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Insights

Optimizing the Retail Checkout Journey with Technology 

May 4, 2023

The journey consumers take when checking out at retail stores has changed. “Paper or plastic?” has given way to “How many bags did you bring?”. “Cash or credit?” has been replaced by the option to swipe, insert, or tap. “Would you like a receipt?” has morphed into options to receive a paper or email receipt.

Technology underpins many of the changes and is important to the customer experience. Technology can make checkouts fast and smooth or can cause frustrations. It also gives consumers options, such as self-checkout versus staffed checkout.

When selecting checkout technology, retailers need to understand and be mindful of potential impacts on customers. Technology should be selected that will minimize consumer pain points and respect their preferences. How to do that is not always obvious. There may be trade-offs to make. Hearing directly from consumers is critical to be able to prioritize the elements of the checkout journey that are most important to them. Getting the experience right, with the right technology, can optimize the customer journey and enhance customer loyalty.

Consumer Pain Points During Retail Checkout

Pain points in the checkout experience can relate to policies, processes, technology, and other factors. Big Village surveyed consumers about a range of pain points, as shown below.

Paying for shopping bags was cited as a dealbreaker or major frustration by more consumers than any other checkout pain point we surveyed them about. A direct hit to the wallet makes the impact of these fees more tangible than other pain points. However, retailers have no control over bag fees in locales where they are mandated. According to the Retail Industry Leaders Association, seven states and numerous local governments have bag fee legislation or ordinances in place.i

Some pain points relate directly to consumers’ interactions with technology. A significant fraction of consumers frustrated by poor touchscreen responsiveness and hard-to-use technology. Consumers’ expectations of checkout technology are shaped by interactions with all kinds of technology. They expect touchscreens to work as well as their phones and to have an intuitive user interface. Retailers must consider these factors when selecting technology.

Consumers’ time is precious. Time spent waiting – and to a lesser extent time to check out – are important frustrations. Many things can impact wait times, including technology. Checkout technology that is slow – or not working at all – is a drain on consumers’ time. It is imperative that retailers select technology that is fast and reliable.

Fewer consumers are frustrated with extra time due to employee training, which they understand to be a necessity. Thus, technology that is easy to learn is less important to the customer experience but is still desirable to minimize the cost of training.

Among all the time-related pain points we asked about, directionally more Millennials express frustration than both younger and older generations. This is likely because Millennials, aged 27-42, are currently in a busy life stage, building careers and raising families.

Consumer Preferences During Retail Checkout

Consumers have preferences that impact their experience. Going beyond minimizing consumer pain points, technology should align with those preferences. Optimizing the checkout journey can be a challenge since not everyone has the same preferences. In particular, technology preferences differ by generation. This means there is value in offering consumers choices. On the other hand, reducing the choices consumers have to make streamlines the journey. Additionally, if offering choices requires an investment, retailers targeting a narrow demographic may realize less value from the investment. How these nuances play off each other for any specific retailer can be understood via customer experience research.

One area where preferences vary is self-checkout. Consumers generally prefer self-checkout, but that preference is stronger among Gen Zs and Millennials than older generations. In fact, more Baby Boomers prefer checking out with a cashier than self-checkout. Across generations a significant fraction has no preference. This gives retailers some flexibility and allows them to minimize staff costs by moving toward self-checkout.

Consumers in all generations prefer paper receipts over email receipts, but less so among younger generations. Many Millennials and Gen Xers want an email receipt or both a paper and email receipt, while more Gen Zs than others don’t want a receipt at all. Clearly there is more comfort with technology among younger people, but life stage may also play a role. Gen Zs might not yet be saving receipts to use in personal budgeting or tax preparation. Or it may be that their trust in technology is high enough that they don’t feel the need for a virtual or physical paper trail. Moving away from paper receipts will save retailers the cost of printers and paper, but consumers are not yet ready to give up paper entirely.

Privacy Data Security Concerns

Data protection is a critical consideration for retailers that interact with consumers via technology, if they collect any personally identifiable information. Consumers have become used to sharing personal data, so few say the privacy and data security concerns we asked about worry them a lot. However, a significant number are at least a little bit worried.

Video surveillance will be increasingly analyzed with artificial intelligence (AI).ii The growth of retail video surveillance and its ties to AI are opaque to consumers. Although data breaches have become so common, they do not necessarily mean a major loss of reputation, the potential ill effects of AI that are in the news could change the game.iii Regardless of reputational risks, retailers have a responsibility to handle customer data with care.

Conclusion

Technology matters to the customer experience. To ensure the checkout journey is smooth, quick, and meets consumer expectations, retailers should select technology that is easy, fast, and reliable. It should also offer options tailored to consumer preferences and protect customer data. Customer journey research allows us to know which aspects of technology are most important to consider when selecting technology or designing other aspects of the journey to optimize the experience and drive customer loyalty.

 

Methodology

The data presented are from a CARAVAN conducted by Big Village Insights among a demographically representative U.S. sample of 1,010 adults, 18 years of age and older. The survey was live from April 28th – April 30th, 2023.

 

Written by Ashley James, Vice President at Big Village.

 

[i] https://www.rila.org/retail-compliance-center/consumer-bag-legislation, accessed May 2, 2023

[ii] https://www.securityinfowatch.com/home/article/21291956/security-trends-to-watch-for-in-2023, accessed May 2, 2023

[iii] https://www.nytimes.com/2023/05/01/technology/ai-google-chatbot-engineer-quits-hinton.html, accessed May 2, 2023