On Point: Checking out the future

In a world of change, customer focus is the constant.

Technologies come and go. Today’s bells and whistles will be tomorrow’s antiques—obsolete, unnecessary, unwanted. Even when they are past their prime, we will still want whatever benefits these technologies provided. We will just get them in a better, more convenient way.

Take recorded music for example. Whether you came into the world when the reigning medium was an easily broken 78 rpm record, a vinyl LP that held about six times as much music or a portable eight-track tape, most of the music you listen to now is probably in MP3 format and you may own a player that lets you carry a few thousand songs in your pocket. But the bottom line is that you are still listening to music.

Retail technology changes in much the same way as consumer technology, and its bottom line remains the customer. The combining of the adding machine and the cash drawer into a single device that made supermarket checkout faster must have been amazing to those who were there at the time. But it was manually operated and subject to cashier error, so in the 1970s scanning was developed to simultaneously improve accuracy and speed the checkout process. One downside was that cashiers who scanned needed less training, education and knowledge than those who operated manual registers. This required further refinements in scanning, like PLU numbers (remember when all apples had to be priced the same because so many cashiers could not distinguish among varieties?) and automatic calculation of the customer’s change.

Eventually, smart techies dumbed down the process so much that it could even be delegated to shoppers, and self-checkout was born with the promise of labor savings and reduction of waiting lines. It has not been an unqualified success—some retailers’ systems work much better than others’—but the technology has evolved over a decade to the point that a shopper who pays attention knows where to use it and where to avoid it.

When self-checkout works as designed, there is little or no interaction between the customer and a store employee. To some that is an advantage, to others it is a drawback. When Springfield, Mass.-based Big Y Foods announced in September that it is removing all of its self-checkout lanes by the end of the year, the chain said the technology was not providing the level of service it wants its customers to experience. Albertsons LLC, which is the one not owned by Supervalu, cited similar concerns when it announced the same action two months earlier.

Some observers have asked whether this is the beginning of the end for self-checkout. That is probably the wrong question. What is more likely is that scanning as we know it—whether by cashier or by customer—will soon be on the way out. Not because it is bad, but because it is old. Today a large and growing segment of the population carries pocket-sized devices that are faster, more powerful and more versatile than the home computers of not too many years ago. A decade from now large, immobile checkout stations may seem, at best, quaint.

Whatever technology replaces them, no matter how much it costs, it will only be a capital investment, not a differentiator. All of your competitors will have it too. The most important element of the grocery business will continue to be the customer. As always, the retailers who keep that top of mind will have the best chance of success.

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