This document presents the findings of a feasibility study on introducing self-checkout machines in supermarkets in Dubai. It finds there is demand among consumers for self-checkout due to the benefits of reduced waiting times, increased privacy and control. While retailers have concerns about costs and security, the study estimates self-checkout machines would pay for themselves within two years due to reduced labor costs. It recommends a phased introduction along with promotional discounts and awareness campaigns to encourage adoption.

1. Feasibility study of self-checkout machines at
supermarkets in Dubai
Chetan Goenka & Kushagra Jain

2. Changes in consumer behavior
SpeedPrivacy
Control
Psychological
needs

3. Current scenarios
“10 minutes in line just to buy a
can of soda …Its ridiculous!!!”
“I don’t want to hand over my card...
and I think the cashier swiped my goods more than once…
also he didn’t give me right discounts”
“Ohhh…I am not going to buy them (personal goods)…
the lady at the counter smirks at me when she sees them”

4. Self checkout
Enter -----Select ----Collect----
Scan---- Pay ---- Bag ---- Exit
I can be sure of
what I pay now
I can buy anything
without any
embarrassment
Can buy even
one item
without getting
delayed

7. Concept providers

8. Success Stories
?

9. Why not in Dubai ?
• Largest – Dubai Mall
• Tallest – Burj Khalifa
• Luxurious– Burj Al Arab, Atlantis
• Techno-marvel – Palm

10. About NCR
• NCR –ranked 10th global
hardware maintenance and
support provider across all the
industry segments
• Their Clients include:
– 17 of the world’s top 20 retailers
– 19 of the world’s top 20 banks
– 8 of the world’s top 10 telecom
providers
– 6 of the top 7 airlines
Source: NCR website

11. What and How to find?
Are the Retailers ready ? Are the Consumers ready ?
Qualitative Research Quantitative Research

12. Demographics
28%
24%
22%
26%
Income Range
Less than 5K 5K to 10K
10K to 20K 20K and above
34%
66%
Gender
Female Male
54%34%
12%
Frequency of visits
Weekly Fortnightly Monthly
8%
20%
24%22%
18%
8%
Nationalities
UAE Nationals Expat Arabs
Indians Other Asians
Americans Other Westerners
24%50%
12%
14%
Occupation
Student Salaried
Self Employed Housewife4%
42%
42%
12%
Age
13-21 21-30
30-45 45-60

13. Market Potential
North
America
59%
Western
Europe
30%
Asia
Pacific
7%
MENA
and Latin
America
0
100
200
300
400
500
2006 2008 2010 2012 2014 2016
Installed Base of SCO (in thousands)
Source: RBR Report, 2009
Predictions for 2014

14. Strengths
• Reduces long waiting time.
• Increases Privacy & control.
• Payback period of less than
two years
• Compatible with other POS
machines
Opportunities
• GCC has demand for it
• Test market for China and
India
• Consumer education can
lead to wide acceptance
Threats
• Alternate technologies like
handheld scanner
Weaknesses
• Perception of cost cutting
• Occasional hitches may
frustrate customers
• Initial slump in Impulse
purchase at counters
S W
TO

15. PSA Model
Perceived attributes of Innovation
Relative
Advantage
Degree to which an
innovation is perceived
better than competing
products
Compatibility
Degree to which an
innovation is consistent
with existing values,
experiences and needs
Simplicity
Degree to which an
innovation is perceived
as complex and difficult
to use
Trial-ability
Degree to which an
innovation may be
experimented with on a
limited base
Result of adoption process—Rate of Adoption—usage of innovation

16. Concerns expressed by retailers in
implementation
Customer
Profile
High
Initial Cost
Cheap
available
labor
Security &
Imperfection
in machines
Large shop
footprint
Current
Economy
Issues

17. Retailers Concerns
Concern of Retailer Spinneys Lulu Al Maya Choithram's DDF Auchan
Customer Profile     
Cheap Labor    
Economic Scenario  
Security Concerns     
Large footprint 
High installation cost  

18. Findings
&
Recommendations

19. LAUNCH IT !!!

20. 0
2
4
6
8
10
12
14
16
Most
Likely
Likely Less Likely Not likely
8
6 4
1
5
4
3
3
Waiting Time v/s Usage likeliness
1 to 3 3 to 5 5 to 10 more than 10
10%
56%
30%
4%
Waiting time
1 to 3 3 to 5
5 to 10 more than 10

21. 0
2
4
6
8
10
12
14
Most Likely
Likely
Less Likely
Not likely
Time of Shopping V/s Usage Likeliness
Peak hours Non- Peak Anytime
26%
67%
7%
Try New Technology
To reduce waiting time
While buying personal
goods

22. Spread
Awareness

23. Awareness
Interest
and
Evaluation
Trial and
Adoption
Aware
52%
Not
aware
48%
Awareness

24. SHOW THEM
THE MONEY

25. Costs
• Installation
• Implementation
• Training
• Maintenance
• Supervisors Cost
Benefits
• Salaries of Cashiers and
Baggers
• Reduced Shrinkage
• Reduced turnover cost
• Increased sales
• Increased customer
satisfaction
Cost Benefit Analysis

