Future of Change
The future is happening more quickly than any of us predicted. This futuristic store model, created in 2011, was dismissed as unreasonable and impossible. However, the technology is now past the prototype stage and has come to pass:
Autonomous checkouts, with lower labor costs, speed, and flexibility, have grown from 350 stores in 2017 to a projected 10,000 stores in 2024; according to Global Market Insights, the self-checkout market will reach $3 billion by 2024.
What to Consider
1. Customer Frustration
Walt Disney, master of customer experience, says “Leave ‘em happy!” That’s why you’ll find Goofy helping out in the parking lot. Disney can’t afford a lost, confused guest. Fast forward to your store: What does “Unexpected item in bagging area” scream at customers? “This is not working” and “you’re probably stealing.” Chains hire actors to create soothing voices in their checkout systems, but I’m not sure that’s enough to avoid customer drop-and-run.
iPad and iPhones were supposed to reduce customer confusion and increase employee information. Lowe’s gave 42,000 iPhones to employees; Costco employees use iPads. Many employees don’t use them and those that do, don’t seem to get the hang of interaction with both humans and technology. If you implement iPad use, train people how to a. use it and b. to maintain a connection with a human.
2. Shrinkage
Sadly, chances are that someone is stealing with self-checkout; about 4% of items that pass through are not paid. If this is an issue, and you’re not ready for a full-blown system, check out product recognition technology at www.tiliter.com. The system saves time and prevents theft, and reduces the need for wrapping and labeling individual items. The system uses AI and computer vision to identify an item, and their Vision System uses a plugin camera and installs on existing systems. The system removes loss from people entering the wrong information.
What’s Next?
1. Checkout Free Stores
Amazon gathers vast amounts of data with in-store cameras, transit targeted radio signals and Bluetooth tracking systems. Macy’s and Barney’s already use a system that tracks your movement around the store, and targets ‘helpful’ ads along the way. iPhone X adds facial recognition technology and early stages of emotional recognition; the system reads emotions on customer’s faces and alerts sales staff to respond. Data analytics permit sophisticated and intrusive, sales interventions: For example, supposing a customer grabs a six-pack of Guinness beer, only to exchange it a few minutes later for Moosehead. Amazon learns that the customer is ‘price-sensitive’ and sends coupons for higher-margin items.
2. RFID Autonomous Carts
China’s BingoBox already has 500 autonomous stores. Here in the US, Caper’s autonomous cart uses built-in sensors to identify items in a virtual basket. Caper lets shoppers find deals, be pointed to shopping list items and pay on the cart instead of waiting in line. The cart has sensors, a barcode reader, an interactive screen interface with a map, shopping list manager, deal alerts and PayPoint. Studies show the carts increase basket size by 18%, by offering customers overlooked products.
Self-Checkout Pros and Cons
Pros:
Customers are in and out faster, can just grab an item and go, without waiting in lines or making small talk.
65% of customers like self-checkouts because they don’t have to interact with employees, and avoid being judged for buying junk food. So they add more higher-priced junk food which ups the bottom line.
Summary:
1. Nothing will replace the personal connection that humans make. Hire people who like people and give them the freedom and support to be themselves (that was a blinding-flash-of-the obvious. but you’d be surprised how many don’t get this right).
This morning I checked out of Trader Joe’s in Encinitas with frozen Egg Frittatas. Kelly enthusiastically offered me her recipe for homemade frittatas that sounded so good that I went to get additional items. It slowed the line a bit, but others caught the enthusiasm.
2. If you’re not already installed, skip stopgap technology and save for RFID. Focus your current efforts on employee training and in-store customer experience. It’s so easy to create a special, unique experience in-store, I’m mystified why all stores don’t do something. Trader Joe’s always have interesting free food samples at the back of the store, which creates an experience and social reciprocity. I am more likely to return money to the store if I perceive that I have received something free from it.
3. If this is all overwhelming, why not do what the Gimmewald, Switzerland Honest Shop does. Leave items open with suggested donations. It seems to work.
Since 1988, Dr. Janet Lapp has been one of America’s most sought-after change leadership experts. She is a licensed Psychologist, producer of the Emmy-nominated CBS-series “Keep Well”, inductee to the Speakers Hall of Fame, and author of five popular books on helping people change. Contact her through your speaker’s bureau or contact Liz at elizabeth@janetlapp.com.
