Beyond the Beep: The Evolution of Self-Checkout

In a previous blog post - It’s Time to Rethink Self-Checkout - we explored the rapid rise of retail self-checkout and some of the significant issues prompting its reevaluation, including the removal of the technology by many retail chains. 

This debate continues, highlighting both the technical limitations and customer service issues that exist with many current implementations of self-checkout.

So, what are some of the current problems with retail self-checkout and how can organizations deal with the ongoing evolution of this technology? In this blog, we'll explore how a strategic approach to payment testing can help manage these issues. 

Clean-up on Aisle 9…

The recent announcement by Dollar General's CEO that it would remove self-checkout from “the vast majority of stores” as part of a larger overall shrink reduction effort, highlights one of the most significant drawbacks of self-checkout.

A recent study published by the Wharton School of Business shows that the industry-wide shrink rate from self-checkout is estimated to be between 3.5% and 4%, compared with a rate of less than 1% for cashiers. 

For many retailers who already operate on razor-thin margins, this presents a significant threat to their bottom line.

Additional articles continue to surface highlighting other issues such as ongoing consumer frustration with the technology, including the fear of being falsely accused of stealing, the security of both customers and store staff, as well as fears about the ongoing displacement of cashier jobs that are so critically important to so many unskilled workers. 

From the retailers' perspective, they are increasingly discouraged by the level of shrinkage caused by fraudsters who abuse the self-checkout systems. 

These developments underscore the need for self-checkout technology to evolve in several key areas and emphasize the critical role that an effective payment testing strategy will play going forward.

Warning: Regulation on the Horizon

It is no surprise that all of this public debate has caught the eye of regulators across the globe. Here in the USA, the California State Senate is progressing legislation that will impose a number of restrictions on retail self-checkouts. 

Similar initiatives are underway in other US states, including Rhode Island and Oklahoma. 

Internationally, self-checkout concerns are getting significant public scrutiny in Australia, Canada, the UK, and many different markets. Say what you will about the retail self-service initiative, but involvement from regulators will almost assuredly bring more cost and complexity to the equation.

Navigating the Self-Checkout Maze

The evolution of self-checkout will certainly continue, but in what direction and at what pace? 

Consumers are currently caught between retailers who want to use the technology to provide a positive shopping experience and fraudsters who are abusing the system and causing grief for everyone but themselves. 

Change is needed, but so is caution. Whenever payments are involved, it is critically important for both retailers and financial services providers to ensure that whatever route they take is well-designed, thoroughly tested, and expertly executed.

Why Testing is Critical to the Future Success of Self-Checkouts 

No one knows how self-service technologies will evolve and where the industry (and regulators) will take it. Introducing AI into the mix may make a difference, but that technology carries its own set of issues and risks. 

If you accept the simple fact that self-checkout - and payments - will continue to evolve, you can take steps to effectively manage the change by updating and upgrading your payment testing operations.

Dealing with continual disruption requires a strategic approach to testing that emphasizes speed, accuracy, and flexibility. 

Gartner says organizations that aggressively pursue automation will lower operational costs by up to 30% by combing automation technologies with redesigned operational processes.

Interested in learning more about how automation can streamline and optimize your payment testing processes to help your organization deal more effectively with rapid change? Get in touch with the Paragon team today. Our innovative solutions are specifically designed to maximize the efficiency of your testing operations.