26. Payback Period 1.9 years
Discounted Payback Period 2.2 years
Returns
Net Annual Benefits 6,327,000 AED
Net Onetime Costs 11,909,000 AED
Results of the Model (10% discounting)
PV of Future inflows (4 years) 20,055,739 AED
PV of outflows 11,909,000 AED
NPV 8,146,739 AED
IRR 39%
Results

27. Retailers say
people wont accept
IS IT SO ?

28. 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
UAE Nat Expat
Arab
Indian Other
Asian
European Oth.
Westrs
Nationality v/s likeliness of usage
Most Likely Likely Less Likely Not likely
0
1
1
2
2
3
3
4
4
5
5
Most
Likely
Likely Less
Likely
Not
likely
Satisfaction on a 5 scale v/s
Usage likeliness
3 4 5
Aware
52%
Not aware
48%
0
2
4
6
8
10
12
14
16
18
Most Likely Likely Less Likely Not likely
Monthly Income V/s Usage Likeliness
< 5K AED 5k-10K AED 10k-20K AED >20K AED

29. 50%
45%
5%
Extra work
Lack of confidence
Machine may be faulty
0
2
4
6
8
10
12
14
16
18
Most Likely Likely Less Likely Not likely
No. of items bought V/s Usage
Likeliness
< 5 5 to 10 10 to 20 20 to 40 > 40
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
13-20 years 21-30 years 31-45 years 46- 60 years
Age V/s Usage Likeliness
Most Likely Likely
Less Likely Not likely

30. TAKE
SMALL STEPS

31. Phased Implementations
• T1 first  T2 will
follow
• Strip down versions
• Loans
• Strategic locations
• Integrate with
employees 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
UAE Nat Expat
Arab
Indian Other
Asian
European Oth.
Westrs
Nationality v/s likeliness of
usage
Most Likely Likely Less Likely Not likely

32. PUSH
PUSH
PUSH

33. • Discounts
• Promotions targeting the
young generations
• Integrating up the value
chain – Express
checkouts/ 24/7 stores
Most Like
24%
Likely
52%
Less Likely
24%
On giving 1% discount

35. …so finally
Spread awareness,
Show retailers the money and
launch it.
There is Demand for it,
Take strategic steps to
push the technology and it
would be a success

36. Thank You!!!

37. Questions

38. Limitations
• We have not interviewed age group below 13 years of age and
above 60 years of age.
• Only few people were interviewed among age group of 13 to
21 years and 45 to 60 years of age.
• As a matter of personal inconvenience to the Emirati women
and Expat Arabic women, we could not interview more of
them.
• Some survey responses were obtained online.
• We tried to interview the educated people, Asians who have
stayed in US/ UK for a year or so and know about technology.

39. Cost benefit analysis
Figures as told in Interview
No. of stores of the supermarket 75
Average number of lanes in the
supermarket
30
Annual sales of the store 3,000,000,000 AED
Average Weekly sales in the store 769,231 AED
Cashier and Baggers work in 2 shifts
Industry Averages
Cashier Labor rate per month 3000 AED
Bagger Labor rate per month 1200 AED
Annual shrink rate 3.00%
Shrinkage due to cashier 30.00%
Labor turnover rate 40%
Traditional POS lanes removed 75
No of cashiers that can be reduced – Cashiers work in 2 shifts 150
No. of baggers that can be reduced – Work in 2 shifts 150
NCR Self check out that would be installed 75
No. of supervisors required for 75 37
Salary of supervisor per month 4000 AED
Each Old POS Machine can be scrapped 1000 AED
Cost of Deployment and training of people 500,000 AED
Discounting Rate 10 %
New Machines will work for 4 years
Assumptions
Estimated self-checkout adoption rate 10 %

40. Cost of 75 NCR Self-Checkout terminals (as provided by NCR) Installations +
Implementation
Licensing cost + Software + 1st terminal (USD) 600,000
Remaining 74 machines @USD 35,000 each 2,590,000
Total Cost of 75 terminals (USD) 3,190,000
Total Cost of 75 terminals (AED) 11,484,000
Cost Benefit Analysis
Onetime costs and benefits
Cost of Installation and Integration of 75 terminals 11,484,000 AED
Cost of Deployment and training of people 500,000 AED
Receipts from selling of 75 old terminals (75,000) AED
Total Installation and Implementation Cost 11,909,000 AED
Yearly Costs and Benefits
Yearly Costs Involved
Cost of employing the supervisors for SCO machines 1,800,000 AED
Increased Cost of Maintenance 1,500,000 AED
Total Yearly Costs 3,300,000 AED
Yearly Benefits Involved
Reduced cost in respect of cashiers 5,400,000 AED
Reduced cost in respect of reduced baggers 2,160,000 AED
Savings due to shrinkage rate 2,025,000 AED
Saving due to reduced turnover cost 42,000 AED
Total Yearly Benefits 9,627,000 AED
Net Yearly Benefits 6,327,000 AED