Self-Checkout Goes Mass Market

Self-service shopping has gone mainstream in supermarkets, drug stores, mass merchants and home improvement centers. Self-checkout systems will generate transactions worth $70 billion in 2004, according to a new study from IHL Consulting Group. The 2004 North American Self-Checkout Systems Market Study also forecasts that the value of these transactions will increase to over $330 billion by 2007 as many more systems are deployed in the next few years.

In stores currently using self-checkout systems, as much as 40 percent of the total number of transactions now go through the self-checkout, allowing retailers to provide more customer assistance within the aisles to help customer find products. Home Depot now has more than 3,200 self-checkout lanes installed.

The key technology players in self-checkout are NCR, IBM and Fujitsu Transaction Solutions. NCR currently dominates the market but IBM and Fujitsu have recently entered the fray through key acquisitions, bringing with them significant point-of-sale success.

A synopsis of this $1,695 report on retail self-checkout can be found on IHL’s website.

Self-checkout systems still appear to frustrate many traditional shoppers, but grocery store shopping trends show a change in pattern that makes self-checkout likely to gain more rapid acceptance there. Instead of making a weekly stop to buy all the needed groceries, shoppers are visiting the supermarket more frequently and making fewer purchases. This trend should continue in younger shoppers and in the baby-boomer generation as it retires and has more time on its hands.

Storeowners like the labor savings inherent in self-checkout. However they probably should invest in a greater marketing and education effort to encourage use. Look for self-checkout to migrate both up and down market as people begin to use it in the major chains. Once it hits its tipping point acceptance should become near universal. Don’t forget, there was a time when people didn’t want to use automated tellers.

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