Store of the Future   //   June 3, 2024

Retailers are continuing to pull back on self-checkout

More retailers like Safeway and Dollar General are rethinking their self-checkout strategies.

Bay Area news station KTVU reported this week that a few Safeway locations closed down self-checkout. A spokesperson told the station that the lanes would be removed due to increasing theft. The move follows retailers like Target’s decision earlier this year to limit self-checkout lanes. Kroger reportedly went back to having cashier-staffed lanes at a Dallas store in late January after experimenting with a self-checkout-only setup.

Dollar General originally announced plans to pull back on self-checkout in March. Last week, CEO Todd Vasos said in an earnings call that the company will now eliminate self-checkout in “the vast majority” of its 18,000+ stores. So far, it has eliminated self-checkout from 12,000 stores.

“While this represents a significant change in our stores, we believe this is the right course of action to drive increased customer engagement while also better positioning us to begin reducing shrink,” for the rest of the year and into next Vasos said, according to a transcript. “Moving forward, we plan to have self-checkout options available in a limited number of stores, most of which are higher volume and low-shrink locations.”

Such decisions from Safeway and Dollar General show that when it comes to self-checkout, one size doesn’t fit all. Checkout and inventory experts said the best practice for most stores is to offer options at the same locations. At this point, many shoppers expect to see self-checkout after getting used to the contact-free method during the onset of the coronavirus pandemic; a survey from the Food Industry Association found that 30% of transactions were made on self-checkout in 2021, almost double from 2018. Still, retailers are clearly recalibrating their approaches to self-checkout.

Jessica Grisolia, director of retail industry solutions at scanning software company Scandit, told Modern Retail that retailers must constantly reassess their store environments to make sure they are delivering the right experience. Store layout can be a key factor when it comes to deterring theft, she said. But eliminating self-checkout altogether runs the risk of upsetting customers who’ve come to expect it. Older shoppers, those who have large orders or parents wrangling young children may welcome checking out with a cashier instead of loading up items themselves. But, Grisolia said, younger shoppers and those in busy environments are more sensitive to waiting times.

“Having the option to checkout independently is an expectation most shoppers have these days,” she said. 

While some stores have tested out standalone self-checkout lanes, others have begun unveiling mobile apps for transactions. Walmart has a mobile checkout option for its Walmart+ members. Apple allows in-store shoppers to pay for accessories from their iPhone via Apple Pay. Instacart is continuing to expand its smart cart offering, most recently with Save Mart, which eliminates the need for manual scanning altogether.

Grisolia said retailers can these use app-based methods to add more value, like personalized coupons, cross-selling services or curbside pickup. 

For stores that do pull away from self-checkout, the retailer will have to ensure the customer experience remains positive. Vasos from Dollar General said the company is prioritizing welcoming customers and having a positive checkout experience. “As we have continued to move away from self-checkout in the majority of our stores, we believe this focus is even more important in serving our customers and supporting our sales growth,” he said.

Vasos also said the customer feedback, so far, has been positive. “The overall reaction from the consumer is, ‘Thank you. We like the checkout with someone that we can interact with at all times at the front.'”

But once technology has been released, it’s nearly impossible to eliminate it altogether. And that means working through the kinks. Bloomberg reported last week that a technical issue affected pricing at self-checkout lanes in about 1,600 Walmart stores, meaning some customers were charged too much and others too little. A spokesperson told Bloomberg that more than 80% of customers who have been overcharged so far have been reimbursed. Walmart did not immediately respond to a request for comment from Modern Retail.

On its website, Walmart says it will continue to offer both cashiers and self-checkout — as well as a mobile scanning option for Walmart+ members. Walmart will also be remodeling 650 U.S. stores this year, and building 30 new Sam’s Clubs in the U.S. over the next year. It also plans to open 150 new supercenters in neighborhood markets over the next five years, most of which will be new locations.

JW Franz, the IoT director at supply chain and automation company Barcoding Inc., told Modern Retail that the popularity of self-checkout has become an important part of the company’s own business operations. Barcoding helps companies track their supply chain and collect data about products’ movement, which can be used at point-of-sale systems in self-checkouts.

“Two years ago this was never something we were talking about, now this is something that has become front and center for us,” he said.