Retail IT departments will soon be at the forefront of a customer service initiative critical to business success, using tills that allow people to scan and pay for their own goods.
Self-scanning technologies will be a key area of investment for large UK retailers, offering IT departments the chance to have a real impact on the customer experience, analysts believe. Projects to support these technologies must succeed if the business is not to lose ground to rival companies.
The move by supermarket giant Tesco to begin trials of self-scanning checkouts will be emulated by most of the major UK supermarkets and other leading retailers, said Jacqui Hendriks, research director at analyst firm GartnerG2.
The technology, which allows customers to remain in control of the whole purchasing process, will be widespread in as little as two years, she said.
"By 2005, most [large retailers] will be using self-scanning technology of some sort to help customers and employees - whether at the checkout or with a mobile device," Hendriks said. "Mobile devices may be easier to implement in the short -term but self-scanning checkouts will suit certain retailers."
Hendriks said self-scanning checkouts can bring a number of benefits, but warned that they must be easy to use. "Self-scanning checkouts can help [shoppers] to beat queues and improve inventory if they are properly linked with back-end systems," she said. "But consumers need something that is very simple - something my grandmother could use."
For example, Hendriks said, retailer Argos' interactive in-store kiosks work well because the language is basic. "Small things like icons saying 'cancel' rather than 'back' make the kiosks easy to use," she said.
Linking tills to back-office systems will be he major IT challenge facing retailers that want to implement self-scanning checkouts, said Hendriks.
"This is where the real value lies, but it is a difficult process," she said. "It is up to the [IT] suppliers to help with integration but they do not always do it. Integration has to be high on the priority list when retailers are discussing self-scanning technology with suppliers."
Both Tesco and Marks & Spencer, which began trials of self-scanning tills at the end of last month, said the technology was about improving customer service by, for example, reducing queues.
However, self-scanning checkouts may not always be the best solution to long queues, said Hendriks.
"It's all well and good getting customers through quickly but this is not necessarily a good thing," she said. "Will it stop people buying other goods that they might have bought while they were waiting for the queue to go down?" Similarly, retailers have to question whether the type of customers who will use the self-scanning checkouts will provide an adequate return on investment, Hendriks said. "Is this just a gimmick that is only going to favour those customers which do not spend much?" she said.
A valuable customer, such as a mother with a trolley-load of goods and two children, is not going to want to scan and pack her own shopping, she pointed out.
Nevertheless, there will be undoubted benefits from using self-scanning technology, both now and in the future, Hendriks said.
"It could be a solution for those consumers that have not got much time to do shopping and get frustrated with any sort of delay. And in the future, when radio frequency technology is more widespread, it will allow all of the products to be scanned in one go."
Self-scanning checkouts could aslo be used in more sophisticated ways, Hendriks said. "It would be good if the tills, using loyalty card information, could store a single customer record so, for example, you could return goods to any store without the need for a receipt," she said. "There is also the potential here for more personalised marketing."
NCR, which supplied self-service checkouts to both Tesco and Marks & Spencer, said shoppers in the US are choosing stores that offer the technology over those that do not.
However, Hendriks said, self-scanning checkouts are unlikely to be a differentiator in the long term, as most large retailers will adopt the technology in some form.
"Companies will be adapting it in their own particular way," she said. "For example, it would work well for books and music stores if it was combined with product information."
As with any retail technology, self-scanning checkouts will evolve and improve as retailers learn more about how customers take to them, Hendriks said.