How to Streamline Checkout in the Food Retail Sector - Research Paper Example

Business Report An Evaluation of New Technology Trends to streamline Checkout in the Food Retail Sector Executive Summary This research paper has been created with the aim of presenting a comprehensive research on the adoption of technology trends in streamlining the checkout processes at retail food sectors. In this regard, supermarkets have been kept as a sole target for research and analysis. The statistics used for this paper have been extracted from NCR including references from IBM to support the idea of adopting self-checkout systems at retail markets. The world leading supermarkets have been given as examples, which describe best how the technology is pursuing to do wonders for the business. The paper begins with an introduction of technological trends adopted by various renowned supermarket brands. Self-service checkouts have been selected as the centre of discussion. Next, a number of influences of self-service checkouts on labor need and customer satisfaction gives an insight of the importance of this system. In addition, a mixed difference opinion by several customers relating to the usage of self-service system has been given. The research paper concludes with presenting a few implications that retail businesses can imply to enhance their operations and build the customer loyalty that represents the success of their business. These systems are not adopted by businesses to reduce the costs but to enhance their customer relationships by providing easy shopping experience. Introduction To be waiting in the checkout line is one frustrating fact of shopping; however, people are now adopting offline shopping with the induction of self-service checkouts, which allow them to evaluate their products and scan for billing. Technology has played a vital role in enhancing purchase and sales. The process has been improved further with regard to fulfilling purchase orders before time and making quicker sales in fewer periods. The food retail market is also benefiting with this technology to make the service easier for its customers who avoid spending time on long checkout queues. According to a survey conducted by Supermarket News reports, food retail sector has adopted latest technology to enhance its customer preferences by a greater margin than any other industry in this world. Consumers believe that this industry most implements technology for better customer experiences and introduces new ways and techniques to enhance their services quickly. The largest supermarkets of USA such as Wal-mart and Target have been working extensively to improve the customer experience of their supermarkets and they have successfully introduced technology as a part of their establishment to this day. Wal-mart is one renowned retail brand that adopted self-service checkouts for their stores. Customers begin to deal with the checkout process more efficiently by doing the job themselves. The response on this adoption of technology was positive and many customers were relieved of wasting time at long checkouts. According to NCR, Kmart introduced self-service checkouts with the installation of about five thousand systems at its thirteen hundred stores in year 2011. These systems managed to make sales for Kmart up to 22 percent per year, which achieved a close target for their sales (Bird, 2012, pg. 1-3). Supermarket Guru Phil Lempert proposes that supermarkets must cater to their consumer’s preferences since grocery shopping is not what they like to do the most. Particularly, 53% of consumers have been reported to avoid grocery shopping while 14% dislike grocery shopping due to the processes at retails. Knowing the preferences of customers is the key to introduce technology that can help bolster the retail systems. Trends that need to be adopted by retails must focus on this perspective and bring innovations to improve the way customer shops. A customer needs to have full information of what he is going to buy therefore trends must be adopted in briefing the product purchase details in such a way that it eases the long going process and manage to attract more customers at the retail store (Bird, 2012, pg. 1-3). Many supermarket retailers have adopted systems to optimize the system applications at their stores to enhance the customer dealings. Not only have these systems placed their concerns in customer satisfaction but also the reduced overhead expenses that encounter the most in their processes. Kroger being the first one to adopt automated tunnel scanning technology known as Advantage Checkout used this system to improve checkout process. It allows 98% of the items to be scanned and later reveals the unscanned objects at the end of the checkout tunnel. This brings ease in locating items not scanned for payments and reduces the cost on part of the retailers by accelerating the scanning process. Discussion As discussed above, the technological progression has enabled retail businesses to improve, bring innovation to their customer experiences, and gather a large number of customers to enjoy the shopping experience without agitation. Retail businesses are continuing to adopt self-checkout systems and by the end of 2016, the number of self-check outs will reach to 325,000 worldwide. Retail Businesses adopting Self-service Checkouts The retail outlets are not facing problems with labor turnover. They need to keep in focus the changing trends of technology and the customer preferences. The aim is to provide the easy customer solutions and to build the name. Adopting self-checkouts is growing widely in the supermarket industry due to not only cutting the labor costs but also putting it as a key selling factor in their profile. The customer demand is also a major factor, which influences