A RETAIL expert is weighing in on how stores are cutting expenses by utilizing self-checkout while making customers work for the items they’re purchasing.
Shoppers tend to have a love-hate relationship when it comes to self-checkout.
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Some customers love to use self-checkout as it provides a quick and easy trip to the store while others say it takes twice as long to use.
Some people have even threatened to boycott stores like Walmart over their self-checkout systems and plan to never shop at the big box retailer again.
Santiago Gallino, a Wharton operations, information, and decisions professor has even pointed out that stores could potentially lose their customers due to self-checkout.
“If you are understaffing and forcing customers to use self-checkout, then you start to annoy your customers, and this is going to backfire,” he told Knowledge at Wharton.
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“Your customers will stop going, especially if it doesn’t have a connection to lower prices.”
Gallino also noted that most retailers use self-checkout kiosks to cut labor costs.
“It’s not to make checkout more efficient. They are basically transferring the labor to the customer,” he said.
While self-checkout systems cut costs for stores by not hiring more employees, they also tend to bring in higher theft rates.
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“It’s facilitating errors and, in some cases, the steal,” Gallino said.
“In some cases, it’s an unintended steal, but you’re now creating an inventory information problem. Now there is additional noise in the system. It’s hard to replenish and to know what is in the store.”
One Walmart store has even closed down its self-checkout lanes due to theft.
“Local @Walmart closed all self checkout lanes,” Jim Rutberg from Colorado Springs posted on X, formerly Twitter.
The tweet also included two photos of an empty self-checkout area with up to 17 registers completely shut down with a red light above them.
“I joked to the person ringing up my groceries that it was ironic; they’d just trained us to do the job,” the user wrote.
“She said they decided to only open them when lines at full-service checkouts get long. Too much theft.”
A recent study by Grabango has revealed that theft rates at self-checkouts are 16 times higher than at cashier registers.
The results showed that when applied to a market size of nearly $1 trillion with a partial loss rate of 3.5% at self-checkout, the machines cost food retailers over $10 billion in lost profits every year.
However, despite theft being an issue, retail expert, Gallino believes self-checkout is here to stay.
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“I think we’re going to see these in the future, for sure,” he told Knowledge at Wharton.
“At the same time, I think some retailers are going to be smarter about when and how they use it.”
https://www.the-sun.com/news/10241376/retail-expert-self-checkout-transferring-labor-customers/