How Self-Checkout Can Impact Retail Shrink White Paper

Self-checkout has been widely adopted by both retailers and consumers around the world. Each week millions of consumers choose self-checkout to make shopping easier and more convenient.

Four well-known retail market analysts have indicated that self-checkout is not only increasing, but projected to experience double-digit growth over the next four years, with the most significant change occurring in North America. Retail Banking Research (RBR) reported 40% growth in North America in 2010 alone.

Self-checkout adoption has risen due to its proven ability to improve customer service, reduce queues by up to 40%, increase throughput up to 20%, and boost labor productivity. But, does self-checkout have an impact on shrink rates?

Understanding retail shrink

Shrink tends to spike during periods of economic downturn. In 2009, there was an increase in shrink likely due to prevailing poor economic conditions. The Global Retail Theft Barometer reported that shrink declined 5.6% in 2010 on a global basis (6.8% in the United States), totaling $107.3 billion in 2010. The decline is attributed to improvements in the global economy.

Retailer feedback shows that self-checkout has a neutral or slightly positive impact on shrink and does not contribute to shoplifting. Recently, a spokesperson for Big Y Foods, a U.S. supermarket chain, publicly acknowledged no decline in shrink after removing self-checkout from their stores.

A European retail industry study conducted by Efficient Customer Response (ECR) in 2011 supported that self-checkout has not increased the level of shrinkage in the retail industry. ECR examined 66 high-risk security stores