11 steps to a smarter front of store retail transformation

Published May 11, 2021

By Charles Cash, Ph.D., NCR Retail Transformation Practice

Enhancing customer experience while reducing the cost of store operations is a winning strategy for retailers looking to grow in a competitive marketplace. To achieve this, retailers are looking for the best ways to transform the front of store experience by giving customers more choice and convenience, helping retain them and attract new ones.   

A key first step in the store operations optimization and transformation process is to establish an objective assessment of current store operations and identify methods to deliver better customer services through changes in design, people, processes and technologies. In this article, we’ll outline 11 steps retailers should take to better leverage their self-checkout investment to improve the customer experience and employee productivity.

Step 1 – Start with the strategy


Start with the end in mind. What is your ultimate consumer experience strategy? Put work into reviewing your brand promise as it relates to a clear differentiated consumer experience that then informs your operational strategy. Having this clear strategy up front will save time, in the long run, and help govern decisions as you progress through the front of store transformation journey.

Step 2 - Establish a baseline


Use your store data and consumer surveys to baseline your front of store performance. Quantifying and developing a detailed understanding a store’s current “as is” experience will allow you to identify improvements you can make that may require small efforts but lead to big returns.

Baselining your “as is” checkout performance will help measure the impact of change (or future state) and guide you on how to continuously improve your checkout experience and productivity.

Step 3 - Find and reduce friction


For self-checkout, we recommend retailers assess the most common types of interventions and their root causes; interventions caused by weight-based security are the most common. This awareness may lead you to disable the weight scale or widen the range of weight tolerances to reduce interventions. And while this may be a good strategy to reduce interventions, it could increase shrink at checkout. So, if you choose this approach, you might want to consider additional shrink deterrent methods (see Step 7).

There are other ways to reduce customer friction at self-checkout, like implementing auto tendering to simplify the tendering process. This can reduce customer transaction time by up to 10 percent and eliminate the need for customers to touch the self-checkout display—an important health and safety benefit during the ongoing pandemic.

Also, having well-trained self-checkout associates nearby to respond to unavoidable interventions, like approving the purchase of a restricted item (e.g., alcohol), will cut down on customer friction. Remember, customers already know they can expect some self-checkout interventions. What causes the friction is when there’s an intervention—but no associates readily available to help.

Read more: Increase participation and accuracy at self-checkout via design improvements

Step 4 - Empower your associates as hosts


Empower your associates to provide a wonderful customer experience. There are two key aspects to this step:

1.     Establish well-defined HR roles and responsibilities for associates. For self-checkout (SCO), we suggest you define the role as a SCO host instead of the more commonly used industry term “RAP” attendant. “RAP” stands for remote assistance program, which implies that the associate will stand at a RAP device to monitor lanes and resolve interventions by pressing buttons on the RAP display. We don’t recommend you do this in your stores.

Here are a few ways to empower your SCO hosts:

  • Provide associates with self-checkout training and technical knowledge
  • Give your SCO hosts a uniform that differentiates them from customers
  • Encourage your hosts to interact with customers at SCO lanes
  • Provide adequate coverage, for example a minimum 1 SCO host per 8 SCO units
    • Relax requirements for first / last hour of a day, based on demand
    • Reduce ratio during “peak” times to provide better experience

 

2.     Give your SCO hosts the tools they need to deliver exceptional customer service. Providing your hosts with mobile devices to monitor and better assist the customer at your SCO lanes will create a more positive checkout experience.

Step 5 - Let customers skip checkout altogether


Consider implementing technologies (like handheld mobile scanners) that enable customers to scan items in-aisle so they don't have to go through checkout at all. There are different hardware form factors you can offer; for instance, you could take a flexible approach by enabling customers to download a mobile shopping app with mobile payment integration, perhaps as a feature to your loyalty program.

This method typically has a lower cost of entry and ongoing operations but lacks ability to monitor the basket; one alternative would be to implement a smart cart with a scanner. This adds costs but has the additional benefits of a built-in scale and camera that balance security while allowing easier, lower-contact shopping and faster checkout. Both mobile shopper approaches may require other store process changes but help reduce workload at checkout, reducing customer friction.

