HEB, Walmart, Kroger keep testing self-checkout technology

On the way in, they grab a handheld scanner and grocery bags and scan a QR code on their cart or basket. Then, as they shop, they scan the items as they are selected and packed.

When they’re done, they go to the “Fast Scan” checkout area, scan another code, and place their cart or basket on a scale. If the weight matches the scanned items, they pay at a register and leave.

The scan-as-you-go checkout system is part of a limited pilot program, HEB said. If proven effective and accepted by customers, it could expand the technology-enabled options consumers have to make their shopping trips more efficient.

“At HEB, we continue to evaluate and use innovative technologies in all areas of our business,” said a spokesman.

The San Antonio-based grocer isn’t the only one using technology to streamline shopping. In addition to HEB, a number of others — Walmart, Kroger, Albertsons, ShopRite, Amazon, Costco, and Hy-Vee, to name a few — are experimenting with self-checkout systems.

But it’s about more than customer friendliness. Retailers are looking for ways to reduce labor costs and increase razor-thin margins.

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“This is essentially a 100 percent labor elimination tool,” said Steve Rowen, an Austin-based managing partner at Retail Systems Research.

At the same time, offering faster options for busy shoppers who are in a hurry and like to skip long checkout lines can boost a retailer’s competitiveness.

“When I’m a time-poor mom or dad and I’m doing my weekly grocery shopping, I want to be a consumer on and off as soon as possible to streamline that experience,” said Rob Weisberg, senior vice president of Incentives and Loyalty at Inmar Intelligence, a retail analytics firm based in Winston-Salem, NC

cracking the code

Many retailers have replaced at least some cashier-based checkouts with stations where customers scan and bag their own items, then follow the on-screen prompts to check out. In recent years, many mobile apps have evolved to handle both scanning and payment.

Walmart and Kroger tested stores that only use self-checkout. In 2020, Kroger began rolling out Eversen’s artificial intelligence across its stores to reduce customer error at self-checkout.

Kroger is also dabbling in belt self-checkout lanes, where items scanned by customers are transported down a conveyor belt to a packing area. In 2013, HEB tested a 360-degree scanner that automatically registered the barcode on each item as it moved across a conveyor.

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Amazon’s Just Walk Out system tracks which items buyers pick up and charges for them when they leave the store. The company also offers smart carts that allow customers to check out without having to wait in line.

But few such changes have been introduced in every chain store.

“No one has cracked the code yet,” Weisberg said. “The highway is littered with failed attempts to do this successfully.”

Several concerns and challenges – including theft, system failures, and the high cost of implementing new technology – have kept retailers from expanding various options to more stores. East Coast supermarket chain Wegmans shut down its self-checkout app last fall, citing losses.

And when technology doesn’t work as advertised – such as B. Handheld devices that don’t scan properly – or is too complex, consumer frustration can jeopardize brand loyalty.

“Polarizing Theme”

“Automation is a polarizing topic among consumers,” said Carol Spieckerman, president of retail consulting firm Spieckerman Retail, based in Bentonville, Ark. Others are concerned that automation will replace employees or complain about a lack of service.”

Neil Saunders, managing director of retail at London-based data analysis and consulting firm GlobalData, said shoppers don’t typically want to unload, scan and bag their items themselves.

“This is time-consuming, subject to error – requiring human intervention – and difficult for groceries where many items are purchased,” he said.

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Moving to Austin from the Boston area, Rowen recalled a system of handheld scanners that Northeastern grocery chain Stop & Shop had tested in their stores. It didn’t seem popular, he said.

“People are in a hurry and want to get in and out, but only if technology makes it easier,” Rowen said. “It has to be easier to use than to ignore.”

For many grocers, the cost of scanners, cameras, sensors and other technological components is prohibitive.

Despite their challenges, it seems likely that self-checkouts will remain a staple for many grocers. The proportion of self-checkout transactions at grocery stores rose to 30 percent in 2021, nearly doubling from 2008, according to a report by the Food Industry Association.

Retailers rushed to add scan-and-go technology in the first year of the COVID-19 pandemic, but that “has since leveled off,” the association said.

More than 20 percent use mobile checkout systems, and more than a third plan to do so. These options are supported by credit or debit cards, which is expensive for retailers due to high interbank fees, the report said.

Some industries have made self-service stations more appealing than interacting with employees, Weisberg said. For example, many people would rather use an app or ATM to cash a check and an airport kiosk for flight information than wait in line to speak to a counter or agent.

Despite the difficulties for retailers, “it is clear that the industry as a whole is moving in this direction,” Weisberg said.

The plans of HE-B

It’s unclear how long HE-B’s pilot program in Schertz will last and whether it will be expanded to other stores in the chain. The company declined an interview.

“HEB wisely takes a test-and-learn approach to integrating automated solutions,” said Spieckerman, the retail consultant. “While it’s much easier for retailers to decide on one solution and move on, retail today is all about choice. Buyers want options and HEB is clearly trying to build them.”

The company, which has more than 420 stores in Texas and Mexico, has invested and optimized its technology over the years.

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HEB introduced curbside pickup in 2015 and has since rolled out the service in many of its stores. It has worked with Swisslog Logistics to set up automated micro-fulfillment centers at its facilities and reserved more space at its stores for curbside order preparation and storage. The company bought Austin-based Favor Delivery in 2018 and has expanded that option as well.

The company is testing HEB Go, a mobile self-checkout app, in several stores. It can be used at more than a dozen HEB stores in the San Antonio, Austin, and College Station areas, a map in the app shows.

In 2019, the company announced that it was working with Udelv, an autonomous delivery startup, to test self-driving delivery trucks on the streets around its Olmos Park store. It has not shared any information about the status of this experiment.

Among its payment attempts, HEB scrapped a mobile wallet pilot in 2017 that allowed customers to enter debit or credit card information into the company’s app and pay at checkout by scanning a barcode with their phone.

And to the frustration of some customers, they can’t use Apple Pay at HEB. A recent TikTok video of a woman in an HEB uniform dancing and holding stacks of coupons under the words “If we had a dollar every time someone asks why we don’t have Apple Pay” has hundreds of thousands of views and frustration Comments spawned customers.

Retail analysts describe HEB as an innovative company that experiments and carefully chooses the technology it spends its money on. In a highly competitive industry, it needs to stay on its toes.

“HEB is keeping pace on the technology front but needs to keep going, especially as Texas continues to serve as a proving ground for competitors, including Amazon,” Spieckerman said. “It makes sense that HEB would be very vigilant initially when testing different technologies, especially more customer-centric ones. Once the bugs are fixed, HEB can continue to expand its convenience arsenal.”

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