If I hear "Unexpected item in bagging area", "Please remove item from bagging area" or "Please wait for Associate assistance" one more time, I'll have to scream! It's time for brick and mortar stores to seriously re-engineer the self-service checkout experience to reduce friction and better compete with the ease of on-line purchases. As new technology emerges, brick and mortar retailers will have a fantastic opportunity to turn a transactional event into a relationship building touch-point.

I'm at a big box hardware store and the banes of my existence at this moment are 6 inch 5/16th lag bolts. After crossing 9 aisles and finally finding my bolts, they have the little plastic bags for my purchase, but no pens. Wait…I have a camera phone so I take a picture of the SKU number and confidently stride over to the self-checkout. Excellent, no line. Yes, I want to start. Yes, in English please. "Please scan first item", but wait, I can't scan my first item…no bar code! Unlike the grocery store, no option exists to enter a SKU number. So I have to wait for an associate to override the system, enter a password, enter the SKU on the touchscreen, and then return control to me so that I can pay…grrr!

Retail has been working on the "checkout" issue for decades; the checkout process is one of the largest operational costs for low margin retail operations and cited as *one of the biggest frustrations for the consumer. The fundamental flaw in shopping is re-work and motion waste, and the optimal process is to scan the item at the time of selection by the consumer; however, it isn't practical for each customer to have an individually assigned checkout associate walking around the store with them…or is it?

About 15 years ago, while working at one of the world's largest Consumer Packaged Goods companies, we did a pilot in Denmark where shoppers would pick up a scanning gun upon entering the store. The shopper could scan items before putting them in their cart, dock the gun into a pay station at the end of the shopping trip, and off they go! This process reduced checkout time by 69%, and survey data showed an 82 % increase in shopper satisfaction.

The grocery sector has been the leader in the check-out improvement process, due to having large order sizes and razor thin margins; yet over a decade later we have very few retailers who have adopted self-scanning guns. Currently, retail's answer to improving the shopping experience has been to deploy more self-service checkouts. A survey conducted by Tensator in October of 2013, however, discovered these disturbing trends:

• 1-in-3 shoppers have walked out of a store without buying because of a bad experience with a self-service checkout.
• 84% of respondents admitted to needing staff assistance when using a self-service.
• Over 40% of respondents cited technical glitches as the most annoying aspect of self-service checkout.
• More than half of the shoppers questioned believed that the transaction time at self-service checkouts is actually slower than manned checkouts.

With the mobile revolutionwe have seen several retailers pilot mobile-based self-scanning apps, where you can use your phone instead of a dedicated hand-scanning gun to do your shopping. But trying to turn a mobile device into a self-scanning gun introduces several user experience (UX) and technical challenges:

1. Camera phone-based scanning isn't as quick or as efficient as laser-based hand scanners.
2. Users have to be connected to the in-store Wi-Fi to retrieve Point of Sale (POS) price data.
3. Users still have to use the existing self-checkout POS to pay for order.
4. Additionally, some mobile self-scanners like the Shoprite system, require the scanning of a loyalty card barcode to identify the shopper and link transactions to the POS device.

I don't want to have my mobile device turned into a mini, store-specific POS. Instead, I want to be able to walk into ANY store, snap some bar codes, and have the existing store POS read all my items' barcodes in seconds! Butwe still have a major technical hurdle: the vast majority of POS scanners are incompatible with mobile device displays, backlighting, polarizing filters, and scaling; all of which make getting the 1D barcode to scan impossible. If the American Retail sector isn't going to spend tens of billions of dollars to replace all the existing laser POS scanners with image scanners to be compatible with mobile displays, then how else can we leverage technology to bridge the technical divide?

My salvation is LEDs! LEDs (light-emitting diodes) are the future of connectivity! "How?", you ask? Every mobile device has LEDs – the camera flash, status LEDs, even infrared LEDs in the proximity sensor – so we have a zero cost technology just waiting to be used. But how does this help re-engineer retail?

Li-Fi, a visible light communication technology, allows data to be transmitted over light waves.A single color LED can transmit data at up to 1.6 Gbps. I know you're thinking "but…that's way in the future! "It really isn't. Li-Fi is being deployed across Europeand Philips (the light bulb manufacturer) has demonstrated an LED-based in-store lighting system that interacts with smartphones to provide location awareness, in store navigation, and targeted offers. The Philips Li-Fi system could actually scan your order in real time.


If you're thinking "but Li-Fi requires massive investment in store infrastructure, and therefore violates your desire to self-scan in any store," you're right, at least in terms of where Mobeam Inc. enters the picture. Mobeam has harnessed the infrared proximity LED on mobile devices, and allows you to scan a loyalty card barcode with your phone's camera. You can even receive digital coupons with bar codesand the software converts the bar codes into pulses of invisible light that can be read by conventional POS scanners. So the technology exists today to allow customers to self-scan items, place their phone face down on the scanner glass of the store's existing POS, and have 30-40 items processed in seconds! No change in store infrastructure; no need for the customer to sign into the store Wi-Fi; and it even ties into the scales at the self-checkout stations for fraud detection. For a completely frictionless user experience payment information could even be transmitted after the final item is sent to the POS via Li-Fi.
The emergence of this technology means two things for retailers:


1. A self-scanning solution for tech savvy customers that does not require major infrastructural changes and improves the checkout line experience.
2. An opportunity to reshape the checkout process from an event where associates spend 90% of the time on the transactional event into a relationship building experience where they spend 70% of the time focused on the customer.


Together, with re-imagined store designs, brick and mortars can leverage this technology to re-invent the shopping experience so that we no longer have "ugly" Points of Sale, but areas that follow the brand's image and tone that are conducive to building customer relationships.
If you're not getting the critical thinking and game-changing strategy from your current technology partner, give CapTech a call. Others talk, we listen.


* References

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Dube-Rioux, L., Schmitt, B., Leclerc, F. 1989. Consumers Reactions to Waiting: When Delays Affect the Perception of Service Quality. Advances in Consumer Research, 16, ed. Thomas K. Srull, ed. Provo, UT: Association for Consumer Research, 59-63.

Hkust, D. S., Hkust, R. Z. 2002. Waiting for service: Affective responses, satisfaction and decision-making of consumers waiting in queues. Advances in Consumer Research, V. 29, p 431-433.

Taylor, S. 1994. Waiting for service: The relationship between delays and evaluations of service. Journal of Marketing, 58 (2), 56.69.

Tom, G. Lucey, S. 1995. Waiting time delays and customer satisfaction in supermarkets, Journal of Services Marketing, 9, (5), 20-9.