Target Tests New Self-Checkout Policy to Improve Customer Experience

Estimated read time 3 min read

In an effort to enhance customer satisfaction and streamline the shopping experience, Target, one of the nation’s leading retailers, has recently implemented a new self-checkout policy. This move comes as retailers are beginning to recognize that the use of cashier-less technology may sometimes deter customers rather than attract them.

At select stores across the country, Target has made changes to its self-checkout process. Now, customers who are purchasing ten items or fewer are encouraged to use the self-checkout kiosks, while those with larger purchases are directed to full-service lanes staffed by cashiers.

Target’s motivation behind this initiative is to reduce wait times and gain a deeper understanding of customers’ preferences. John Mulligan, Target’s Chief Operating Officer, shared insights during a recent call with analysts, stating, “Our guests tell us they enjoy interacting with our team.” He also highlighted that the company has reevaluated its checkout areas, resulting in a remarkable 6% increase in customers using full-service cashier lanes across its stores.

Over the past few years, many retailers, including Target, have expanded their self-checkout offerings. This technology was initially embraced as a means to cut down on labor costs and expedite the checkout process for shoppers. However, the reality of self-checkout has not always lived up to its promise.

One common issue with self-checkout machines is their propensity to break down. Customers often encounter errors and glitches while scanning items, necessitating the intervention of employees. These setbacks not only nullify potential labor savings but also render self-checkout slower than traditional full-service checkout lanes, defeating the original purpose.

An executive at the Booths supermarket chain echoed these sentiments, telling the BBC, “Our customers have told us this over time — that the self-scan machines that we’ve got in our stores… can be slow, they can be unreliable [and] they’re obviously impersonal.” Booths recently decided to remove self-checkout from all but two of its 28 stores. Other major retail chains, such as Walmart, Costco, and Shoprite, have also reevaluated their self-checkout strategies.

Notably, retailers face a higher risk of lost revenue with self-checkout compared to full-service cashiers, stemming from both intentional shoplifting and unintentional errors by customers. A study spanning retailers in the United States, Britain, and other European countries revealed that companies with self-checkout lanes and apps experienced a loss rate of approximately 4%, which is more than double the industry average.

Target, however, has indicated that the adjustment in its self-checkout policy is not directly related to merchandise losses, known as “shrink.” Instead, the retailer has attributed these losses to theft, including petty shoplifting and organized criminal activities that involve stealing merchandise for resale online. In fact, more than 60% of shrinkage includes factors like employee theft, damaged products, administrative errors, vendor fraud, and others.

Michael Fiddelke, Target’s finance chief, emphasized the ongoing challenge of shrink, stating, “Shrink remains a significant financial headwind.”

Target’s move to test a new self-checkout policy reflects its commitment to delivering a more satisfying and efficient shopping experience for customers. While self-checkout technology has its advantages, it also poses challenges that need to be addressed. The retail giant’s decision to redirect customers with larger purchases to full-service lanes aims to enhance customer interactions and reduce checkout-related inconveniences. As the retail landscape continues to evolve, finding the right balance between automation and human interaction remains a crucial consideration for retailers.

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