Retail

Mobile Self-Checkout Success Depends On Bridging The Loss Prevention Gap

Brendan Miller
Principal Analyst
August 4, 2017

Mobile self-checkout technology promises to not only streamline the physical checkout experience, but more importantly, to bring an augmented digital shopping experience to the physical store. When mobile self-checkout shoppers scan items to put in their physical baskets, digital business leaders will have real-time digital basket data to drive more relevant up-sell, cross-sell, and contextual offers.

Consumer demands and expectations are ushering in a new alternative to queuing at many retailers. Starbucks’ Mobile Order and Pay program now accounts for 20% of peak transactions at top stores. Sam’s Club “Scan and Go” app enables consumers to bypass the checkout line and has a near 5-star rating on the App Store. Zebra Technologies found in a 2017 study that a quarter of UK shops are planning to do away with queuing within four years in some fashion.

So, what’s holding many retailers back from implementing mobile self-checkout?

Two-words: Loss prevention (LP). The thought of customers scanning one item but dropping another into their baskets (or adding a few extra items without scanning) and walking out the door is enough to give any Head of LP heart palpitations. Most department, convenience and grocery stores don’t have the operational systems and people in place to mind the new risk mobile self-checkout presents. Additionally, adding technology such as shelf-sensors to create an AmazonGo like experience in most cases is not cost feasible at this point in time (not to mention the technology isn’t fully battle tested).

Can retailers overcome the mobile self-checkout LP challenge without implementing millions of sensors?

Ultimately, digital business leaders must prove the CX and customer engagements benefits out-weigh the risks. A more engaging customer experience must be the goal while providing a more convenient checkout experience being the immediate benefit. Here are some interim steps many retailers can implement to begin to bridge the LP risk gap:

  • Have users check-in with the app as they walk into the store. BingoBox opened several staff-less convenience stores in Beijing and Shanghai. Although BingoBox uses shelf sensors, it also implemented several noteworthy technologies: first, customers must check-in with the app so BingoBox knows their identities and in-store locations; second, each store uses live video monitoring to keep an eye on inventory and customers. See the video here.
  • Random or algorithmic security checks. FutureProof, which builds mobile self-scanning technology for grocers, developed algorithms that flag high-risk items or in-store activity for staff to investigate. Ninety percent of the time users just checkout and leave, but in some cases based on activity in-store or items scanned customers get a bag check by staff. Mobile-scan customers should be made aware they may get bagged-checked.
  • Monitored, expedited lane for mobile self-checkout. Drive mobile-scan users to the self-checkout area to scan a barcode at a POS kiosk, which is overseen by the self-checkout lane clerk.

There is no fail-proof solution that will prevent all loss, but digital business pros can work with their LP counterparts and create deterrents to reduce risk. Put shelf sensors, product recognition, and RFID technology on your road-map, but get started on with mobile self-checkout to improve your customer’s shopping experience sooner than later.

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