It seems like more retail stores, especially big box stores add self checkouts every day. Some stores have more self checkout stations than manned registers, but is it worth it?
While self checkouts have their advantages, there are some drawbacks too. Understanding the pros and cons can help you decide if implementing self checkouts is right for you.
The Benefits of Self Checkout
We’ll start with the benefits because there are plenty. Some you probably already realize, by some may not be as obvious until you really think about it. Self checkout can be a wonderful benefit that keeps many customers happy and helps alleviate your labor problems.
Here are some of the top benefits.
Shorter Wait Time for Customers
A shorter wait time for customers means happier customers, right? Think about a grocery store. You have a customer with 3 items in his/her cart and in front of that customer are 4 customers with carts overflowing with groceries.
If the person with 3 items could go through a line that’s shorter and faster, they are more likely to continue patronizing your business. If they are constantly held up in line, they will likely think twice before ‘running in’ for an item.
Customers Like It
We all want instant gratification today and self checkouts help foster that feeling. Whether you own a retail store or restaurant, giving customers the option to order or checkout on their own makes them feel empowered.
They often feel like they are moving faster, or some people just feel less intimidated when they don’t have to deal with an employee. Some studies even show that customers at restaurants are more likely to upsize their orders when they use a self-checkout.
Lower Labor Costs
Self checkouts require fewer employees, which can be good for your bottom line. Less employees means fewer wages and benefits you have to pay. Even if you keep the same number of employees, you can put them to use in other areas of the business that may need more focus. One employee can manage multiple self checkout stations in most cases.
Takes up Less Space
Self checkout stations usually take up less room than a full checkout station manned by an employee. When the registers take up less space, you can optimize use of your space, making more room for upselling opportunities or other ways to make your home look perfect.
The Disadvantages of Self Checkout
As advantageous as self checkouts are, there are some downsides every business owner should know too. The cost and maintenance are two of the primary concerns many business owners have.
High Upfront Costs
The cost to set up self checkouts can be cumbersome. A study done by MIT showed that setting up a 4-lane self checkout cost an average of $125,000 and that’s just to set it up. You still have the cost of training employees, the labor to oversee the systems, and the cost of maintenance and repair.
Not All Customers get It
It’s imperative that there is always at least one employee manning the self checkout stations, if not multiple if you have a lot of stations. Customers can run into system issues, not know how to ring themselves out, or be unable to ring up an item because it doesn’t scan.
It costs money to have employees oversee the stations and it can even frustrate customers who think they will get out of the store faster using self checkout only to be held up because they don’t understand how it works.
Higher Risk of Theft
There is a much higher chance of theft especially when the stations aren’t manned 24/7. Skimmers are small devices crooks put on credit card machines to grab customers’ credit card information. They are most common at gas stations and ATMs, but now with the onslaught of self checkout stations, we’re seeing the issues even more.
Less of a Chance to Upsell
There is much less human interaction with self checkout which decreases your chance to upsell customers or even to engage them.
Even though most customers are in a hurry and want nothing to do with standing in line to wait for a cashier, they often enjoy the human interaction. Whether the cashier upsells warranty plans, other products, or just talks to the customer about their day, there is something about the interaction that creates loyalty. Without it, you might have a harder time keeping up your customer base.
Equipment Repair Happens Often
You might find that your expenses to keep up with your business increase with self checkout stations. Since they aren’t stations run by an employee and hundreds of people can use it a day, the system can break down easier and require more repairs.
You may find that your repair bills are higher or that you have more downtime because you need to call someone out to fix the system before it can be used again.
Self checkout can be great when it’s used right and in the right situation. It’s usually a good idea to still have the option to check out with a human because not everyone likes the ‘robotic feeling’ of dealing with a computer.
Self checkouts can be very handy though for those customers that want to get in and out, and to help alleviate some of your labor costs. Look at the big picture when deciding if it’s right for your business and if you decide that it is, make sure you take the necessary security measures to reduce the risk of theft.