foundations for grocery self-serve checkout

The trend towards a reduction of human interaction in commerce as a direct result of advances in

digital media technologies: a case study of the grocery retail

industry and self-serve checkout in Yakima, Washington.

Foundations for grocery self-serve

checkout

Gas Station:Self Serve & Pay at the Pump

Perceived Advantage (Customer Gratification):

SpeedSavings

Privacy

Banking:ATM (Automated Teller Machine)

Perceived Advantage (Customer Gratification):

Eliminate waiting in line24hrs access

Privacy

Travel:Ticket Kiosks

Perceived Advantage (Customer Gratification):

Eliminate waiting in lineConvenience

Privacy

Universal Product Code

UPC (Universal Product Code): A universally applied code consisting of a series of 12 vertical bars affixed to consumer products or inventory items. This code is consistently readable at a variety of angles via a code scanner. The code includes information on the product’s origin, content, and pricing. The first six digits refer to the company, and the following five digits refer to that company’s particular product. There is a final “check digit” to complete the twelve digit code.

Operational Definition

YakimaWashington

As of 2000 Yakima Wa State USA

Population 71,845 5,894,121 281,421,906

Median Age 35.3 35.3 35.3

HS Grad + 69.5% 86% 80.3%

Unemployed 7.2% 4.1% 3.7%

Media Household

Income$29,475 $45,776 $41,994

Population Demographic Comparison

GroceryRetail

Industry

Operational Definition

Grocery Industry: “This industry comprises establishments generally known as supermarkets and grocery stores primarily engaged in retailing a general line of food, such as canned and frozen foods; fresh fruits and vegetables; and fresh and prepared meats, fish, and poultry.” Adapted from U.S. Census Bureau, Current Business Reports, Series BR/02-A, Annual Benchmark Report

Grocery stores employ in excess of three million

employees(Budd and McCall , 2001).

“The consumer makes an average of 2.2 visits to the

supermarket weekly, including 1.7 visits to the ‘primary store’”

(Seth, 1999)

Grocery Retail Industry 2002 Annual Sales

$442,971,000,000second only to Auto sales in U.S.

retail economy (U.S. Census Bureau)

Self-serve Check-out: A grocery retail experience in which the customer collects, scans, bags, and pays for their own purchases independent from grocery retail employees.

Operational Definition

Groceries:Self-serve Checkout

Perceived Advantage (Customer Gratification):

Eliminate waiting in lineConvenience

Privacy

Four Self-serve checkout lanes cost $80,000 to install, require one store employee to oversee and pay for themselves in 12-

18 months

1 billion self-serve transactions at grocery and other retailers in 2002, double 2001

1967

1st

AT

M L

ond

on

1st

AT

M U

S N

ew Y

ork

1973

1973

UP

C a

dop

ted

1974

1st

Sca

nn

ed it

em

(wri

gley

’s g

um

)

1951

Exp

ress

Dai

ry s

elf-

serv

e,

Lon

don

1984

1st

self

-ser

ve

chec

kou

t (P

ubl

ix

Supe

rmar

ket,

Atl

anta

)

1993

Por

tab

le P

erso

nal

S

hop

per

(H

olla

nd

)

2002

29%

of

Gro

cery

re

tail

ers

offe

r se

lf

serv

e ch

eck

out

Benefit (gratification) for Retailer

This industry is an “intensely competitive, low margin, high-

volume industry.” (Keh, 1998).

“Nationwide a person has to spend $15 on a transaction ‘for the retailer to break even’ when

a cashier is involved … in California that break even is

closer to $25 per transaction.”

Lower wagesLower shrinkage

Increased inventory management

ProfitProfit

Profit

What would convince you to do the work others normally

would do and receive no pay or discount incentive?

The Future in Grocery Retailing

Adoption rate of self-serve checkout

% of grocery retailers with systems installed

Percent

Year

1984

20

30

40

50

60

70

80

90

100

1985

1990

1999

2002

2005

10

Projected

Current

Introduced

RfidRadio Frequency

Identification

Biometrics

“Scientists and engineers had accelerated research and

invention to an unbelievable pace, conjuring up machines capable of taking over more

and more human roles.”