Should All Retailers Utilize Self-Service?

In today’s fast-paced world, convenience is king. Yet currently, there has been a growing divide between supporters and detractors of self-service and self-checkout lanes.

Self-serve retail, also known as unattended retail, removes the cashier from the equation. It encompasses various checkout systems, from kiosks and vending machines to mobile payment devices. The goal is to put customers in control of their payment experience, mimicking the ease of online shopping in physical stores.

For consumers, self-serve checkouts offer speed and autonomy. Research shows that most users opt for self-checkout to avoid long lines and enjoy a faster transaction process. As digitally native consumers prioritize convenience, businesses must adapt to meet these evolving expectations to stay competitive.

But it’s not just consumers who benefit. Self-serve retail also streamlines operations for merchants, reducing in-store congestion and cutting labor costs. This efficiency not only improves the buying experience but also boosts profitability.

Self-serve retail comes in various forms, from self-checkout lanes in grocery stores to smart basket technology that automatically calculates purchases. Kiosks and vending machines are also on the rise, offering everything from movie tickets to meals with minimal wait times.

Taco Bell has experienced a significant uptick in digital sales, boasting a 35% growth, thanks to the introduction of in-store kiosks. These kiosks, present in all of its quick-service eateries, offer customers control over their orders and time. Paired with Taco Bell’s mobile app, these kiosks have become a staple in the fast-food industry.

According to Fortune Business Insights, the global kiosk market reached an estimated value of $22.69 billion in 2021. Forecasting ahead, the market is expected to experience substantial growth at a compound annual growth rate (CAGR) of 12.3%, reaching approximately $51.05 billion by 2028.

The benefits of these kiosks are manifold. They notably reduce long lines, a major turnoff for 82% of consumers, according to a 2023 survey by Retail Customer Experience. Additionally, they streamline the ordering process, ensuring accuracy and efficiency. By freeing up employees’ time, Taco Bell can focus on delivering quality service and aims to transition to digital sales for 100% of its transactions in the near future.

For businesses, self-serve retail saves costs, improves capacity, and meets consumer preferences for choice and convenience. By offering both self-serve and traditional checkout options, businesses can cater to a wide range of customers and enhance the overall shopping experience.

However, before diving into self-serve retail, merchants must consider factors like security, compliance, and payment processing. Ensuring that self-serve systems meet PCI standards and implementing fraud protection measures is crucial to safeguarding transactions.

Just last week, California bill SB 1446 proposed regulations for self-checkout systems in stores, aiming to preserve jobs and address concerns about theft. Supported by the United Food and Commercial Workers union, it faces opposition from the California Retailers Association. Retailers like Walmart are exploring alternatives, while self-checkout remains popular among consumers despite concerns about theft.

Furthermore, Raydiant, a platform managing kiosk content, surveyed retail customers over the last three years, finding increased usage and evolving attitudes. The survey found that 85% of customers view self-checkout as faster than employee-staffed lanes, and 60% prefer it over manned checkouts. Despite the popularity, however, 67% have experienced self-service kiosk failures, with 25% discontinuing use due to bad experiences.

One of the key benefits of self-service kiosks is their ability to streamline a variety of processes. Instead of waiting in long queues, customers can quickly access the information they need and complete tasks such as placing orders, making payments, or checking into facilities. This efficiency not only reduces wait times but also minimizes the risk of customers turning to competitors due to frustration.

Moreover, self-service kiosks operate 24/7, catering to customers’ needs beyond traditional business hours. By enabling customers to interact with a business at their own pace, a retailer can enhance their experience and increase throughput.

Ultimately, self-service in retail is a powerful tool that puts the customer in control of their transactions and interactions with a business. Whether it’s ordering a customized meal at a fast-food joint or browsing product information in a retail store, this technology offers enhanced control and convenience, potentially leading to greater satisfaction and loyalty.