Study after study in recent years have pointed to the checkout stand as a massive headache for retail customers. As shopping has migrated online, where a few clicks are all it takes to complete a transaction, consumers have grown less and less patient with a process that has remained much the same for years.
Limitations in technology and the supermarket format have long prevented grocers from speeding up their checkouts. But recent developments are helping retailers make incremental improvements and, in some cases, skip the checkout altogether — providing a crucial point of differentiation that also narrows the technology gap between in-store shopping and e-commerce.
So while checkout-free Amazon Go may have grabbed headlines earlier this year, a growing number of retailers are finding out it doesn’t take teams of engineers and millions of dollars to make the checkout experience better for customers.
Bypassing the register
Macey's, which operates 12 supermarkets in Utah, isn’t known for being on the cutting edge of retail technology. But recently, it became one of the few retailers in the industry to offer a new checkout system that lets customers scan products and pay using a special smartphone app.
The app, called Skip Checkout, uses barcode scanning technology to log each product. For produce, shoppers weigh their choices using a special scale, which prints out a scannable barcode. Once customers finish shopping, they hit a “Ready to Checkout” button then proceed to a special front-end station, where an employee quickly checks their purchases and payment is applied to a pre-loaded credit card. Shoppers can also bag their products if they wish before heading out.
In addition to its scan-and-pay capabilities, Skip Checkout also links to shoppers’ loyalty accounts, advertises store promotions, and lets customers build grocery lists that the app will then populate with aisle numbers indicating where each item can be found.
Macey’s piloted Skip Checkout at two stores, then quickly expanded to three more this spring. Ashlee Johnstun, Macey’s customer service operations manager, said that the Skip Checkout team originally approached the regional chain last June. Macey’s felt the system could give stores a leg up on the competition — a hunch that has proven to be accurate, according to Johnstun.
“People are coming to our stores specifically because of the app,” she told Food Dive. “We’re continuing to see new downloads every day.”
“People are coming to our stores specifically because of the app. We’re continuing to see new downloads every day.”
Customer service operations manager, Macey’s
Macey’s declined to share exactly how many times the app has been downloaded, though a spokeswoman for Associated Food Stores, which owns and operates Macey’s, told Food Dive the five stores have seen “several thousand downloads and nearly as many unique shoppers” since offering the Skip Checkout app.
Similar to this system, Sam’s Club offers a “Scan & Go” app that lets customers ring up purchases and pay using their smartphones. The club store began testing the program back in 2015 and quickly expanded before making the app available to customers in all 645 of its stores last year.
Parent company Walmart recently started testing “Scan & Go” at stores in Texas, Florida, Georgia and Arkansas. The retailer, which has 4,600 stores nationwide, is also trying out numerous other initiatives aimed at cutting checkout wait times for its customers. The company recently installed express lanes at some of its money services counters, while the retailer’s pharmacy department is currently testing a system that lets shoppers pay for their prescriptions through their smart phones before they step foot in the store.
With competition for consumer dollars greater than ever, grocers view technology that allows consumers to bypass checkout as a key differentiator. Target, whose grocery sales have struggled of late, plans to open a prototype store near Houston this fall that features employees with handheld card scanners walking the aisles.
Brian Kilcourse, managing partner with RSR Research, a retail technology consulting firm, said there’s another big reason why retailers are interested in finding alternatives to the traditional front-end checkout.
“That real estate at checkout is really, really valuable selling space,” he told Food Dive. “You can use it for a lot of other things, and that’s exciting for retailers.”
Most retailers aren’t working to make their checkout lanes obsolete. But many are trying to make the existing setup faster through improved layouts, staff training, technological innovations and other avenues.
Whole Foods has long tinkered with checkout technology. Last year, the company updated its point-of-sale systems to make scanning and payment faster. It’s also experimented with self-service kiosks in prepared food departments that allow shoppers to order and pay for meals while skipping the checkout line. The natural and organic retailer, which received a $13.7 billion acquisition offer from Amazon last month, also installed lane assignment screens and queuing lines at its busiest locations.
Aldi stores in the U.K., meanwhile, have employed decidedly low-tech tactics to speed up checkout. This includes employee training that emphasizes speed, along with product barcode placement to encourage faster scanning. The company claims these steps make its checkout lanes 40% faster than competitors — though many customers complain the experience stresses them out.
Grocers are also turning to mobile payment systems like Apple Pay to speed up front-end service. These systems, which also promise increased security for shoppers, have been widely adopted across the retail industry. But while adoption is growing, many consumers remain reluctant to use these platforms. According to a recent report from Bank of America, just $1 out of every $148 spent at grocery stores comes from a mobile wallet. Nevertheless, retailers like Walmart have introduced their own payment platforms, which according to Kilcourse have the added benefits of reducing financial fees and increasing loyalty.
Hy-Vee, which operates 240 stores throughout the Midwest, is currently piloting a system that uses colored lights to indicate how long lines are at each register. Using sensing technology, the lights, which are positioned above each lane, glow green, yellow or orange to indicate how many other customers are waiting. Green indicates zero to one customers, yellow indicates one to two customers, while orange means there’s more than two customers in line.
Jacob Richards, president of Indaflow, the Omaha-based technology company that developed the system, said the goal is to speed up customer processing through the checkout lanes and, ideally, to avoid frustrating wait times for shoppers. Along with its traffic light indicators, Indaflow’s system also tracks customer traffic lane by lane and offers staffing recommendations to help retailers like Hy-Vee keep up with shopper flow.
Indaflow started its pilot run with a single Hy-Vee store in Papillion, Nebraska last summer. In November, the grocery chain expanded the pilot to four more stores in Nebraska and Iowa.
“At any point of the day, a customer should be able to reach your checkout and start unloading groceries right away,” Richards told Food Dive.
Luke Tingley, Hy-Vee’s vice president of information technology, told Food Dive in an email that Indaflow’s colored lights “are intuitive for our customers to use,” while data the system provides helps managers improve their front-end operations.
“Our store directors can view reports that show peak volume periods and checkout times,” he said. “They can compare their staffing levels and checkout times and then evaluate how they’re measuring up against other stores in similar scenarios.”
“Grocers have always loved self-checkout, but the truth of the matter is no matter how much they pitched it as a customer convenience, it’s not convenient at all.”
Managing partner, RSR Research
Asked whether Hy-Vee plans to expand Indaflow’s system to more stores, Tingley noted that the test period is still ongoing, and that the decision will come down to factors like customer satisfaction and overall lane speed. He highlighted other efforts by the retailer to speed up payment and processing, including its Aisles Online e-commerce platform, which offers home delivery and store pickup; and a mobile app for its Market Grille restaurants that lets customers order ahead.
Hy-Vee, like numerous other retailers, is also putting more self-checkout stands in its stores. For years, retailers have turned to these stands to save on labor and improve front-end flow. Studies show customers enjoy self-checkout, but research also shows that the machines make shoplifting easier.
Research also indicates that, contrary to popular belief, self-checkout is not any faster or more efficient than staffed lanes — and in fact may actually be slower.
“Grocers have always loved self-checkout, but the truth of the matter is no matter how much they pitched it as a customer convenience, it’s not convenient at all,” said Kilcourse.
In their quest for a faster checkout experience, Kilcourse noted, there’s only so much retailers can do to speed up a system that requires scanning and bagging products. Amazon Go, which has delayed its opening due to glitches, shows promise, as do self-service apps like Skip Checkout. But with wider adoption of those technologies still far off, most grocers have to make do with an imperfect system.
“The checkout process is inherently slow,” said Kilcourse. “No matter what, things still have to be scanned and bagged, and that takes time.”