Self-checkout (SCO) kiosks have a lot of benefits. They get customers in and out of the store quickly, reduce labor and for many consumers, improve the shopping experience.

But while having the option of self-checkout provides shoppers both speed and autonomy, there are drawbacks too. Common c-store purchases require age verification via employees, shrink is a growing concern throughout the retail industry and, while some customers prefer self-checkout, others do not.

“Self-checkout is a very polarizing technology,” said Neil Saunders, managing director, retail, GlobalData Retail. “Some consumers love it, others hate it and many are somewhere in the middle.”

Retailers have implemented self-checkout stations over the past few years as “a way to reduce costs and take out some of the bottlenecks at the checkout,” Saunders said. “However, increased shrink rates and rising customer dissatisfaction have caused several retailers to pause and review. I do not think self-checkout is disappearing, but there are now more restrictions around how its deployed and used.”

These reevaluations of the technology can already be witnessed across the wider retail industry. Dollar General’s CEO Todd Vasos made headlines in March when he told investors that, despite adoption rates for self-checkout being high, the retailer was converting “some or all” self-checkout registers to assisted-checkout options in around 9,000 of the 14,000 stores in which SCO is available. The retailer also plans to completely remove self-checkout from more than 300 stores with the highest shrink.

Dollar General also imposed five-item limits to transactions in the remaining stores offering self-checkout. In the same month, Target announced that it was limiting self-checkout to customers with 10 items or less and ramping up the number of staffed checkout lanes.

While some retailers are voluntarily imposing item limits, a California bill seeks to require stores to limit SCO lanes to purchases of 10 items or less. In addition, Senate Bill 1446, introduced by State Senator Lola Smallwood-Cuevas in February, would require grocery and drug stores to offer at least one manual checkout station, require that employees attend self-checkout machines and create other restrictions.

Self-checkout is a rapidly expanding practice within convenience retail, according to Jack Hogan, senior vice president of sales and partnership at Mashgin, a marketer of SCO machines. However, he said that adoption within the c-store channel is “still slightly behind traditional grocery or [big box]-style locations as nearly half of c-store transactions require some form of cashier verification.”

Benefits of Self-Checkout for C-Stores

While there may be a list of questions to consider and challenges to overcome with SCO, 43% of retailers in the convenience and fuel industry along with the grocery and food industry have currently adopted the technology, according to an Incisiv report (in partnership with NCR Voyix). Another 34% are piloting the tech or planning to implement it in the future.

Retail executives who have already implemented SCO reported benefits for both retailers and shoppers:

• 75% believe the SCO stations enhanced store layout and space utilization.
• 79% reported a better customer experience.
• 58% reported lower labor costs.
• 51% reported improvements in operational efficiency.

When implemented correctly, self-checkout can drive both additional sales and efficiency.

Within convenience stores, “Self-checkout should play a role, as most people are only buying a handful of items, which makes using self-checkout easier,” noted Saunders. “It also means the design of self-checkout stations can be more compact compared to bigger supermarkets.”

And when implemented correctly, self-checkout can drive both additional sales and efficiency, Hogan said. “That means that lines in the store become shorter, more customers buy something thanks to those short lines, and staff have more time to keep the store clean, stock shelves, and help customers who need extra attention. As an additional benefit there should also be some increases in fuel sales as well, thanks to clearing the forecourt at a faster pace.”

Amit Acharya, vice president, product—retail self-checkout and POS endpoints, NCR Voyix, said that when self-checkout is deployed in a “thoughtful data-driven way … it can remove the queues and provide consumers with choice. The point about self-checkout is not that you’re making somebody else do the work, you’re providing them with a choice.”

Additionally, c-stores operate on a very lean labor model, he noted. “There are usually two or maximum three people in the store. SCO allows you to serve multiple customers with one cashier.”

Redistributing those employees to more effective tasks can make a store’s labor model more efficient. “This where you now drive higher experience versus an employee just waiting for somebody to check out. So, you’re effectively removing the inefficiencies of queue busting and poor stock rotation that leads to lost sales,” Acharya explained.

