About
With the continuous innovation in technology and the evolving needs of customers, the retail industry is transforming toward automation. Other than moving in-store purchase to an online platform, retailers are also upgrading their in-store setting and seeking to improve the shopping experiences of customers. These technologies are called Self-Service Technologies.
Pros
One of the most significant advantages of introducing the self-checkout technology for retailers is saving the time of customers and prevent the checkout from becoming overcrowded. Take the example of Amazon Go, a self-checkout chain grocery store first launched by Amazon in early 2017 [2]. Customers need to download the Amazon Go app before entering the store and scan their phones when they arrive. Some in-store technologies track their purchases and enable them to walk out with their account being charged by Amazon automatically [2]. Customers do not have to wait in line as shopping in a traditional grocery store. Instead, they can purchase faster, and their time is saved. In this way, customer satisfaction might increase, helping the retailer increase its competitiveness [2]. On the other hand, the checkout lines would diminish, reducing the possible space needed for waiting lines.
With the installation of self-checkout technologies, retailers can reduce the number of checkout assistants employed, or they may completely cut the checkout assistants [2]. According to an interview with Gruber, an Amazon Go store manager, there could be labour savings which counted toward a considerable percentage of the total cost of operation, which can also reduce the workload of the human resources department, since it is difficult to find employees these days [2]. While the labour cost is reduced, if the store maintains the same revenue and other expenses as before, their profits are expected to increase.
Cons
With the possible saving from reduced checkout assistants, the implementation of self-checkout technology is huge. According to CardFellow, a typical 4-lane self-service checkout setup costs $125,000. Most small businesses cannot afford this technology. As for mid-sized chain stores, they may still face cash problems by implementing several kiosks at each store.
An Accenture study found that 77% of US customers prefer interacting with humans than digital devices in service-related issues [3]. The personalized service may be difficult to be completed by automized machines. Especially for senior people who are used to the person-to- person service and are more likely to need personal interaction, they might regard this new method of shopping as a lack of services [1]. Therefore, without knowing the major customers of a specific store, it is difficult to predict whether the implementation of the SSTs would increase the customers' shopping experiences.
Conclusion
Technological innovation may provide a better shopping experience for those who are adept to the technology, but retailers would face huge costs to implement them. Moreover, for retailers whose target audience are senior people, this may be a technology upgrade they choose to skip and instead focus on personal interactions.
References
[1] Dean, D. (2008). Shopper age and the use of self-service technologies. Managing Service Quality: An International Journal, 18(3), 225–238. https://doi.org/10.1108/09604520810871856 Dwyer, B. (2019, November 07). Pros and Cons of Implementing Self Checkouts. Retrieved Feb 18, 2021, from https://www.cardfellow.com/blog/self-checkout-should-you-implement-it/
[2] Polacco, A. & Backes, K. (2018). The Amazon Go concept: Implications, applications, and sustainability. Journal of Business and Management, 24 (1), March, 79-92. DOI: 10.6347/JBM.201803_24(1).0004.
[3] Zhu, Z., Nakata, C., Sivakumar, K., & Grewal, D. (2013). Fix It or Leave It? Customer Recovery from Self-service Technology Failures. Journal of Retailing, 89(1), 15–29. https://doi.org/10.1016/j.jretai.2012.10.004
