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Stuck at checkout? DIY lane's open.
Spot check at a Home Depot store shows customers like the self-checkout option, but still need help.
May 28, 2003: 2:16 PM EDT
By Parija Bhatnagar, CNN/Money Staff Writer

NEW YORK (CNN/Money) - There's no excuse for bad customer service, long queues, and rude cashiers at the checkout.

Some retailers know it, and they have a quick fix: Send shoppers to the do-it-yourself aisle and let them scan, bag, and pay for their purchases themselves.

While several grocery chains such as Kroger (KR: up $0.08 to $15.51, Research, Estimates), Albertson's (ABS: down $0.01 to $21.27, Research, Estimates) and A&P rolled out the self-scan checkouts a few years ago, it's only recently that U.S. mass merchandisers have also appeared keen on the concept.

The self-checkout machine at the Home Depot.  
The self-checkout machine at the Home Depot.

For example, Atlanta-based Home Depot (HD: up $0.17 to $31.62, Research, Estimates), the nation's largest home improvement chain, debuted the self-checkout system at select stores early this year, and the retailer is already touting its success.

"The self-checkout has reduced length of lines by a third and the time spent in lines by a third," said John Simley, spokesperson for Home Depot. "We estimate that 30 percent of all sales are made through self-checkout at stores equipped with them."

In fact, Home Depot is looking to expand its self-checkout systems, made by NCR Corp. (NCR: up $0.19 to $24.37, Research, Estimates), to about 800 stores, or half of its total stores, this year.

"They've been very well received with shoppers and people don't have problems with the new technology," added Simley. " We wanted to give customers a choice at the front end so that they could pay and leave quickly. The self-checkout has also allowed us to move staff away from registers and improve service in other areas of the store."

"After trying it once or twice, you don't want to go back to the staffed registers, and there's hardly ever a line at the self-checkout lanes," he said.

However, a weekend trip to one Home Depot store in New York City showed "cart-to-cart" traffic in self-checkout amid a mix of happy, frustrated, and some confused customers.

Do-it-yourself needs help

It's Keith Lichtman's second trip to the Home Depot in Long Island City. He's redoing his kitchen and bathroom and needed to buy bathroom tiles and accessories.

He's a self-checkout neophyte who didn't want to suffer through the long wait at the regular checkout for just a handful of items. In five minutes Lichtman had paid for all his purchases and was walking away with bag in hand.

Keith Lichtman calls the self-checkout machine at Home Depot   
Keith Lichtman calls the self-checkout machine at Home Depot "easy to use."

"This was good, easy to use, and I would definitely use it again," he said.

Ginger Johnson's first experience with self-checkout also seemed to go smoothly."It's fun, easy to follow and it makes more sense when you're buying a few items," she said.

The Long Island City store has four checkout terminals and one attendant station for a staff member. The terminal's computerized voice walks customers through the process, in either English or Spanish.

Customers scan their items, put them into a bag in the bagging station, and pay with either cash or credit.

NCR Corp. (NCR: up $0.19 to $24.37, Research, Estimates), Optimal Robotics (OPMR: up $0.13 to $7.90, Research, Estimates), and PSC Inc. are three companies currently manufacturing the self-checkout systems.

Kelly Kramer, spokesman for NCR, said the company sells the self-checkout systems in individual units consisting of four terminals with one supervisor's station. Each unit costs about $100,000. NCR has sold approximately 10,000 of its self-checkout FastLane brand systems over the past five years. "The sales are growing and there definitely an expanding market for this product," Kramer said.

PSC and Optimal Robotics could not be reached for comment.

Ginger Johnson said self-checkout made sense  
Ginger Johnson said self-checkout made sense "when you're buying a few items."

Separately, the latest data from the Food Marketing Institute indicated that about 30 percent of U.S. grocery chains have a self-checkout lave in at least one store.

While Lichtman and Johnson gave the self-checkout a thumbs-up, another batch of very irate Home Depot customers called it "confusing" and a "mess."

A built-in security measure in the system does not allow customers to remove items from the bag until the payment is completed, otherwise the process halts.

One shopper, who did not want to be interviewed, had problems understanding the procedure and eventually needed assistance.

Another couple needed help after the system failed to scan the product code. A few customers simply shied away from using it on their own and wanted a staff member to first demonstrate how it worked.

Needless to say, lines for the self-checkout lanes were soon as long as the regular checkout lanes.

The self-cashier idea also appears to be getting mixed reviews from industry insiders. Some, like analyst Bill Sims with Smith Barney Citigroup, call it an "excellent idea" and a convenient option for customers.

But retail expert George Whalin has his doubts. "Retailers are putting a great spin on this, saying that the customer benefits in the end. However, the self-checkout is not driven by customer service but by the retailer's objective to reduce costs."

"If you have six stations, you can eliminate those six staff positions. So it makes economic sense for the retailer," he said. "For the consumer, the benefit is that you don't have to deal with surly cashiers. But if you have trouble using it, you're pretty much on your own to figure it out. That won't get you out of the store any faster."

Even though Home Depot is sticking with the self-checkout option, retail analysts said it's still too early to determine whether discount and department store chains will follow suit.

When contacted for the story, a spokesperson for Home Depot's archrival Lowe's (LOW: up $0.89 to $41.61, Research, Estimates) said the company does not have plans to introduce the system at its stores. However, industry sources hint that Lowe's is showing interest in the do-it-yourself approach.  Top of page




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