I Have Seen the Future of Retail…

by Andrew McAfee on December 27, 2011

… and it looks like this:

This is the main checkout area at the Walgreens at the corner of North Avenue and Wells St. in Chicago. As you can see, it has no human cashiers at all; just a guy (in the striped sweater) roving and troubleshooting if customers have problems during the checkout process.

I’m in Chicago at my Mom’s place for Christmas, and over dinner last night we were talking about Race Against the Machine and the steady pace of automation (because what else do I talk about these days?). She and her husband Gene told me that the Walgreens in their neighborhood didn’t have any human cashiers any more.

I told them they must be mistaken. I’ve seen plenty of self-checkout stations, but they’ve always been accompanied by at least one human cashier to accommodate customers who for whatever reason — unfamiliarity, techno-fear, the desire to chat, whatever — don’t want to deal with a machine. I assumed the same would be true at this Walgreens. Mom and Gene were adamant that it was 100% self-checkout, so we got bundled up and walked over to get the straight dope.

They were right and I was wrong. There are six NCR self-checkout kiosks at the entrance / exit, and no cashiers at all there. There are human cashiers at the photo lab and the pharmacy and customers can take their purchases to these two locations if they want, but at the main checkout area you can’t get rung up by a person any more.

The NCR machines accept cash and credit / debit cards, and Mom and Gene told me that they work pretty well most of the time. A friendly and helpful Walgreens manager named Tony, who came over when he saw me taking pictures, agreed. He said that his store had been cashier-free for a couple years, and was one of only three in the country to have taken the leap to 100% self-checkout. The machines were easy enough to use and pretty reliable, he said, and didn’t change the amount of shoplifting one way or the other because “if people are going to steal, they’re going to steal.”

The store is in Chicago’s Old Town neighborhood, which is a diverse place. It’s gentrifying quickly now, but was home to the infamous Cabrini-Green project. So the Walgreens at North and Wells gets customers of every age and every level of education and affluence. And self-checkout can evidently handle all of them.

A March 2011 article in the Los Angeles Times by Alena Semuels highlighted that the retail industry has been automating rapidly.

In an industry that employs nearly 1 in 10 Americans and has long been a reliable job generator, companies increasingly are looking to peddle more products with fewer employees. … Virtual assistants are taking the place of customer service representatives. Kiosks and self-service machines are reducing the need for checkout clerks.

Last night I saw first-hand evidence of how advanced this trend is. As we become more comfortable interacting with technology, as credit and debit cards proliferate, as inventory management systems improve, and as everything gets a bar code, how long will it be until a human cashier is a curiosity?

I say less than a decade. Do you agree?

  • http://twitter.com/dirkriehle Dirk Riehle

    SAP, jointly with Migros, demoed such a checkout system quite a while back. I think they still have the show room available for interested parties. Ultimately, I’m assuming that you’ll just push your cart through some big scanner and the RFID chips will do the rest. You just swipe your card.

  • http://twitter.com/boysenandrew Andrew Boysen

    I don’t know if it will be a “curiosity” in a decade, but they way they will will be completely different. Some stores (Stop and Shop) have customers carry around a price gun, so the checking out is done throughout the store anyway. I can imagine the service looking completely different though – maybe personal shoppers walking around with customers in high-end stores. PS – I tweaked your photo to make it look less grim, and tried to send it to you, but it’s not showing up as sent – sorry if you got it twice. If you didn’t get it, and you actually want it, the link is here: http://bit.ly/u1Aii5

  • http://rickladd.com Rick Ladd

    Our local Albertsons grocery has had four stations for some time now. Frankly, I’ve resisted using them when I have a full basket, for at least two reasons: I like interacting with an actual human being; I prefer someone else hefting and packaging my purchases. However, when I have fewer items – especially if it’s crowded – I am far more likely to use the kiosks.

    Now, given that I’m nearly 65 and can still remember when cashiers pushed mechanical buttons to “ring up” each item one purchased, I’m surely no longer indicative of the general populace. However, being a bit of a geek as well, I’m intrigued by the use of technology to make the process of paying and leaving simple, convenient, and fast. I doubt I would have a major problem should human cashiers disappear entirely.

    All to say, Andy, I agree with you. I think Dirk may be correct as well. If I could merely push my cart through an area that would accurately scan my purchases, obviating the need for me to pick them up and place them inside plastic bags (which I find somewhat inconvenient), all the better. In fact, I imagine that scenario would include a method whereby purchases were either boxed or bagged prior to checkout, since there would be no need to either touch or “see” the merchandise.

  • http://twitter.com/sayanghosh sayanghosh

    Interestingly enough, in another Chicago retail major, when you check-in to the store using foursquare, you see the comment – “No one knows how to use the self check-out kiosk”. There is interest among people to try it out – but that the store hasn’t put a lot of effort to educate customers.  That is the problem this Walgreens store seems to have solved. Less than a decade sounds very likely, perhaps even less. But it still not be unmanned stores in this timeframe. (I am not quite sure I ever wish for unmanned stores, but…)

  • Frank

    About 20 years ago I came across a gas station in rural Virginia that had no attendant – just a machine to pay with credit/debit or machines that took cash and gave change.   I thought I had seen the future of  gas stations.  The future never came.  I don’t know whether it was social resistance or safety regulations that prevented it from taking off.  

