Self-checkouts might be bad for business.
A recent study published in the Journal of Business Research found that self-checkout systems can lead to less customer loyalty when compared to a regular checkout staffed by an employee, especially for large purchases.
“Retailers are actually facing some dilemma regarding whether it’s really a good decision to install self-checkout systems,” said the study’s coauthor, Yanliu Huang, associate professor of marketing at the Drexel University’s LeBow College of Business.
Huang set out to understand how customers’ loyalty to a store is affected by whether shoppers choose to scan items themselves at a self-checkout kiosk or have an employee ring them up at a regular counter.
“More than one-third of U.S. customers use self-checkout systems, so it’s very relevant to both retailers and customers,” said Huang, who coauthored the research with Farhana Nusrat, her former student.
The amount of groceries matter
Huang and Nusrat ran five separate studies, some of which included asking hired participants to imagine themselves in different shopping scenarios at a grocery store or having them recall their recent grocery shopping trip.
Participants in some of the studies were asked to respond to questions or prompts about their sense of loyalty to the store based on their shopping scenario or experience. Questions focused on how likely the shopper was to return to the store, how valued as a customer they felt, and how the savings during their purchase made them feel rewarded.
Huang and Nusrat discovered that the amount of groceries being purchased matters.
When participants were put in scenarios where they only had six items, the sense of loyalty a customer felt was pretty similar if they used self-checkout or an employee rang up their order. When the purchase was 18 items though, that sense of loyalty was significantly higher for the customer that used regular checkout compared to the self-checkout.
“When you only have a very small basket size, it’s easy to use [the] self-checkout system,” said Huang.
To add or take away self-checkout kiosks?
Self-checkout kiosks represent about 38% of checkout lanes in grocery chains in the country, and the global market size of the machines is expected to continue to grow in the coming years, the study notes.
For a business, adopting self-checkouts can be beneficial because they can make the checkout process more efficient, save the business on overhead costs, and increase productivity, according to the study.
But some businesses are still figuring out if it makes sense to have self-kiosks in their stores.
Some customers might prefer to interact with a human, don’t like the feeling of being surveyed by the kiosk’s camera, or experience technical issues with the machines, among other reasons, the study notes. The kiosks also present downsides for a business and its employees, including an increased risk of theft, lack of opportunity to interact with customers, and the elimination of jobs.
Businesses including Costco, Kmart, and Jewel-Osco have removed self-checkout in many stores, the study cites. Others are still betting on the machines.
A Wegmansset to open in Bucks County, Pennsylvania, in March will have more self-checkouts than regularly staffed checkouts — a departure from the company’s typical stores, but a decision based on consumer demand, according to the Philadelphia Business Journal.
Huang says more research is needed to understand if this study’s findings are also applicable in other retail environments, if the kinds of products being purchased influences the outcome, or if the use of other shopping technologies such as smart carts or scan-and-go apps affect customers’ loyalty.