Evolving Best Practices for Self-Checkout

With both benefits and drawbacks to SCO, it’s important to consider best practices to make the most of the investment.

From the very beginning of a company’s self-checkout journey, retailers should be very clear on the intended outcome, Acharya said.

“What is the outcome you want to drive as a retailer?” he asked. “What are you trying to accomplish? What are your goals? Define that experience for the guest and for the attendant. That’s the key that will drive your front end. It’s not about putting a self-checkout machine in a corner.”

He also advised retailers to make sure everyone is on the same page in order for the implementation to be successful. “The IT team who’s deploying it, the marketing team, the stakeholder. … That alignment is important as to why are we doing it and how can all of us help with success?”

Once SCO technology is in place, everyone needs to know how to use it, and that requires training both shoppers and frontline associates at different points of the process. “When to greet a guest, how to greet a guest, how to handle an intervention, how to manage the experience,” Acharya said.

“You need your staff to love the solution in order for your customers to love it,” Hogan said. “It’s really important to make sure your staff see self-checkout as a tool you’ve brought them to help them at their job, not a replacement. If you train your team on making the most of self-checkout and teach them how, it will help them do better in the other parts of their job, and they will happily teach customers how to use and be comfortable with the solution.”

Retailers also need to express to customers that self-checkout isn’t replacing employees, Hogan added. “It’s allowing them to complete the other tasks that exist in the store daily. One way we see some stores handle this is they will sometimes put a ‘now hiring’ sign on top of our kiosks or put a little nametag on the Mashgin to emphasize it’s part of the team.”

John Goodwin, director of product management, Fujitsu Frontech North America, stressed that the human touch is important to reducing shrink.

“The self-checkout attendant dedicated to the self-checkout units combined with weight-based security is critical. Yes, new vision-based security solutions are available to assist with product identification, missed scans and ticket switching, but these advanced solutions depend on the self-checkout attendant,” Goodwin said.

And self-checkout is not just set it and forget it technology, said Goodwin. “Every first-time self-checkout retailer that initially implements self-checkout assumes they can simply install and let it run,” he said. “However, operational changes are needed, ranging from customer interaction to associate day-to-day procedure changes.”

It’s important to make sure your staff see self-checkout as a tool you’ve brought them to help them at their job, not a replacement.”

Beyond training associates and customers and keeping up with the evolving procedural needs, the most important thing, according to Hogan, is to place self-checkout tech in the right locations.

“Typically, this is the main counter where staff are,” he said. “We found that trying different locations around the store often leads to confusion and lower adoption.”

Retailers should also offer all tender types at the self-checkout. Customers should be able to use cash, credit and their loyalty points at the self-checkout lane. “We’ve also found that selling fuel at self-checkout can be very powerful, especially in markets that have high rates of cash use. This opens up fueling much faster to unbanked customers who may otherwise have to wait in line. … As a result, those stores become preferred by unbanked customers and turn cars in their forecourt much faster,” said Goodwin.

The Power of Personalization

About 50% of retailers are using self-checkouts not just to speed up checkout, but as an engagement terminal to connect with customers, according to Incisiv’s report. Incisiv suggested this signals a clear shift from SCO as a tool for efficiency to SCO as a tool for a richer, integrated experience. Furthermore, the study found 37% of retailers display personalized ads or product suggestions at SCO terminals, using customer purchase history to fuel these insights.

Personalization is also regional—the same retailer’s store in North Carolina and in Florida shouldn’t be the same, Acharya pointed out. “Your front end should be personalized. For example, if a local team wins a game, [that local store] should be able to celebrate for a week and then quickly go back to their own format.”

Leveraging rewards programs is critical for personalization at self-checkout.”

Once a loyalty card is scanned or through biometrics, the experience at the self-checkout should be personalized to the shopper. C-stores, for example, could remind a shopper that on their last visit they bought a particular candy bar and offer it at a discount, along with reminding the customer where to find it.

“Leveraging rewards programs is critical for personalization at self-checkout,” Goodwin agreed. “Through rewards, self-checkout can know that I always get my medium coffee in the morning or that I haven’t been in-store in a few days and welcome me back with a free donut offer. Anything and everything is possible.”