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Does Self-Service Technology Offset Labor Issues For Independents?

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Does Self-Service Technology Offset Labor Issues For Independents?

 

“Implementing self-checkout has been unbelievable for us. It is easy to use, expedites the lines and the screens are user-friendly. There is a huge difference between our stores with and without self-checkout… and the customers love it!”

– Joe Catalano, Store Manager, Dash’s Market

 

What problem is DUMAC trying to solve for the grocery industry?

Unemployment remains high, but businesses are struggling to hire employees and even receive any applications. Labor issues continue to adversely impact almost every industry across America. As the country reopens and the economy evolves quickly, people stepping back into the workforce are lagging significantly.

The complex labor shortage issue has multi-layered, inter-related causes, from the additional unemployment compensation to child/family care to continued concerns over the vaccine and COVID exposure. Even with the discontinuation of the enhanced unemployment benefits – one of the most evident factors – we may not see the workforce rush back to the employment levels needed.

As multi-layered as the causes, the effects are just as varied and complex: from not having any applicants to now having to compete for resumes by offering higher wages, sign-on bonuses and other costly perks unforeseen and not budgeted for by retailers. Candidates still see the occupations in grocery as “risky” and “low-wage” – even after the long-overdue recognition as essential workers during the pandemic.

Crucial hot topics for retailers will continue, including labor management, better predictive scheduling, minimum wage increases, overtime, paid leave and pay equity.

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Is there a growing demand for self-service technology?

Retailers must look at physical and technology enhancements for their stores as they continue to ensure a convenient and differentiated shopping experience for customers. In a recent Store of the Future Report, 89 percent of respondents said it was important for stores to implement technology to make checkout easier and faster. Friction caused in the aisles and, more importantly, at the checkout, continue to be the top complaints of shoppers.

 

How does self-service technology and self-checkout increase the customer experience and sales?

Determining how to offset the labor shortage and everyday labor management is crucial to a grocer’s bottom line. Maintaining customer service expectations and loyalty is critical to running a profitable business and for growth.

The pandemic inherently thrust traditional in-store customers to adopt technology and new ways of shopping to meet their needs safely and securely. Post-pandemic research shows that even the most steadfast traditional shoppers will continue to use a blend of in-store and digital online grocery shopping and ordering.

Using self-service, mobile and contactless technologies have become a competitive advantage in a post-pandemic retail environment. Creating Customer Experience (CX) – meeting your shoppers where they are – is a necessity.

According to a recent study, for every 15 percent increase in self-service customer satisfaction, overall customer satisfaction increases by approximately 7.5 percent and, in turn, sales per square foot by 2 percent.

 

Customers may see self-checkout negatively, as removing customer service. Is your solution meant to replace employees?

Absolutely not! Using self-checkout as a solution is augmenting a store’s labor; not only during the current labor shortage but also when a store experiences a no-show or an employee calling in sick.

Self-checkout provides both the retailer and customers with an efficient, effective option for checkout. It helps to manage long lines in peak hours and meet customers’ needs with smaller basket sizes. What shoppers want is to get in and get out fast – and an efficient experience. If retailers can provide this, shoppers will select that store over the competition – including online purchases.

The self-checkout attendant’s position becomes a customer service role. A grocer should look to their best service-oriented employees and as upward movement into the attendant’s position.

Once viewed as a negative aspect of deploying self-checkout, optimizing labor is now another critical factor in favor of self-checkout. Employees can be cross-trained and reallocated to other areas of the store where needed or to assist shoppers further. The grocers we have worked with have noticed customers are much happier to have self-checkout for those quick trips; their employees are focused on improving the customer experience – both have created positive customer comments and fiercely loyal customers!

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Self-checkout is an investment for independent grocers. What is the expected ROI?

Yes – self-checkout IS an investment and the return is dependent on several factors. DUMAC works with our customers to ensure the investment makes sense and, just as important – when.

To assist grocers with the decision, we have developed a self-checkout ROI calculator that factors store size, average number of customers, average order or basket size, and several other considerations. We always want to be sure the investment is a solution for the store.

 

Another area of concern for grocers is theft at the self-checkout. How can theft be counteracted at a self-checkout station? 

Advancements in artificial intelligence (AI) have improved the overall shopper experience while helping retailers manage operations.

Self-checkout AI technology is used to prevent expensive items from being rung up as lower-priced items. For example, if a shopper attempted to ring an item (like a steak or wine) as a less expensive product (for example, produce), the AI would alert the attendant, and the disputed transaction would not be allowed to proceed.

Similarly, the self-checkout AI technology provides produce management that can identify the item by shape and color, eliminating the need for the shopper to search through a long list of produce items to make their selection!

 

Many independent grocery stores are smaller, with only a few checkout lanes. Is it even possible to install self-checkout in these smaller stores?

When considering self-checkout technology, store size should be taken into consideration – but not deter the investment. Suitable placement within a front-end footprint based on customer flow and maximizing square footage is more important.

A typical ratio for a retailer to consider is a one to two ratio; for example, with the replacement of one traditional cashier lane removed, two self-checkouts can be implemented. The ROI calculator and a floor plan system is part of the initial self-service technology consultation that helps determine the business case for store operational efficiencies.

Does Self-Service Technology Offset Labor Issues For Independents?

What makes your company uniquely different from others in the industry, especially when it comes to self-checkout?

Seventy-three percent of customers said waiting in the checkout line is their least favorite aspect of their shopping experience and 87 percent of shoppers prefer to shop in stores with robust self-checkout options.

Self-service technologies have become a critical operating factor and are more critical than ever for independent grocers to remain competitive. These factors directly impact the bottom-line, balancing labor management with operating efficiencies while creating an enhanced customer experience that shoppers now demand.

Several barriers to deploying self-service technology still exist, including self-checkout replaces employees, reduces customer service and cannot be deployed in smaller stores.

Deploying self-checkout to offset labor-management issues – especially now during the current shortage – has been proven. It also shifts staff opportunities to focus on performing more value-added tasks including the ability to provide extra attention to customer needs further enhancing the in-store customer service experience.

A retailer’s considerations for implementing self-service technology are unique, and it becomes critical they have a trusted technology partner to work with. DUMAC works with customers to deliver the best self-checkout solution based on store size, volume and technology through ROI calculations and data-driven facts.

DUMAC, a third-generation family-owned company, has been helping independent retailers since 1952. The company’s founder, William McCarthy, started as an NCR field technician and then opened DUMAC as a cash register sales and service business – the original point of sale equipment for the retail industry. The evolution of the POS technology remains the heart and backbone of our customer’s businesses.

The most important tenet of our corporate vision, mission and values has always been and remains our customers – they are our partners, and DUMAC’s team members work diligently to support the growth of their business.

Independent grocers and convenience stores are the heart of our local communities. Each store’s size, technology needs and budget are vastly different. Implementing the right-sized technology plan for each store ensures success now and into the future. DUMAC’s professional services team partners with our customers to help simplify store technology solutions, upgrades or changes, and investments based on the store’s requirements, technology budget and timeline while considering customers’ expectations.

Read about DUMAC‘s expert, Howard McCarthy, president and CEO, here.

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