Mercator Blog

Mobile Self-Checkout Speeds Shopping
Date: June 22, 2017
Raymond Pucci
Associate Director, Research Services
Getting customers in the door and out as quickly as possible is a common objective of merchants that sell food, household supplies, and everyday consumer products. For retail stores that operate on narrow margins, the name of the game is volume and fast turnover if they hope to wring out some profit. Brick-and-mortar stores also realize that simpler and faster checkout usually means less staffing and lower labor and overhead, costs that are an increasingly larger portion of their operating expenses. The new normal is that in-store retailers have to do more with less while still accommodating the needs of their customers.

For decades technology has provided the means to increase store throughput and staff productivity, especially at the checkout counter, an area that often slows the shopping process. Computer terminals replaced mechanical cash registers, which eliminated the cash box. Bar code scanning did away with manually keying in product prices. Point-of-sale (POS) terminals for accepting plastic payment cards reduced cash sales and the need to make change with a quick swipe of a credit card. Finally, contactless payments replaced reaching for a credit or debit card and enabled shoppers to pay with contactless digital wallet card via Android Pay, Apple Pay, or Samsung Pay.

Sometimes entirely new checkout methods are discovered that deliver significant gains, as witnessed with the drive-thru window, which is now a necessary feature for the stores of burger and coffee chains. Quick Service Restaurant News reports that 60–70% of the sales of national fast food chains in the United States come from the drive-thru window. In the last few years, the mobile order and pay method has rapidly been adopted by consumers in a hurry. Starbucks reports that in 2016, mobile order and pay represented 10% of transactions at peak times at its stores overall and 20% share of transactions at several hundred of the stores. Current trending data in the United States from other fast food categories finds similar popularity of mobile order and pay as an alternative payment method that reduces the time customers spend waiting for an order.

What do these changes that speed up the checkout process tell us about U.S. shoppers? The answer is simple: People don’t like standing in line. Most people are fitting work duties and family activities into a seemingly shrinking amount of time. They want to get in and get out quickly when picking up coffee and snacks or shopping for groceries. But sometimes the checkout advancements do not reduce long lines enough. Even the drive-thru lane may have a line. Meanwhile, mobile order and pay is creating its own queue of customers at Starbucks causing minor gridlock.

So what else can merchants do to improve the checkout process and respond to their customers’ busy schedules? Easy. Eliminate the checkout altogether and create the newest shopping time-saver—mobile self-checkout. The Mercator Advisory Group research report,  Evolving Retail Concepts and Venues with Mobile Self-Checkout, takes a look at the pioneers in this early movement and where it appears to be heading in the next few years.