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When Shopper Engagement is Done by Machine - AvNetwork.com

When Shopper Engagement is Done by Machine

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Two reports released recently from industry-leading organizations IHL Consulting Group and the Aberdeen Group suggest trends that could, on the surface, appear to be in some conflict.

The Aberdeen Group's report released recently called the selfcheckout experiment "an absolute failure," while citing "several operational and store navigation roadblocks such as a lack of a strong a strong customer interface" as reasons for this failure. The report by the Aberdeen group suggests that, in the end, it is a failure to improve the customer experience through improved convenience or by providing additional time savings on the part of the consumer that is the culprit in the case of the missing retailer benefits related to this technology.

Yet the advance word on the IHL Consulting Group's report suggests that it tells of greater-than-ever investments on the part of many major retail chains in self-checkout technologies, with grocers alone expected to spend $9.8 billion dollars on IT purchases this year with much of that investment going into self-checkout systems as well as infrastructure support and supplychain management technologies.

The question is: Can both sets of data be correct, or must they exist only in two parallel universes of commerce? The answers: Yes and no.

Even some of the qualitative data available on self-checkout systems suggests that, in many cases, consumers are not flocking to the available units in droves. Certainly, they are a long, long way from replacing cashiers. But one only has to look at the history of this technology to see its future. For example, let's take the humble ATM machine. ATM's were first introduced in the mid 1970s. These heavily promoted wonders promised 24/7 access on the part of bank customers with unheard of convenience and security. Yet for many, many years after their introduction, one only needed to look to the long lines still seen at teller windows to determine that ATM machines were not "the final solution" as it relates to the existence of the human bank teller.

According to the banking industry, although ATM machines are now a part of the everyday life of consumers, it took a decades-long mindset change on the part of many consumers to make the switch from human-only interaction with their favorite financial institution to conducting their banking with automated tellers. The reasons for the slow switch have been variously attributed to generational and cultural changes, to operational issues, and to concerns with security.

Nonetheless, while automated tellers have not replaced their human counterparts, there can be no doubt that the technology is here to stay, and today few can imagine a world where they didn't exist.

Can the same ever be true with self-checkout technologies introduced relatively recently at other retail channels? There is nothing in either report released recently to prove otherwise. The IHL report suggest that some of the operational issues experienced on the part of some retailers implementing this technology have been overcome. Wal-Mart, for example, removed some security functions from some of its self-checkout locations, which dramatically improved the consumers' experience of checkout time in those locations. Even the Aberdeen report suggests that the so called "contactless" credit card payment options, many using RFID technology, will improve checkout time for all customers whether through self-checkout or through the traditional employee-manned checkout line.

This improvement on checkout technology also has a parallel with the evolving services offered by bank ATM machines. In the beginning, making a deposit in a bank ATM required filling out a deposit slip or envelope that was in many ways as time consuming as making a deposit inside a bank. Today, bank customers have their checks scanned and read by optical scanners in many locations, which requires them to only approve the amount of the deposit, rather than filling out deposit slips.

If the past is truly a predictor of the future, it is evident that two things will change any real or perceived failures on the part of some retailers and allow them to successfully exploit the potential of selfcheckout technology. One is simply a change in consumer patterns that will come over time as the technology becomes more familiar. Self-checkout is still a very new addition to the customer experience on the part of many consumers, and changes in behavior simply won't come as immediately as some would like. The second change that will need to come to make this option more attractive to consumers is the extent to which there can be some very real and perceived benefits to going the self-checkout route. That may require changes in the way this technology is deployed in many cases, to improve the speed of the connection of the devices to their respective servers, and, as in the Wal-Mart example, reducing security requirements that actually speed the consumer through the check out process. However, additional technological advancements like the "contactless" credit cart payment process will also be the keys to the complete acceptance and utilization of self-checkout on the part of most consumers.

All that said, if automated tellers have not replaced those of the human variety, it is unlikely that selfcheckout will ever completely replace traditional checkout lines. Still, it is quite possible, if not likely, that as with ATM machines consumers will be wondering in a relatively few years what the world would be like without them.

Where the industry is mostly missing the boat regarding the selfcheckout systems is the opportunity to include more POS marketing and merchandising vehicles in the selfcheckout lanes. One only need to look as far as your nearest retailer offering self-checkout to notice the glaring difference between humanmanned and automated check out lanes (besides the absence of an actual human). The traditional checkout lane has always been a venue for offering POS promotions on the part of the retailer, manufacturers, and even credit card providers. The consumer is used to being offered friendly reminders of the latest on-sale items, as well as that last chance to pick up that much needed battery, disposable razor, or chewing gum. As they have been deployed in most retailers currently, automated checkout systems completely miss the marketing and merchandising boats both from the perspective of the manufacturers' and retailers' opportunity to make that last sale, but also from the perspective of the consumer who has become accustomed to an experience at checkout that includes these "last chance" opportunities to rethink their purchases.

The extent to which the glaring absence of these colorful marketing and merchandising displays is impacting the gravitation of consumers to the human-manned checkout lanes has not yet been fully explored. But generations of study on the behavior of American consumers, and human beings in general, suggests that ingrained behavioral patterns are stubbornly hard to change, and visual cues mean a great deal to every consumer even if their impact is only on the most intuitive of levels. Whether or not additional study proves the lack of merchandising at self-checkout systems to be one of the culprits of what some perceive as the slow adoption of this technology on the part of many consumers, there can be little doubt that a valuable opportunity to generate impulse sales is being largely missed with them.

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