  • Rich Petersen

    Here in the San Francisco bay area one grocery chain (Lucky) has aggressively adopted self-checkout. Last month they disclosed that someone had tampered with the POS card readers at 23 stores, and stolen ATM card information from customers. Hundreds of people had money stolen from their bank accounts, and thousands more had their ATM cards suddenly deactivated by their banks in an attempt to curtail the fraudulent withdrawals. More info: http://www.mercurynews.com/business/ci_19491443

  • Gil Press

    The first supermarket barcode scanner was installed in 1974 so 2020 is not a wild guess for when we will see a backlash from some retail establishments differentiating themselves with human cashiers. 

  • Chris Lahey

    You don’t think your card will be rfid too?

  • http://keithprivette.com @keithprivette

    Come on don’t fool yourself into thinking this is some future thing to be more customercentric….Cost cutting, employ less people, and more money going to the top to make the contract terms of executives.  All of retail is based on a volume business. To have a volume business you need many many many many folks buying things in your stores.  Well with this number depleting daily (shrinking middle class) senior executive know what they need to do to the keep margins the same, employ less people.  

    Do I like the self checkout option, YES! Do I know what happens with this like, YES. Cannot remember but their was company about 6months ago getting rid of their self checkouts to get back to having a real connection with their customers.

    Solution to problem….don’t have one. Just want people to know the backend reality to this technology implementation.

  • http://twitter.com/DougCornelius Doug Cornelius

    I think Jeff Bezos may disagree with your opening line and point to Amazon as the future of retail. 

    Perhaps that’s part of the problem with bricks and mortar retail. They need to compete with the ruthless efficiency of on-line retailers (where you are also ringing up your order).  What’s to keep you going to the store instead of ordering online? You don’t want to pay for shipping, you can’t wait for the delay, or are just looking for gift-giving serendipity? If that’s the segment then retailers are heading towards a niche.

    Cashiers are expensive, with even the best of them prone to mistakes, theft, and inefficiency.  They are still needed in the supermarkets because loose fruit and vegetables are difficult to ring-up. (Never get behind a person in the self-checkout line with a basket of vegetables.)

    Hopefully retailers will move the resources from the checkout line to the store aisles to answer questions. I think that’s where bricks and mortar can outperform on-line. Having a live person answer your questions. Sadly, I think retailers are merely cutting jobs and nor re-allocating their employees.

  • http://caddellinsightgroup.com jmcaddell

    Andrew, I agree with your premise. Cashiers in large stores don’t add any value to the experience. What brick-and-mortar retailers do need, however, is to invest savings from eliminating cashiers into hiring more people who can help customers find what they want, or make decisions around different products. That is a huge value add (that Amazon will have trouble duplicating, recommendation system or not) which can help make these stores relevant again.

    regards, John

  • Anonymous

    Couldn’t you just “ring up” fruit and vegetables in the produce section? Weigh’em, bag’em, tag’em and they’re just regular items.  That’s how it’s done in Europe and it works pretty well IMHO. At least you don’t have to make people wait at the checkout counter.

    In general though, I’ve always been frustrated when using machines that rely on a bagging area/ security scale to prevent shoplifting. I have always found “scan it” systems much easier to use.

  • Ankur Sethi

    Ever bought groceries from an asian grocery store?   A whole bag of actual vegetables that you *gasp* bought loose from a bin?  Nothing in a can with a UPC?  You need a physical checkout person for that.  Weigh it and give it a name, decide whether it’s Korean Cabbage or Bok Choy

  • http://profiles.google.com/bobfoster Bob Foster

    In the first place, the store had at least two human cashiers, in photo and pharmacy. People who don’t like the machines would just go there. Which brings me to the second issue: The checkout machines I am familiar with (in our local Lucky store and elsewhere) are a horrible experience, alternately giving you useless advice or nagging you, unable to deal with, e.g., booze without human intervention, repeatedly ordering you to put things in the bagging area when it fails to sense what you put there. Since all swiping/bagging is done by amateurs, checkout is much slower than a human cashier. (In fact, stores meter the speed of human cashiers; if a cashier were that slow, he’d be fired.) So there’s always a line at the machines filled with people staring impatiently at you as you fumble through price lookup for the many things that are not barcoded. In short, checkout machines a recipe for high blood pressure. If that’s the future, I’ll start shopping at the local Mexican/Asian stores. Even people who don’t speak your language do a much better job than any current machine.

  • Alex

    Given the choice, I always take the human.  I put my basket down, smile and say hi, pay, and pick up my bags.  Easy!  I don’t want to have to worry with figuring out and typing in codes for all the things I bought that don’t have barcodes (i.e., many or most of them).  I don’t want to have to worry about figuring how to put them in bags nicely.  I certainly don’t want to have to fight with the machine that, to put it politely, doesn’t have the best user interface in the world.

