Using Data To Increase Checkout Conversions — In-Store

It’s not just about Amazon Go.

You’d be forgiven for thinking we’re headed toward the cashier-less model across retail, toward handheld devices and smartphones that let consumers scan and go, where even the self-checkout lanes are an anachronism.

It’s a broad brush with which to paint a complete retail makeover. However, it turns out that the optimal checkout experience is very much a consideration that varies from retailer to retailer.

In an interview with Karen Webster, Diebold Nixdorf Director Self-Service, Americas, Retail Division, Solution Sales Carl von Sydow said there is increasing appetite to streamline the point of sale experience.

“Retail, grocery retail and all the other verticals are going through big changes now in the checkout process,” he said, and a range of self-service solutions are coming to market, expanding checkout options for the end consumer.

However, as von Sydow noted, a significant number of stores and retailers are still working with traditional retail models, and even when examining options to embrace technology to speed transactions, are not seeking to reinvent, well, everything.

These retailers, he explained, would prefer to use the processes and technology already on hand to improve the shopping experience — and that means leveraging the value that lies within the data.

Finding the right mix of technology, layout and Key Performance Indicators (KPIs) on the shelves boils down to looking at the per store data on hand, said von Sydow, right down to the transactional level.

“One store location can be very different from another one,” he told Webster. “The customer demography is different from one side of the town to the other.”

Transaction data can help firms like Diebold Nixdorf analyze the customer journey — and improve the store without spending a significant amount of money at the outset.

Through the store-level and consumer-level data, he said, information that can be extracted — and which proves valuable — can include the average basket size, the different payment options that are preferred by consumers and even how many transactions occur with age-restricted items.

In this way, the retailer can judiciously move beyond the confines of the traditional “basket to bag” self-checkout that has been a retailing staple for the past 15 years.

Breaking down some trends, he remarked that for smaller basket transactions, self-service has proven attractive as a checkout option. However, he said, increasingly, consumers with larger amounts of items to buy have been gravitating toward that option — with sometimes less than optimal results as individuals are slowed down by cumbersome processes.

Picture, then, the impatient line that masses behind the consumer with 50 items piling up on the self-checkout counter, scanned one by one. Literal shopping cart abandonment begins to take place.

“So our idea,” said von Sydow, “is to look at the transaction data, analyze the different groups of customers that are in that particular store and then identify what different self-service solutions or options retailers add to this checkout area to meet the different customers’ preferences.”

Against this backdrop, the customer with the smaller basket may want to check out quickly, paying with a card. “They don’t want to wait behind someone paying with cash,” he said, “and you should have a mix of different self-service solutions to meet that demand.”

It’s no longer the case that the same cash/card/coupons checkout lanes will fit the needs of all retailers or their customer bases, he said. To put it bluntly: averages don’t cut it.

As a result, retailers may opt to narrow the payment options of specific lanes, effectively directing traffic.

To restrict a self-checkout lane to card-only payments may seem like a bold option, said von Sydow, and some retailers are afraid to go that route, but the internal data may reveal an opportunity to keep consumers happy.

Innovation in the Offering

To meet this demand, he said, some retailers are mixing different checkout solutions in the same store, moving beyond the traditional basket-to-bag models. He spotlighted the examples where giants like Kroger and Walmart are incorporating those “normal” lanes with other types of checkout options — such as personal “self-scanning” devices.

“We have retailers adding smaller kiosks like fast lanes without cash. Some of the more aggressive retailers are mixing different self-checkout or self-service solutions within the same store. Moreover, it’s happening more often,” he said.

Catering to customers’ preferences also will boost conversion rates, said von Sydow. Pointing to Diebold Nixdorf’s own experience, he said that in one project, implementing self-checkout through a “fast lane” option at a retailer, initial estimates were for a 30 percent adoption rate. After just a couple of weeks the adoption rate was 37 percent, he said, and a couple of months after deployment that rate is 44 percent.  At the same time, conversion rates are up, but basket sizes are down.

Ordinarily, retailers would view shrinking basket sizes with alarm, he said — but in this case, the incidence of consumers with smaller basket sizes increased dramatically because of the faster and more efficient throughput across the checkout experience.

Loyalty

Though the customer journey is effectively over at the point of checkout, von Sydow maintained that there still are opportunities for retailers to cement loyalty at this very last part of interaction with the consumer. (As Webster noted, to take part in the Amazon Go retail experience, one must be an Amazon Prime member.)

The traditional basket-to-bag sales checkout is that the model has built-in security, he said. There are weighing scales, a bagging area and other mechanisms to track purchases and make sure they are accounted and paid for.

“However, it makes the whole checkout experience a little bit annoying especially if you have these unintentional blocks,” said von Sydow. “Items don’t always fit … and so the throughput is definitely affected by that.”

He told Webster that if retailers opt out of at least some of those security features, there are ways to identify customers and verify transactions — including through loyalty programs. That’s especially true with fast lane checkout, where loyalty reward offers can be extended on the spot.

Looking ahead, “I think we will see a big increase in self-service solutions in retail, not only in grocery but in DIY stores, convenience stores and pharmacies because it is a very convenient and fast way to go through the checkout area,” he said.

“Consumers expect self-service nowadays,” he said, adding that “there is ‘no one size fits all’ in self-service anymore.”