the supermarket chains to adopt this system since they need ease of operations and quicker payments without wasting time on the extended checkout counters. IBM is working on to develop creative self-checkout systems for this purpose, which will not only provide easy scanning and payment solution for customers but also invite them into more personalized systems of their own. According to IBM Analysts, “consumers are embracing self-service technology more than ever before. In fact, they are coming to expect it from airport kiosks and pay-at-the-pump gas stations to self-checkout lanes do-it-yourself transactions” (Finne & Sivonen, 2009, pg.45-56). Need of Labors with Self-service Checkouts Self-checkouts systems do not require replacing of the employees on a whole. When large supermarkets adopted the systems, customer needed guidance with its usage and so the role of employees highlighted greatly in guiding and counseling the customers with its usage. The systems are not entirely autonomous and an attendant need to be present at all times to monitor the customer’s activities for errors. Often bug problems can agitate a customer and confuse with the procedures therefore supervisors need to be there for assistance. In this current era where employee market is suffering a tightened condition of supply, retail markets are focused on hiring few yet trained employees who can work as supervisors for these self-checkouts. Self-checkouts are installed in order to enhance the productivity of the supermarkets therefore the labor cost is not cut down with its introduction, as labor will be shifted to other areas of work if self-checkouts do not need to be supervised (Plunkett, 1997, pg. 102). Customer Satisfaction Customers welcome the increase in speed, ease, and convenience of self-checkouts. Customer demand is to get the job done as quickly as possible since no customer enjoys grocery shopping for long hours. The most complained issue related with supermarkets is the long waits in line. Self-checkouts have influenced the greater customer satisfaction by allowing the ease of self-scanning and payment options for their customers. However, multiple checkout lanes are always present and working quickly; however, they still do not achieve the speed and success of the self-services with self-checkouts. Customers find themselves slowing down when they have to interact with the staff or employees with the purchase payments and hence they find it quicker and easier to complete their shopping process through self-checkout systems. The system gives them the sense of self-sufficiency and empowerment to control their shopping experiences and build their own environment. Surveys have shown that retail businesses using self-checkouts have reduced queues by forty percent. Home Depot claims to have reduced the length of their lines by a third and length of time spent in line by the same percentage (Krafft & Mantrala, 2007, pg. 98-105). Negative Feedback of Customers Though self-checkouts serve as easy solutions for customers, many of the users prefer to use the old checkout counters for scanning and pricing. This implies confusion with the idea if they really want self-checkouts or not. Many customers give feedback by stating that they do not like the technology mainly because they find it difficult to operate with the computer systems. A significant figure of people despite being literate with computer skills avoid using self-checkouts at public complaining to find the system difficult to operate (Kandampully, 2012, pg. 67-72). Conclusion The technologies adopted by retail businesses have improved their workings however, certain implications propose that the system needs to be made more effective in its process. Customers are affected psychologically with the usage of self-checkouts. Many customers would give up on its usage simply stating the need of liking to interact with people, which they cannot with the self-checkouts. If supermarkets induce strategies of customer involvement with the staff during the process by letting operators at the counter propose assistance, this problem can be dealt with easily. This also gives the customer a feeling of being taken care of as special customer to the business. Self-checkouts have reduced thefts to a greater extension with having no human assistance at the counters the cash reserves are kept safe. The integrated theft prevention technology of these systems is efficient however, supervision of staff is necessary so that the customer at any level does not exploit the system (Kandampully, 2012, pg. 65). With the increased adaptation to technological systems, many supermarkets have become computerized in all their dealings, therefore, qualified technicians and operators need to be appointed to enhance the performance of these systems for greater customer satisfaction. Self-checkout cannot operate itself and they need human assistance to avoid technical problems that can be a major factor in pushing away customers and making them switch to stores possessing cash counter systems. Within a few years, this technology will take over new advancements of personalized techniques to cater the needs of individual customer. IBM has verified this idea of advancement in producing software that will help to achieve remarkable innovations in the world of self-services. References Bird, J. 2012. Streamlining Checkouts. Retrieved July 24, 2012: http://www.ft.com/home/asia Finne, S., & Sivonen, H. 2009. The Retail Value Chain. London; Philadelphia : Kogan Page. Kandampully, J. 2012. Service Management. New York: Springer Science+Business Media, LLC. Krafft, M., & Mantrala, M. K. 2007. Retailing in the 21st Century. Berlin: Springer Berlin. Plunkett, J. W. 1997. Plunkett's Retail Industry. Houston, Texas: Plunkett Research, Ltd. Read More