Can Self-Checkout Be Retailers' Secret Weapon?

by , Jan 26, 2012, 11:53 AM
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The other day at Best Buy, I encountered my first sighting of a mobilized tag-team couple. In the lead, the wife picked up cameras and accessories and recited the brands and model numbers, while the husband did mobile lookups on Amazon and barked out prices. These two had it down to an efficient science and a great division of labor. She was curating choices and he was acting as a kind of C3PO digital assistant.

What they didn’t seem to know or care about was that Best Buy itself has one of the best in-store apps -- and in my experience, many store clerks there will try to match a price you show them from a rival. The challenge for Best Buy will be to communicate all of these opportunities to customers like this woman and her C3PO as they walk in the door.

The battle for shoppers’ hearts and minds used to take place mainly outside of the store itself, in the promotional campaigns that drove people to a brick-and-mortar choice. Now it is a ground game. Who can get shopper consciousness in the store? How can the retailers add value to their own mobile experience so the mobilized consumer defaults to their store’s app or mobile site?

Self-checkout may be one unique attribute a retailer can bring to the table. For many of us, the idea of using cell phones to make an m-payment in the aisle, bypass checkout, and walk out the door with the item seemed a bit daft at first. But late last year, Apple helped highlight the model by adding an EasyPay function to its own app for select in-store purchases.

Apple was far from the first to do m-checkout, however. For example, Boston-based toy and baby gear retailer Magic Beans has an AisleBuyer app that enables in-store shoppers to scan items in the store to get more information, put it into their mobile and real shopping carts and buy on the spot. They simply show their virtual receipt to a clerk as they leave the store. “On Black Friday we did 18% of all transactions at Magic Beans stores,” says Andrew Paradise, CEO of AisleBuyer, the m-shopping engine that built the app.

AisleBuyer has been doing this for over a year with Magic Beans. Meanwhile, a number of larger retailers continue the long, slow process of ramping up with in-store buying. But in year-over-year comparisons at Magic Beans, the number of purchases made using the app grew 285% on Black Friday. Apparently, long waiting lines are a great motivator for people adopting the app. 

One of the reasons that AisleBuyer saw this growth at the Magic Beans chain was that both companies learned how to better manage the in-store experience over the past year. Not surprisingly, education and signage are key to app adoption at the retail level. You need to let buyers know that their in-store experience can be improved.

Paradise says that having a salesperson at the entrance introducing the app is an important piece of this. The staff needs to know how the app works and needs to be versed in walking a customer through it. Paradise has introduced a companion “mClerk” app just for the store staff so they have an additional layer of information and can work in tandem with the mobilized shopper. The consumer-facing app has also been enhanced by pulling in more product info from Google Shopping. For smaller chains like Magic Beans this is important, because they can’t always generate enough content on their own.

One of the upsides to this technique is that it reasserts the clerk’s role as a real authority. As Paradise points out, both the Internet -- and now, mobile -- have flipped the old equation. Now consumers often know more about a product than the staff. This allows the clerk to work in concert with the user and in some ways, to stay a step ahead.

Also helpful is putting up signs about the app and its functionality behind the real checkout line so waiting customers can see there is an alternative.

In more than a year of working with the in-store app experience, Paradise says consumers clearly are getting past the fear factor of self-checkout. Willingness to engage the model has increased exponentially. But what is also apparent is that these features are not just defensive maneuvers that help a retailer retain customers. They increase business.

One interesting behavior, Paradise finds, is that the act of scanning a product in-store demonstrates a high degree of purchase intent. “About 60% of all items scanned were purchased,” he says.

That is an especially important revelation. It means that once a retailer has someone actively engaged in the research process, that shopper clearly is within inches of a sale where promotions and upselling are important. In fact, says Paradise, “we upsold 19% over the point of sale.” Not only did on-the-spot coupons help to drive purchase, but the retailer was able to effectively cross-sell other related items to increase average order size.

How all this translates from a boutique shop like Magic Beans  -- where people may be purchasing a few items at a time -- to a large-scale retailer is anyone’s guess, but we will know shortly, Paradise says. Major grocery chains are about to deploy the solution in thousands of stores in the next two quarters. At last week’s retail industry Big Show, AisleBuyer released a version 2.0 of its engine that includes an SDK retailers can use to craft their own apps or integrate specific functions like self-checkout into their existing apps.

Self-checkout is yet another mobile empowerment of the shopper. On one level, retailers may fear losing control of the retail experience to the app-enhanced consumer. But that battle may already have been lost, both by mass mobilization, as well as the general cluelessness of much of their staff and the inadequacies of the retail experience.

Mobile tools should be seen as a way to reconnect with consumers in the store. Here the brand can speak directly to shoppers, guide them through a process and the store itself, and offer genuinely valuable incentives along the way. Isn’t this better than the current retail experience of being harassed by a zombie stalker clerk (“Can I help you find something?”) who ends up not knowing the answer when you do have a question?

Yup, there are apps for that.

3 comments on "Can Self-Checkout Be Retailers' Secret Weapon?".

  1. Paula Lynn from Who Else Unlimited
    commented on: January 26, 2012 at 4:04 p.m.
    It is a shoplifter's secret weapon.
  2. Kevin Bullard from ILFUSION Creative
    commented on: January 26, 2012 at 5:47 p.m.
    Best Buy is doomed anyway...
  3. Phil Stafford from QThru
    commented on: January 26, 2012 at 8:10 p.m.
    As demonstrated at NRF 2012 there are numerous mobile shopping and payment platforms being offered. Several of the POS companies have added it to their offerings as well. Companies like QThru, Retailix and Modiv all have offerings that are similar or superior to what AisleBuyer is offering. Over the next two years it will be a race to see who can build and implement the best platform. Collected data will show that the shoppers and retailers are ready for this change to happen.

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