Implementing a mobile device so your SCO host can roam more freely in the self-checkout area and assist customers at lanes will help reduce friction, and:

  • Decrease intervention time
  • Increase customer satisfaction
  • Improve associate satisfaction
  • Increase throughput

Step 6 - Optimize your cash management processes


The goal? Ensuring each device has adequate cash to service customer needs while reducing the costs associated with removing and replenishing cash via staff, or third-party interactions.

This evaluation should include an analysis of cash demand from transaction cash payments and cash back on card payment transactions. The outcome should specify the initial loan per lane by denomination and the frequency and amount of labor required to remove and replenish cash.  

For self-checkout, the initial loan per lane by denomination is much greater than that of a cashier register and may require unscheduled replenishments, depending on your store’s cash management policies or its physical location in the self-checkout area. Also, we suggest retailers invest in the POS software integration to eliminate the cash back option on card readers for self-checkout lanes, accepting only card payments or when a lane is set to card-only mode due to low cash levels or it has a problem with cash recyclers.

Step 7 - Use technology to combat shrink


While there’s no silver bullet to mitigate shrink, good asset protection (AP) techniques use layered approaches. For self-checkout, SCO hosts are one of the first lines of prevention. They should be trained to closely monitor customer behaviors and assist those who appear to have problems entering items into the POS.

Other technology methods may include weight security systems or implementing live video feeds of customers performing transactions on additional displays at the lane or mounted from the ceiling over the SCO area. Some self-checkout providers have cameras in touchscreen bezel and software features to display the video on the SCO display, reducing the cost of additional monitors. Other, more sophisticated theft deterrent systems use computer vision and AI techniques to identify suspect behaviors and alert staff. These may use cameras mounted on self-checkout tri-light poles or a camera located in the scanner. 

Step 8 - Give your managers dashboard reporting


Develop a process to provide managers with timely access to a data dashboard containing key metrics to better monitor and manage checkout operations. You should determine the right set of metrics customized to your store front-end environment.

Common front-end metrics should include the following:

  • Productivity (transactions per lane per week, units per transactions, self-checkout percent of transactions, voids or cancelled transactions, etc.)
  • Availability (utilization, available time per day, etc.)
  • Interventions (counts by intervention type, percentages, response times, etc.)
  • Tender and cash usage (times by type, counts by type, lane loans, cash top-offs and pickups, etc.)
  • Lane system health (abnormal restarts, device errors, etc.)

Implementing a web-based metrics dashboard that’s regularly refreshed allows you to measure the impact of improvements and allow your stores to respond to corrective actions sooner.

Step 9 - Look at your store’s front-end layout


Design your store front-end to give customers easy access to checkout options while improving customer flow. The checkout design should include impulse merchandise at the entrance and inside the SCO area and space for a single queue during peak shopping times. Implement the best type of SCO layout based on your store space requirements, in either a channel layout or bullpen layout, as shown below.

Step 10 - Use managed services to simplify SCO maintenance


Select a managed service plan that allows store staff to maintain self-checkouts and other critical checkout technologies quickly and easily. This step seems obvious but, often, to save costs, retailers look to staff to either fix minor problems themselves or spend hours on a call with helpdesk resources. Given these options, an associate may decide to turn off the lane or allow it to operate in a degraded state for days until a supervisor has time to devote to the problem.

Selecting a low-cost service plan can be “penny wise but pound foolish.” It also sends the wrong message to staff that their time is not valuable while also negatively impacting the customer checkout experience. As part of this process, retailers should look for methods to automate the incident submission process and easily track repair status.

Step 11 – Build a business case for each step and focus on ROI


Create and evaluate a business case for each step and select the step(s) with the highest estimated ROI. Business case elements include consolidation of the design, people, process and technology changes, expected cost savings, throughput improvements, implementation effort and potential revenue impact of planned changes.

Alternatively, you can accomplish this step by making rough estimates of the difference between the impact (benefits) and effort (costs) and prioritize options based on highest to lowest difference and account for capex funding and scheduled deadlines.

In conclusion, a retailer can achieve a more efficient checkout with less friction by adapting the above 11 steps to their store environment and strategy. By taking a holistic approach including design, people, processes and technologies, a retail can deliver better customer checkout services at a lower cost.

Read more from NCR’s Retail Transformation Practice: Using self-service technologies as a competitive advantage in a post-pandemic retail environment.

 

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