5 Tips to Prevent Shrinkage in the Age of Self-Checkout

As, you could probably tell from my last blog, I’m an advocate of self-service technologies. I’ve seen them have a dramatic effect with our retail customers in terms of improved sales, customer service and satisfaction, as well as increasing associate productivity. That is probably why personal shopping solutions (PSS) and self-checkout (SCO) systems are hitting their strides.

But, in my opinion, if such technologies are to be successful, stores need to embrace them fully.

 The retailers who are getting the most from their PSS and SCO systems create project groups involving HR teams, loss prevention, marketing and operations. I also cannot emphasise enough how important it is to also secure senior level sponsorship. Once the technology is seen as being genuinely supported by the business and valuable to associates, and that supporting PSS and SCO initiatives is a job reserved for only the best team members, key performance indicators (KPIs) can be achieved – or exceeded.

However, as I also noted in my last blog, you or someone in your project group may still be weighing the risks versus benefits of offering the shop-and-scan experience in your stores. On the one hand, PSS and SCO can move customers out the door faster, providing the frictionless experience they expect in the 'now economy’. On the other hand, you fear that speedy, self-managed checkout experience could lead to shrinkage – either from a customer accidentally or intentionally not scanning an item. But rest assured that, after 25 years of testing and refining PSS and SCO technologies, we’ve identified more than a few strategies to help minimise losses.

These are the five that I always recommend to retailers as a starting point:

1. Assess, then measure: Look at where PSS and/or SCO is the best fit for the business. Typically, they’re embraced by larger-trolley customers in busy stores or those using supermarkets where footfall is high. It’s important to put KPIs in place too. Quantifying things like the desired number of people using systems, basket sizes and customer satisfaction – and tracking these indices over time to introduce tweaks and improvements – will help ensure success.

1. Educate shoppers: I question some of the data in relation to shrinkage. I still believe that most people are fundamentally honest and may be making genuine mistakes in their shops. For example, not many people realise that, when it comes to multi-buy offers, all products in the offer need to be scanned into their baskets. It’s also all too easy to forget to scan fresh produce. These types of ‘failed scans’ – that I believe are more often than not honest mistakes – can count toward ‘theft’ in data. Some data will even count multiple scans of a single item, which operate in favour of the retailer, as shrinkage. For these reasons, I believe it can cause problems when retailers assume that, on the one hand, people will gravitate to SCOs and, on the other, they will use them faultlessly. Customers need education. This is easily done with hints and tips displayed on the scanning device, leaflets and poster drops in-store – and by training associates. I’d also advocate having days when ‘hit squads’ visit stores to promote the technology, to walk around with customers and literally talk them through how it works. It can also be hugely advantageous to have ‘ambassador associates’ as part of your day-to-day store teams to assist customers. In short, when it comes to SCOs, it’s time to educate to accumulate.

3. Integrate your loyalty scheme: The most successful PSS deployments tie in the use of a loyalty card. This requires a shopper to scan his or her loyalty card to enable the store device to start a cart and connect offers. This, along with the fact that the retailer will hold other information about the identity of the shopper – for example home address and debit or credit card details, acts as a subtle psychological ‘honesty agent,’ with shrinkage levels falling substantially.

4. Spot check / rescans: When first used, it can feel a little unnatural for customers to shop in a truly frictionless way using self-scanning devices and automated payments. As part of the process, all shoppers should be made aware that they will randomly have their bags checked by a dedicated station near the exit. The critical thing here is to let customers know that at some time it will happen – perhaps through in-store signage, alerts on self-scanning devices, notices on receipts and more. With clear communication in place, random rescans will soon become an expected and accepted part of the shopping experience. I would recommend that your most approachable associates with the best empathy skills manage such checking tasks, as they will be the best people to put customers at ease. You may also want to consider how technology can help. For example, when used in a SCO kiosk, bioptic scanners that have integrated cameras and artificial intelligence (AI) engines and can alert staff to suspicious scanning patterns or practices.

5. Be visible: This may sound obvious, but I have seen self-scanning devices tucked away in the strangest places. To encourage usage, we recommend that personal shopping devices are made easily accessible and placed close to the store entrance with clear signage such as ‘Speed through your shopping trip with these’. We’ve also seen retailers persuade shoppers to use devices for the first time through incentives such as money-off coupons – redeemable by the self-scanner – or free items such as hot drinks.

Now, these aren’t the only strategies. There are several other measures that you may want to take to build confidence in PSS and SCO technologies and ensure they truly benefit your business.

My recommendation is to consult with a retail technology solution provider who can help you assess your current operational model and resources, as well as your loss prevention strategies. Together, you can identify the best way to implement PSS and SCO within your environment.

If you want to speak with me or a Zebra retail specialist, you can leave a comment below or contact us here.

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Editor’s Note: Want to learn more about Zebra’s SCO and personal shopping technology, and the ready-to-go apps created for our devices by our partner community? Check out this resource page.