Self-checkout has become a polarizing part of retail. Retailers want to use it because it allows them to reduce labor costs, but that also leads to higher levels of theft.
Consumers also have mixed opinions on the concept. Some people like the self-service option, while others miss having an employee scan their items. Additionally, some shoppers are happy to not have to talk to a cashier, while others miss out on the interaction.
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Several retail chains have made the decision to reduce self-checkout. Aim (TGT) For example, it has limited self-checkout to 10 items or fewer and reduced the hours it is available in some stores and eliminated it in others.
Self-checkout presents a challenging dilemma for retailers. It's easy to see why they would want it, as labor costs have increased and companies are looking for ways to cut costs. But it's also easy to see the downside, as losses (theft losses and more) increase when customers use self-checkout.
Ideally, consumers want to have the option of using self-checkout or choosing traditional payment. However, more and more companies are phasing out self-checkout, and one of the largest retail chains has made the decision to eliminate it for the most part.
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Dollar General makes big changes to self-checkout system
Dollar General CEO Todd Vasos shared that his company plans to make three major changes to its self-checkout system at more than 14,000 stores during its fourth quarter results call.
“While self-checkout adoption rates have been high, we believe there is truly no substitute for having an employee present at the front of the store to greet customers and provide excellent customer service, including at checkout. “Importantly, by choosing our self-checkout, payment solution, we implemented a product that is convertible from self-checkout to associate-assisted checkout,” he said.
That's a change the company has begun to make.
“To that end, we have begun immediately converting some or all self-checkout registers to assisted checkout options at approximately 9,000 stores. This is intended to drive traffic first to our staffed registers, with assisted checkout options available as second or third option. to reduce queues in times of high volume,” he added.
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Dollar General limits self-checkout transactions
Vasos detailed the other changes the company made during the call.
“Our second course of action will apply to all remaining self-checkout stores, where we have begun limiting self-checkout to transactions consisting of five items or less,” he said.
Some stores, however, will also lose self-checkout as an option entirely.
“And finally, during the first half of the year, we plan to completely eliminate self-checkout at more than 300 of our highest-loss stores. Collectively, we believe these steps are in line with where the customer wants us to be, which includes increasing personal engagement with them in the store,” shared Vasos.
The CEO believes the changes to the self-checkout system, along with other measures, will help the discount chain limit its decline.
“Beyond our changes to self-checkout, we are also executing a variety of other actions to reduce shrink this year, including inventory reduction efforts, where we see additional opportunities in 2024,” he said. “SKU rationalization, additional loss incentive programs for our store managers to encourage and foster a greater sense of ownership; and the utilization of high-loss planograms, through which we will remove certain high-loss items from high-loss stores.” loss to aim for the greatest opportunity to improve.”
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Vasos acknowledges that implementing the changes will take time.
“While we anticipate continued contraction headwinds early this year, we believe our actions will have a significant mitigating impact in the second half of the year and into 2025. Overall, we believe these actions in our stores will drive improvements in satisfaction.” including customer service and shelf availability and convenience; improve the associate experience in our stores, including improved employee engagement and retention, and drive improvements in financial results, including sales and losses. “he added.
