Technology's Welcomed Impact on Labor Cost

1. TECHNOLOGY’S
WELCOMED IMPACT
ON LABOR SAVINGS
MIKE GIBLIN, LPC
Director of Research, Loss Prevention Research Council
LAURA LASKO
Senior Corporate Investigator, Wakefern Food Corp.

2. OVERVIEW
Although it has been in existence for 25+ years, retailers
nationwide have increasingly expanded their use of Self-
Checkout technology to improve Front End efficiency and
enhance the customer experience.
Contributing Factors:
• Increased Minimum Wage
• Decrease in Applicants for Available Positions
• Desire to Mirror “Frictionless” Online Shopping
Experience within Brick + Mortar Locations

3. CHALLENGES
How to Effectively Reduce Front End Labor Costs without
Sacrificing Customer Service / Efficiency at Checkout
How to Adapt to Changing Customer Expectations
Regarding Acceptable Checkout Times
How to Keep Associates Engaged with Customers, While
Maintaining a “Frictionless” Experience
How to Drive Self-Checkout Utilization without Increasing
a Retailer’s Exposure to Theft / Shrink

4. STUDY OUTLINE
LPRC conducted a survey of 25
Retailers on Smart Checkout
Offender Interview data & video on
SCO and theft deterrents

5. SELF-CHECKOUT
UTILIZATION

6. SELF-CHECKOUT UTILIZATION
Retailers with SCO use it in 59% of their stores
First SCO installed in: 2018 2012 2018 2009 2019
2008 2019 2011 2008 1992 2009 1997 2007

7. SELF-CHECKOUT UTILIZATION
Average # SCO Lanes Installed per Store: 7.1
% of SCO Lanes vs. Traditional Lanes: 33%
Average: SCO as 29% of ALL Transactions
Goal Average: SCO as 40% of ALL Transactions

8. SELF-CHECKOUT UTILIZATION
According to Survey Data:
33% of ALL Open Lanes are SCO Between 11:00a-7:00p
• SCO Lanes are Typically First to Open + Last to Close
29% of ALL Transaction Activity Occurs at SCO
During This Time Frame

9. LABOR SAVINGS POTENTIAL
Average Cashier Rate / Hour: $12.00
Average Cashier Hours Per Week: 1150
Average Cashier Labor Cost Per Week: $13,800
Avg # of Total Transactions Processed / Week: 25,000

10. LABOR SAVINGS POTENTIAL
Installation of (4) SCO Terminals
• 15 Hours Per SCO Terminal Per Day Utilization [7a-10p]
• 105 Hours Per SCO Terminal Per Week Available
• 420 Hours Total Hours Available to Utilize
New Potential Cashier Hours Per Week: 730
New Potential Cashier Labor Cost Per Week: $8760
[Note]: RAP Station Attendant Hours Must Be Added Back In]

11. SELF-CHECKOUT
SHRINK
AWARENESS

12. What is the approximate percentage change in shrink you've
experienced per store as a result of utilizing self-checkout?
+21.7%

13. To what extent do you believe that implementing Self Checkout in
your stores has taught previously honest individuals how to shoplift?
0
36%
50%
0
14%
1- Not at All 2 3- Somewhat 4 5- Very Much

14. OFFENDERS’ PERCEPTION SCO THEFT EASE
38%
34%
20%
6%
2%
Very Easy Somewhat Easy Neutral Somewhat Difficult Very Difficult
n=50

15. Why Use
Self-
Checkout for
Theft?
Reason to Use SCO Frequency
Less attention from employees 98% (n=49)
Easier to get away with 68% (n=34)
Closer to exit 56% (n=28)
Less attention from other customers 48% (n=24)
Neutralize guilt 34% (n=17)
Harder to prosecute 16% (n=8)
REASONS FOR CHOOSING SCO

16. SCO TERMINAL LAYOUT
• Corral vs. Aisle Format
• Staging of SCO Terminals Away from Exit Door
• Placement of Attendant Podium at Back of SCO Area
• Use of Public View Monitors or Integrated Video Feeds
that May Deter Dishonest Behavior
• Deployment of Appropriate CCTV Coverage

17. IMPORTANCE OF SCO ATTENDANT
84% of offenders
admitted to using SCO
to avoid employee
oversight
62% said attentive SCO
attendant would deter
them from theft

18. EFFECTIVENESS OF ATTENDANT ACTIONS
Level of Engagement out of 7
Come over and acknowledge
customer’s transaction 5.48
Associates to check off
receipts 4.88
Just be present and appear to
be watching customers 4.44
Ask customer if assistance is
needed 3.94

19. TRAINING
SCO Attendants Should Be Familiar with ALL Front End
Policies + Procedures. Knowing How to Look for +
Respond to these Scenarios Aids in Reducing Shrink +
Creates a Positive Customer Experience at Checkout.
• Weight Mismatches / Scale Errors
• Scale Security – “Skip Bagging” Feature
• Use of Manual Override #s
• How to Handle Walkouts [No Payment Received]

20. SCHEDULING
Enough Self-Checkout Attendants Should Be Scheduled to Help
Monitor the Area During Busier Hours. Attendants Should Avoid
Standing at the Podium + Regularly Interact with Customers.
Stores May Need to Adjust Their Front End Labor Projections
After Initial SCO Deployment
On Average, One SCO Attendant is Recommended per Every (6)
SCO Terminals in Operation
• Depending on Utilization + Time of Day
• Customers Need to be Trained Too! [May Be Hesitant to Try It]

21. REPORTING
Track Self-Checkout Utilization vs. Traditional Lanes
• Transaction Counts
• Tender Type
• Average Basket [Item Count + Transaction Total]
Track Store Shrink – Pre + Post SCO Installation
Track Apprehension Activity / Walkouts at SCO
Use of Exception Based Reporting to Monitor POS Activity

22. SHRINK AWARENESS
SCO Attendants Must Be Trained to Identify Potential
Misuse, Including:
• Failure to Scan All Items
• Incorrect PLU Entries
• Improper Placement of Weighted Items on Scale
• Coupon Misuse
• Incomplete Payments
• Attendant Mode [Turns Off Security]

23. NEXT STEPS

24. NEXT STEPS
Evaluate Current Best Practices for SCO Utilization
• Do They Cover All Facets of SCO Operations?
Create Reporting to Help Confirm Self-Checkout
Terminals are being Properly Utilized to Realize Labor
Savings
Monitor Shrink Data to Identify and React to Any
Notable Increase

25. Overall, to what extent do you believe that Self Checkout has
provided you benefit that outweighs the risks/negatives?
0
7%
43%
50%
0
1- Not at All 2 3- Somewhat 4 5- Very Much

26. Please rate your agreement with the following statement: Self
Checkout is a critical aspect of my companies strategy for the future
0 0
14%
29%
57%
1- Not at All 2 3- Somewhat 4 5- Very Much

27. LPRC Innovate
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SMART CHECKOUT CENTER OF EXCELLENCE