When frictionless checkout company Mashgin first debuted its self-checkout services for convenience stores, the company tried to get its kiosks into as many locations as possible. 

But the tech firm found out this was a poor strategy, because the kiosks weren’t able to accept payments like cash, loyalty cards and coupons — which was restricting for customers.

“We’ve made all the mistakes already when it comes to driving customer adoption,” Jack Hogan, senior vice president of sales and partnerships for Mashgin, said in a panel discussion during Invenco’s 2024 Retail Technology Conference on May 7.

That friction made Hogan realize that self-checkout kiosks should not be implemented in convenience stores unless they can be used by at least 85% of customers from the very first day.

“Day one is your first chance to make the first impression,” he noted.

While some retailers, like Circle K and Chestnut Market, have shown that they’re all-in on self-checkout kiosks, other operators have yet to get started with the technology. Here are steps some retailers suggest for getting a self-checkout program up and running, and ensuring it’s as successful as possible.

Even before implementing self-checkout, convenience store retailers need to know where they are on the “frictionless spectrum,” Larry Bowden, director of sales, retail solutions, for Invenco, said during the panel. If retailers find that they aren’t far enough along on that spectrum, maybe self-checkout isn’t for them yet.

“As a retailer, maybe you need to figure out what works best. What do you want to do? How frictionless should it be?” Bowden said. “Maybe that's a different thing for each retailer, and maybe it's different for each retail segment.” 

Bowden noted that frictionless solutions can range from having a “box with cash” to systems like Amazon’s Just Walk Out technology. 

Figuring out how far along a retailer is takes into account where they’re located and who their core audience is, he noted.

“Totally embrace it, make it part of your operational DNA,” Bowden said. “And if you're not prepared to do that, you probably shouldn't [install self-checkout].”

Every expert on the panel agreed that location is key to succeeding with self-checkout. 

“Where you put these things is so, so key,” Bowden said. “Not only to drive all your guests to a central location for payment, but also to allow your associates to engage better.”

But where in the store should the kiosks be placed?

Mashgin has tried placing its self-checkout kiosks at different spots throughout convenience stores, such as near coffee machines or next to standing coolers by the exits, Hogan said.

It turns out that at the register — or where the register used to be, if the store no longer has one — is the best way to go.

“As a retailer, maybe you need to figure out what works best. What do you want to do? How frictionless should it be?”

Larry Bowden

Director of sales, retail solutions, for Invenco

“You need customers to understand where commerce takes place, and commerce takes place where the old point of sale used to be,” Hogan said.

When asked during the forum if it’s better to lead with self-checkout or a traditional cashier, Hogan said doing both is ideal, as long as there’s enough space between the two payment sections.

“The best way to do [both] is have a queue line dump out at the self-checkout first,” he said. “But this is really key — you have to put the queue line back far enough from the counter so people can flow.

Convenience retailers would be remiss if their self-checkout kiosks didn’t offer the capability to pay with cash, multiple panelists said.

Curtis Hallowell, director of strategic alliances for Crane Payment Innovations, said that nearly half of convenience store sales under $25 are paid in cash, so retailers that don’t offer cash payments at self-checkout will alienate those customers. He also noted that retailers that don’t have cash payments at their kiosks may only reach 20% to 25% consumer adoption instead of 40% to 50%.

“There's still a school of thought out there of, ‘I'm going to deploy self-checkout with credit only, I'm going to be fine,’” he said. And for the most part, you're going to be fine… but don't underestimate the power of adding cash to your self-checkout.” 

Bowden said that when Invenco first launched its self-checkout kiosks, the machines didn’t have the ability to accept cash. While Invenco chose this strategy based on increasing the overall number of transactions, the company realized that at about 50% to 60% of the locations it had kiosks in, customers were still paying in cash at the register instead of using the machines.

“It really opened our eyes to the viability of cash,” Bowden said.

Self-checkout machines not working properly has become a deterrent to consumers over time. Both Hogan and Hallowell agreed that coins and dollar bills getting stuck in the kiosks' cash dispensers — what they call “cash jams”  — is one of the biggest points of failure they see with these kiosks, and it’s often because the machines aren’t clean.

“The biggest problem is when someone dumps a 44-ounce Polar Pop into the coin collection, which we see probably once a week,” Hogan said.

Hogan and Hallowell agreed this is easy to fix by training staff more frequently on how to properly care for and clean the machines. Mashgin has also implemented plastic flaps that cover and protect the coin collector on the kiosks, Hogan said.

“Have some form of service agreement where it's being cleaned, or just once a week, get in there and wipe it down,” Hallowell said. “That will eliminate most of your problems.”

Oftentimes, when upper management invests in self-checkout, store-level staff feel their jobs are in jeopardy, multiple executives said. Assuring staff that this isn’t the case and that kiosks can help them redirect their attention to tasks outside of checkout can help get them on board with the new payment platforms.

“Make sure you engage with your store managers, make sure they understand the value, because it is going to produce a better experience not only for the store's clients but for the store’s employees,” Hallowell said.

Once store staff sees the value in self-checkout kiosks, teaching them the ins and outs of the technology is essential so they can help customers navigate the checkout process, Bowden noted.

“Cashier engagement [is] huge,” Bowden said. “Have the associates really engage with the guests in the store and point them towards the solution.

By Brett Dworski on May 20, 2024
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