    It depends all on the market.  Your national chain megamart is doing it now because they’re *all about* selling a billion things with barcodes on them, and because they compete on volume and price, don’t necessarily care that the consumer experience is frustrating.  My local mom-n-pop store, with things that I actually want to buy, isn’t going to do this.

    In fact, I wonder if “self check out” is going to survive: things that can easily be checked out, can also be bought online.  The only use case I see for this is barcoded things you either need right now or from a store that doesn’t deliver/ship.  Most of America is passing through the sweet spot right now: they’re comfortable enough to use a computer *at* a brick-n-mortar store, but not comfortable enough to do all their barcode-item shopping online.  Once they get comfortable buying everything from Amazon (and Amazon Fresh), who’s going to want to go to the store?

  • http://twitter.com/thedan1984 Dan Bochichio

    Most self-checkout units in New York (upstate too, not talking about busy areas like NYC) have a  “No UPC Code” button which allows you to enter the item’s code (which is present on most produce, and for those that aren’t, you just reference a laminated sheet of paper to find the code for your food item)

    Not saying it’s like this everywhere, but many self-checkout machines accept nonUPC/packaged items AND have their own built in scale on the scanner.

    I’m not advocating a self-checkout World, there are way to many people who slow the process down (on the consumer end) to make me want to shop at a place with no human-cashiers

  • http://twitter.com/thedan1984 Dan Bochichio

    A lot of places let you weigh + enter an ID code for your produce, salad bar, or bakery items here in the States. So yes, you’re correct, you can “ring up” your own goodies just as easily as a trained employee.

  • Anonymous

    I say less than a decade. Do you agree?

    I agree, and I’m grateful. For me, the Self-Checkout is virtually always faster, with the only exceptions being Fruits and Produce (which don’t have bar codes). I’ve actually avoided grocery stores that don’t have Self-Checkout.

    There may be a generational gap on this, though. I’ve met a lot of people who complain about Self-Checkouts, and most of them are Late 30s and up.

  • Anonymous

    Most gas stations these days usually sell other stuff inside the station, like 7-11 and their slurpies. Keeping the mini-stores open is probably part of the reason why most gas stations haven’t gone completely automated, although I’ve seen some of them like that as well (mostly they’re just pumps attached to some other business, like a grocery store).

  • Otoole_janet

    It’s not about age…it’s about JOBS…or lack of them when self-serve takes over.

  • http://kohchangsun.com/ Rob

     You can be as comfortable as you like with technology, but all it adds up to is job loss… this is the elephant in the room nobody is talking about. When we get all automated… where do people make a living?

  • JTW

    it’s also the reason manned stations haven’t gone bankrupt. The margins (for the gas station owner) on the gas they sell are so slim they often barely (if at all) cover the cost of operating the place.

  • Mortdubois

    And yet we still have bank tellers.  Lots of bank tellers.

  • http://startupdispatch.com/ Puranjay

    Andrew,

    This post again brings forth a belief I’ve held for the past two years: we’re coming to a point where technology might actually make our lives more, not less difficult.

    Three years after the Lehmann Brothers collapse, we are still in recession with little positive signs. There are few jobs, not just in USA, but also in Europe and Asia. 

    Something has changed, fundamentally: technology has now made more and more jobs obsolete.

    You don’t need a cashier anymore. A little self-checkout counter can do the same job as (if not more) efficiently. That’s one less job in the economy. Multiply this by x10 as every industry gets impacted by technology, and you are looking at thousands of less jobs in the world.

    Whenever I see a sci-fi movie with robots whirring by controlled by intelligent computers, I always wonder: what the heck do the people do?

    And the sad answer is that as technology becomes even more smarter, more and more people will find themselves redundant. Technology doesn’t create nearly as many jobs as it destroys. If this trend continues (which it will, no doubt), we might have to actually artificially limit technological progress.

  • Papanox

    Just imagine if you saw a gas station attendant come out to pump your gas and clean your windshield (other than in Oregon). I remember the day that this was inconceivable. I believe this will be the case with cashiers in stores.

  • http://info-architecure.blogspot.com driessen

    Yep, in Holland we have more and more of these. For instance in most Albert Heijn’s (grocery stores).

  • http://www.kiosksinc.com/interactive-kiosks interactive kiosks

    hese kiosks can undertake many transactions concurrently and generate more proceeds in a decreased amount of time. Most people imagine that technological innovation will help us to control our time much better and, in actual fact, much of technological innovation utilizes more time than it’s worth.

  • Sheamus Warior

    I like this blog and as for as storing the items is concerned I think these must be placed at accessible area if you require to take it out more frequently.
    blog

  • Pocha huntas

    The advancement is taken place in retail businesses that will surely change the trends, like the introduction of NCR machines.

    http://www.retailblog.com

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