanes.
Some Target stores have adopted a policy of 10 items or less in the self-checkout line, according to parade.com.
This is a controversial change because self-checkout, while polarizing, has its followers. Some customers like not having to interact with another human being. Others find self-checkout faster.
Target is testing the limits to see if it can speed up the overall checkout process by sending larger orders to its human cashiers. That’s an idea that has drawn pushback from customers on social media, as many people noted that the retailer often only has “1 or 2” regular checkout lines staffed with workers.
Some Target fans have also speculated that the change could be due to theft, something the retailer has complained about a lot recently.
The lens has a shrinking problem
Target CEO Brian Cornell mentioned the reduction several times during his remarks at the company’s conference. second quarter results call. Chief Financial Officer Michael Fiddelke also spoke about it and shared a bit about the company’s efforts to combat it.
“As Brian mentioned, we are working hard, both within our stores and with government and community partners, to achieve lower shrink rates over time. And our long-term expectation is that shrink rates will moderate from the current unsustainable levels,” he said. .
Self-checkout has led to higher levels of theft, both intentional and unintentional, among retailers that have adopted it.
“But so far, we’ve only seen signs that loss rates could soon be reaching a plateau, but we haven’t yet seen evidence that loss rates will start to go down. Therefore, the only reason for the expected change in the year-over-year comparisons are the cadence of how losses were recognized by quarter in the second half of last year, a period in which loss rates increased rapidly, resulting in higher loss accumulations at the end of year,” he added.
Target saw its total revenue fall 4.9% in the most recent quarter. The company attributed this to slowing sales of big-ticket items and the impact of controversies surrounding its Pride merchandise that led to boycotts.
Its share price has been lagging for two years, falling 28% so far in 2023, in addition to a 35% drop in 2022.
