Featured H-E-B, Walmart, Kroger keep testing self-checkout technology

Published on November 25th, 2022 📆 | 3888 Views ⚑

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H-E-B, Walmart, Kroger keep testing self-checkout technology


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On the way in, they grab a handheld scanner and shopping bags and scan a QR code on their cart or basket. Then, while shopping, they scan items as they’re picked out and bagged.

When finished, they head to the “Fast Scan” checkout area, scan another code and put their cart or basket on a scale. If the weight is consistent with the items scanned, they pay at a register and leave.

The scan-as-you-go checkout system is part of a limited pilot program, H-E-B said. If it proves effective and accepted by customers, it could add to the technology-enabled options consumers have to make their shopping trips more efficient.

“At H-E-B, we
continue to evaluate
and
utilize innovative technologies
in all parts of our business,” a spokesperson said.

The San Antonio-based grocer is not the only one deploying technology to streamline shopping. Besides H-E-B, a flurry of others — Walmart, Kroger, Albertsons, ShopRite, Amazon, Costco and Hy-Vee, to name a few — are experimenting with self-checkout systems.

But it’s about more than customer convenience. Retailers are looking for ways to reduce labor costs and increase razor-thin margins.

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“This is 100 percent at its core a labor-elimination tool,” said Steve Rowen, an Austin-based managing partner at Retail Systems Research.

At the same time, offering speedier options for busy shoppers in a rush and eager to skip long checkout lines can increase a retailer’s competitiveness.

“If I’m a time-starved mom or dad and I am doing my weekly shopping, to be able to get in and get out as quickly as possible, to make that experience more streamlined, is something certainly as a consumer I would seek out,” said Rob Weisberg, senior vice president of incentives and loyalty at Inmar Intelligence, a retail analytics company in Winston-Salem, N.C.

Cracking the code

Many retailers have replaced at least some cashier-staffed checkout lanes with stations where customers scan and bag their own items then follow on-screen prompts to pay. In recent years, many have created mobile apps to handle both scanning and paying.

Walmart
and Kroger have tested stores that employ self-checkout exclusively. In 2020, Kroger began rolling out Everseen’s artificial intelligence at its stores to reduce customer mistakes at self-checkout stations.

Kroger is also trying belted self-checkout, where items scanned by customers move down a conveyor belt to a bagging area. In 2013, H-E-B tested a 360-degree scanner that automatically registered the bar code on each item as it moved down a belt.

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Amazon’s Just Walk Out system tracks which items shoppers pick up and charges them when they exit. The company also offers smart carts that enable customers to check out without waiting in line.

But few such changes have been rolled out at every store in any chain.

“Nobody has cracked the code yet,” Weisberg said. “The highway is littered with failed attempts to do this successfully.”

Multiple concerns and challenges — including theft, system glitches and the hefty costs of implenting new technology — have kept retailers from expanding various options to more stores. East Coast supermarket chain Wegmans shut down its self-checkout app this past fall, citing losses.

And when technology doesn’t perform as advertised — such as handheld devices that scan improperly — or is too complex, consumer frustration can threaten brand loyalty.

‘Polarizing topic’

“Automation is a polarizing topic with consumers,” said Carol Spieckerman, president of retail advisory firm Spieckerman Retail, based in Bentonville, Ark. “Some love the convenience factor and seek out self-check options wherever possible. Others have concerns about automation replacing workers or grumble about lack of service.”

Neil Saunders, managing director for retail at London-based data analytics and consultant GlobalData, said shoppers usually don’t want to unload, scan and bag their own items.

“This is time-consuming, can be glitchy — which necessitates staff intervention — and is difficult for grocery, where lots of items are purchased,” he said.

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Rowen moved to Austin from the Boston area and recalled a system with handheld scanning devices that Northeastern grocery chain Stop & Shop tested at its stores. It didn’t seem popular, he said.

“People are in a hurry and they want to get in and get out, but only if the technology makes it easier,” Rowen said. “It has to be easier to use than it is to ignore.”

For many grocers, he said, the cost of scanners, cameras, sensors and other technological components is cost-prohibitive.

Despite its challenges, it appears likely that self-checkout will remain a staple for many grocers. The share of transactions via self-checkout lanes at grocery stores rose to 30 percent in 2021, nearly double what it was in 2008, according to a report from the
Food Industry Association.

Retailers rushed to add scan-and-go technology during the first year of the COVID-19 pandemic, but that “has since leveled off,” the association said.

More than 20 percent use mobile checkout systems, and over a third are planning to do so. Those options are supported by credit or debit cards, which is expensive for retailers because of high interchange fees, the report said.

Some sectors have made self-service stations more appealing than engaging with employees, Weisberg said. For example, many people would rather use an app or ATM to deposit a check and an airport kiosk for flight information than to wait in line to talk to a teller or agent.

Despite the difficulties for retailers, “it’s clear that the industry as a whole is moving in this direction,” Weisberg said.

H-E-B’s plans

It’s unclear how long H-E-B’s pilot program in Schertz will last and whether it will be expanded to more of the chain’s stores. The company declined an interview.

“H-E-B is wisely taking a test-and-learn approach to integrating automated solutions,” said Spieckerman, the retail consultant. “Although it’s much easier for retailers to settle on one solution and move on, retail is all about choice these days. Shoppers want to have options, and H-E-B is clearly trying to build them.”

The company, which has more than 420 stores in Texas and Mexico, has invested and tweaked its technology over the years.

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H-E-B launched
curbside pickup
in 2015 and has since added the service to many of its stores. It’s worked with Swisslog Logistics to set up
automated micro-fulfillment centers at its facilities
and devoted more square footage at its stores to preparing and storing curbside orders. It bought Austin-based Favor Delivery in 2018 and has expanded that option too.

The company has been
piloting H-E-B Go, a self-checkout mobile app at several stores. It can be used at more than a dozen H-E-B stores in the San Antonio, Austin and College Station areas, a map in the app indicates.

In 2019, the company announced it was teaming with Udelv, an autonomous delivery startup, to test self-driving vans on streets around its Olmos Park store. It hasn’t shared information on the status of that experiment.

Among its payment trials, H-E-B nixed a
Mobile Wallet pilot
in 2017 that enabled customers to enter debit or credit card information into the company’s app and pay by scanning a bar code using their phone at checkout.

And to some customers’ frustration, they can’t use Apple Pay at H-E-B. A
recent TikTok video
of a woman in an H-E-B uniform dancing and holding stacks of coupons below the words “if we had a dollar every time someone asks why we don’t have apple pay” racked up hundreds of thousands of views and comments from frustrated customers.

Retail analysts describe H-E-B as a innovative company that experiments and carefully chooses which technology to spend its money on. In a competitive industry, it must stay on its toes.

“H-E-B is keeping pace on the tech front but will need to stay on its game, particularly as Texas continues to serve as a testing ground for competitors, Amazon among them,” Spieckerman said. “It makes sense for H-E-B to be hypervigilant initially when testing various technologies, particularly those that are customer-facing. Once the bugs are worked out, H-E-B can continue to build its convenience arsenal.”

madison.iszler@express-news.net

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