.jpg)
Self-checkout has become a polarizing part of retail. Retailers want to use it because it allows them to cut labor costs, but it also comes with higher levels of theft.
Consumers are mixed about the concept, too. Some people like the self-service option while others miss having an employee check their items. Additionally, some shoppers are happy not having to talk to a checkout clerk while others miss the interaction.
RELATED: Costco makes big change, shares news about membership fee increase
A number of retail chains have taken the decision to scale back self-checkout. Goal (TGT) for example, has restricted self-checkout to 10 items or fewer and reduced its hours of availability in some stores while removing it from others.
Self-checkout presents a difficult dilemma for retailers. It’s easy to see why they would want this as labor costs rise and companies look for ways to cut costs. But it’s also easy to see the downside as shrinkage — losses from theft and more — increases when customers use self-checkout.
Consumers ideally want the option of using self-checkout or choosing traditional checkout. However, more companies are backing away from self-checkout, and one of the largest retail chains has made the decision to eliminate self-checkout for the most part.
Image source&col; Getty Images
Dollar General is making big changes to self-checkout
Todd Vassos, CEO of Dollar General, shared that his company plans to make three major changes to its self-checkout system at more than 14,000 stores over the course of its launch. Q4 earnings call.
“Although self-checkout adoption rates have been high, we believe there is truly no substitute for having an employee at the front end of the store greeting customers and providing excellent customer service, including at checkout. Most importantly, when choosing our self-checkout solution “We have implemented a product that is convertible from self-checkout to associate-assisted checkout,” he said.
This is a change that the company is starting to make.
“To that end, we immediately began converting some or all of our self-checkout registers to assisted checkout options at nearly 9,000 stores. This is intended to direct traffic first to our staffed registers, with assisted checkout options available as second or third options,” he added. : “To reduce lines during high-volume times.”
Dollar General limits self-checkout transactions
Vassos detailed other changes the company made during the call.
“Our second course of action will apply to all remaining self-checkout stores, as we begin limiting self-checkout to transactions of five or fewer items,” he said.
However, some stores will also lose self-checkout as an option altogether.
“Finally, during the first half of the year, we plan to completely remove self-checkout from more than 300 of our largest stores. Collectively, we believe these steps are in line with where the customer wants us to be, which includes increasing personal interaction with them in store,” Vasos shared. .
The CEO believes the self-checkout changes, along with other moves, will help the discount chain limit its shrinkage.
“Alongside our self-checkout changes, we are also implementing a variety of other actions to reduce shrinkage this year, including inventory reduction efforts, as we see additional opportunity in 2024,” he said. “SKU rationalization, additional shrink incentive programs for our store managers to encourage and foster a greater sense of ownership; and the use of high-shrink schemes, where we will remove certain high-shrink items from high-shrink stores to target the greatest opportunity for improvement.”
RELATED: Get the best cruise tips, deals and news from our expert cruisers
Vasos acknowledges that implementing the changes will take time.
“While we expect continued headwinds from the downturn early this year, we believe our actions will have a significant mitigating impact in the back half of the year and into 2025. Overall, we believe these actions in our stores will lead to improvements in customer satisfaction,” he added. “Including customer service, availability and on-shelf convenience, enhancing the associate experience in our stores, including improving employee engagement and retention, and driving improvements in financial results, including sales and curtailment.”
Dollar General shares closed at $136.91, up 7% on the day. The jump narrowed the stock’s May loss to 1.6%. On an annual basis, shares rose 0.7%.
The stock has been riding high during the pandemic and rising inflation afterward. It reached $260 in October 2022.
