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P19 technologys welcomed impact on labor cost 6.13.19

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Technology's Welcomed Impact on Labor Cost

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P19 technologys welcomed impact on labor cost 6.13.19

  1. 1. TECHNOLOGY’S WELCOMED IMPACT ON LABOR SAVINGS MIKE GIBLIN, LPC Director of Research, Loss Prevention Research Council LAURA LASKO Senior Corporate Investigator, Wakefern Food Corp.
  2. 2. OVERVIEW Although it has been in existence for 25+ years, retailers nationwide have increasingly expanded their use of Self- Checkout technology to improve Front End efficiency and enhance the customer experience. Contributing Factors: • Increased Minimum Wage • Decrease in Applicants for Available Positions • Desire to Mirror “Frictionless” Online Shopping Experience within Brick + Mortar Locations
  3. 3. CHALLENGES How to Effectively Reduce Front End Labor Costs without Sacrificing Customer Service / Efficiency at Checkout How to Adapt to Changing Customer Expectations Regarding Acceptable Checkout Times How to Keep Associates Engaged with Customers, While Maintaining a “Frictionless” Experience How to Drive Self-Checkout Utilization without Increasing a Retailer’s Exposure to Theft / Shrink
  4. 4. STUDY OUTLINE LPRC conducted a survey of 25 Retailers on Smart Checkout Offender Interview data & video on SCO and theft deterrents
  5. 5. SELF-CHECKOUT UTILIZATION
  6. 6. SELF-CHECKOUT UTILIZATION Retailers with SCO use it in 59% of their stores First SCO installed in: 2018 2012 2018 2009 2019 2008 2019 2011 2008 1992 2009 1997 2007
  7. 7. SELF-CHECKOUT UTILIZATION Average # SCO Lanes Installed per Store: 7.1 % of SCO Lanes vs. Traditional Lanes: 33% Average: SCO as 29% of ALL Transactions Goal Average: SCO as 40% of ALL Transactions
  8. 8. SELF-CHECKOUT UTILIZATION According to Survey Data: 33% of ALL Open Lanes are SCO Between 11:00a-7:00p • SCO Lanes are Typically First to Open + Last to Close 29% of ALL Transaction Activity Occurs at SCO During This Time Frame
  9. 9. LABOR SAVINGS POTENTIAL Average Cashier Rate / Hour: $12.00 Average Cashier Hours Per Week: 1150 Average Cashier Labor Cost Per Week: $13,800 Avg # of Total Transactions Processed / Week: 25,000
  10. 10. LABOR SAVINGS POTENTIAL Installation of (4) SCO Terminals • 15 Hours Per SCO Terminal Per Day Utilization [7a-10p] • 105 Hours Per SCO Terminal Per Week Available • 420 Hours Total Hours Available to Utilize New Potential Cashier Hours Per Week: 730 New Potential Cashier Labor Cost Per Week: $8760 [Note]: RAP Station Attendant Hours Must Be Added Back In]
  11. 11. SELF-CHECKOUT SHRINK AWARENESS
  12. 12. What is the approximate percentage change in shrink you've experienced per store as a result of utilizing self-checkout? +21.7%
  13. 13. To what extent do you believe that implementing Self Checkout in your stores has taught previously honest individuals how to shoplift? 0 36% 50% 0 14% 1- Not at All 2 3- Somewhat 4 5- Very Much
  14. 14. OFFENDERS’ PERCEPTION SCO THEFT EASE 38% 34% 20% 6% 2% Very Easy Somewhat Easy Neutral Somewhat Difficult Very Difficult n=50
  15. 15. Why Use Self- Checkout for Theft? Reason to Use SCO Frequency Less attention from employees 98% (n=49) Easier to get away with 68% (n=34) Closer to exit 56% (n=28) Less attention from other customers 48% (n=24) Neutralize guilt 34% (n=17) Harder to prosecute 16% (n=8) REASONS FOR CHOOSING SCO
  16. 16. SCO TERMINAL LAYOUT • Corral vs. Aisle Format • Staging of SCO Terminals Away from Exit Door • Placement of Attendant Podium at Back of SCO Area • Use of Public View Monitors or Integrated Video Feeds that May Deter Dishonest Behavior • Deployment of Appropriate CCTV Coverage
  17. 17. IMPORTANCE OF SCO ATTENDANT 84% of offenders admitted to using SCO to avoid employee oversight 62% said attentive SCO attendant would deter them from theft
  18. 18. EFFECTIVENESS OF ATTENDANT ACTIONS Level of Engagement out of 7 Come over and acknowledge customer’s transaction 5.48 Associates to check off receipts 4.88 Just be present and appear to be watching customers 4.44 Ask customer if assistance is needed 3.94
  19. 19. TRAINING SCO Attendants Should Be Familiar with ALL Front End Policies + Procedures. Knowing How to Look for + Respond to these Scenarios Aids in Reducing Shrink + Creates a Positive Customer Experience at Checkout. • Weight Mismatches / Scale Errors • Scale Security – “Skip Bagging” Feature • Use of Manual Override #s • How to Handle Walkouts [No Payment Received]
  20. 20. SCHEDULING Enough Self-Checkout Attendants Should Be Scheduled to Help Monitor the Area During Busier Hours. Attendants Should Avoid Standing at the Podium + Regularly Interact with Customers. Stores May Need to Adjust Their Front End Labor Projections After Initial SCO Deployment On Average, One SCO Attendant is Recommended per Every (6) SCO Terminals in Operation • Depending on Utilization + Time of Day • Customers Need to be Trained Too! [May Be Hesitant to Try It]
  21. 21. REPORTING Track Self-Checkout Utilization vs. Traditional Lanes • Transaction Counts • Tender Type • Average Basket [Item Count + Transaction Total] Track Store Shrink – Pre + Post SCO Installation Track Apprehension Activity / Walkouts at SCO Use of Exception Based Reporting to Monitor POS Activity
  22. 22. SHRINK AWARENESS SCO Attendants Must Be Trained to Identify Potential Misuse, Including: • Failure to Scan All Items • Incorrect PLU Entries • Improper Placement of Weighted Items on Scale • Coupon Misuse • Incomplete Payments • Attendant Mode [Turns Off Security]
  23. 23. NEXT STEPS
  24. 24. NEXT STEPS Evaluate Current Best Practices for SCO Utilization • Do They Cover All Facets of SCO Operations? Create Reporting to Help Confirm Self-Checkout Terminals are being Properly Utilized to Realize Labor Savings Monitor Shrink Data to Identify and React to Any Notable Increase
  25. 25. Overall, to what extent do you believe that Self Checkout has provided you benefit that outweighs the risks/negatives? 0 7% 43% 50% 0 1- Not at All 2 3- Somewhat 4 5- Very Much
  26. 26. Please rate your agreement with the following statement: Self Checkout is a critical aspect of my companies strategy for the future 0 0 14% 29% 57% 1- Not at All 2 3- Somewhat 4 5- Very Much
  27. 27. LPRC Innovate Discover. Develop. Deploy. Elite People Resources Solution Partners R&D Partners Faculty & Student Partners Elite Places Simulation Spaces Stores/DCs/Offices Intense Communities SMART CHECKOUT CENTER OF EXCELLENCE

Technology's Welcomed Impact on Labor Cost

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