You are here
FRANKLIN, Tenn. - North American consumers transacted nearly $128 billion in sales using self-checkout lanes, ticketing kiosks, and other self-service machines in 2003 -- but for some retailers, high-touch is still the way to go.
Self-checkout activity was up 80 percent from the previous year, according to a new research study conducted by IHL Consulting Group, an independent firm that provides market analysis and business consulting services for retailers and information technology companies that focus on the retail industry.
What's more, the revenue generated by self-service transactions should continue this pace of growth in the coming years, said IHL president Greg Buzek, president. "We expect to see expenditures made at self-service kiosks to rise by about 73 percent this year and 88 percent in 2005," he said.
Demand for self-checkout systems should push the dollar value of transactions to nearly $1.3 trillion by 2007, Buzek noted. "Consumers have become much more savvy. Their time has also become more valuable and limited, and self-checkout is one way they can speed along their buying experience," he said. "Retailers and other businesses are finding that self-service kiosks can significantly increase customer loyalty as well as customer satisfaction."
The grocery industry is aligned with these results, though usage may have leveled off a bit compared with other industries where self-service kiosks are newer.
According to Clemens Family Markets' dir. of information systems, Roy Powell, who spoke with Progressive Grocer about the report, usage at his recently installed self-checkout machines has continued to increase, albeit gradually. "After the initial rush to use the technology, traffic at the self-checkout units decreased to a slow but steady increase," he said.
The main reason Clemens implemented self-service technology, Powell said, was to provide an additional checkout or information source to those customers who wanted it. "We weren't expecting usage to [keep] increasing," he said. "It's another service to the customer, and while not everybody is looking for that service, for those who do want it -- you have to have it."
The same goes for information kiosks, according to Powell. Those who don't want to interact with people love the computerized interface.
Still, some grocers have as yet avoided the technology, while they acknowledge the machine's increasing popularity. "I understand their growth," said United Supermarkets v.p. and c.i.o. Scott Gilmour in a separate interview with Progressive Grocer. "To date, United has not installed any self-checkout machines. We are actually one of the few who continue to employ checkers in order to speed the process for our customers, bag their groceries (with a choice of paper or plastic), and carry them to the customer's vehicle with a smile and a word of encouragement.
"We think the personal touch is still extremely important in our industry, and we find it a way to differentiate ourselves from our competitors."
In the market study, "2004 North American Self-Service Kiosks," IHL examined the increasing use of four types of self-service kiosks where payment is accepted: self-checkout systems, ticketing kiosks, check-in kiosks, and food-ordering kiosks. Of the nearly $128 billion spent at these machines in 2003, about $61 billion was attributable to credit, debit, and smart cards.
"Kiosks are fundamentally changing the way consumers do business," Buzek said. "Among retailers, we are seeing anywhere from 15 percent to 40 percent of all purchases are made at self-checkout machines. Usage is even more impressive at airports, where some airlines estimate that up to 70 percent of passengers are avoiding the traditional check-in process and instead using self-check machines."
The report covers self-service kiosks in the United States and Canada, detailing the number and type of kiosks shipped historically. It also provides forecasts for each type of kiosk, both in terms of units shipped and revenue transacted. In addition, the report highlights best practices and best-in-class machines for each class of kiosk.