Beyond traditional checkouts: the evolution of scan and go technology in retail
In the fast-paced realm of retail, time is a currency retailers can't afford to squander. According to Forbes (2022), 60% of shoppers find themselves irritated as they endure long checkout lines, and 57% deem long hold times a profound disappointment. Another survey by Capgemini (2020) found that 60% of shoppers consider long payment checkout lines their biggest in-store shopping hassle.
Well, we do not need numbers to express the simple fact that no one likes to wait! But here's the kicker: the ramifications extend far beyond mere irritation, as they delve deep into the heart of retailers' balance sheets. Yes, that's right—retail businesses report losing a staggering 75% of customers solely due to prolonged wait times, and in the world of commerce, that translates into revenue walking directly out the door. Did you know long queues in retail stores are causing a staggering $38 billion in lost sales? (2018)
Now that’s a lot of missed revenue. To combat such losses and keep customer satisfaction a top priority, it is imperative for retailers to adopt scan and go technology.
What is scan and go technology?
Scan and go or mobile self checkout is a solution that allows customers to skip checkout lines, scan and add products to cart on their own, and pay via their chosen mode of payment—all from their own mobile phones.
It is a great way to address abandoned carts, especially during rush hour, holidays, and the festive season. Saving customers from long wait times will keep them coming back to you again and again.
Why scan and go?
The reasons are obvious and plenty for why your store needs a scan and go solution. Here are some:
- Higher footfall, as customers prefer stores with scan and go than the ones without them
- Lower rates of cart abandonment during rush hours or seasonal sales
- Saves your retail space for more merchandise and displays, increasing the return per square foot
- Frees up your store staff for more productive activities
- Increases opportunities for customized loyalty programs
- Helps you capture customer data more efficiently and offer personalized experiences
- Helps you stand out from the competition
Evolution of self checkout technology in the retail landscape
The foundation stone
Interestingly, the foundation of self checkouts can be traced back to the invention of bar codes. Initially, barcodes were based on morse codes that had vertically extended lines, which later evolved to the bull’s eye shape. The variations continued, leading to their first adoption in retail. In 1974, Marsh Supermart in Ohio scanned the first item marked with the Universal Product Code (UPC) for checkout. The system reduced cashier costs by as much as 66%, according to an article in the Miami Herald (1988).
The primitive solutions
- The next big step in the revolution was in 1986, when a Kroger store in Georgia installed the first self checkout system. Although called “self-checkout”, it meant customers could only scan their items. They were still dependent on the central cashier for making the payment.
- In 1992, another local supermarket in Clifton Park, New York, was the first to have a self checkout machine, and within 2 years, customer participation increased to more than 20%.
Retailers saw a big opportunity in self-checkouts as a cost-cutting solution, especially during the recession in the early 2000s. However, their approach remained predominantly cost-centric and not consumer-centric, due to which there was a decline in the popularity of these solutions.
There were higher dependencies on store staff, customers struggled with the machines and payments, and retailers fretted over regular maintenance and supervision.
- A 2003 Nielsen survey found that 52% of shoppers considered self checkout lanes to be “okay,” while 16% said they were “frustrating.”
- In one report from 2013, customers expressed frustration with the amount of work required to check out.
- In a 2013 survey, one in three shoppers reported abandoning their cart and walking out of the store because of a bad experience with the system.
- Over 40% of respondents cited technical glitches as the most annoying aspect of self-service tills.
As a result, by 2011, many grocery chains like Costco, Albertsons, Ikea, and Big Y started pulling out their early self checkout solutions.
However, Walmart had been experimenting with refining the technology and piloted a mobile self checkout app in 2012. Walmart’s self-checkout solution brought complete autonomy to the self-checkout process, as customers could checkout from their mobiles. Customers no longer needed a handheld barcode scanner to pay, conventional checkouts, or to use self checkout kiosks.
In 2013, Walmart tested this advanced development of scan and go in 200 stores. With this, Walmart made a leap and anticipated saving about $12 million for every 1 second in average transaction time in the US.
This was a landmark in the evolution of self checkout solutions. Despite the challenges, more and more retailers came forward with better and more popular versions of self checkout solutions.
By the end of 2016, Amazon launched Amazon Go, which opened to only employees, and after a year, in January 2018, it opened to the public. By 2020, it opened Amazon Go Grocery in Seattle as a larger variant.
In 2018, Kroger also brought back self checkouts, this time the mobile version—Scan, Grab, Go. The supermarket and multi-department store retail giant then adopted the technology in 400 stores throughout the United States.
By that point, scan and go had become a global trend, and around the same time,
- 7-Eleven became the first retailer to adopt scan and go technology in Canada.
- Coop DK, Denmark’s largest grocery retailer, launched its Scan and Pay application in 2016.
- European convenience store, Valora, introduced a small-format store (Valora Avec) that removed their conventional checkout space and operated entirely with mobile self checkout in 2019.
- In 2019, Decathlon launched it’s own innovative scan and go solution across all its stores in the Netherlands, starting with stores in Rotterdam and Eindhoven.
Scan and go; as we know it today
Decathlon is often regarded as the pioneer of scan and go technology as we recognize it today. Customers use their smartphones to simply scan and pay for items, automatically disabling the RFID security tag, and exit the store without any queue or waiting at the checkout.
Then came the pandemic, and it became more of a necessity than an edge for retailers to keep up with. There was a surge in contactless payments and the growing use of mobile payment services, like various OEM pay platforms.
Even though challenges with scan and go continued, its popularity grew. Today, advanced forms of mobile self checkout solutions have been developed for mobile Android and iOS and as web applications for mobile browsers. Scan and go is now recognized as essential for streamlining and enhancing in-store experiences.
Potential of scan and go technology market
Let’s step out of the history pages and take a leap into the future of scan and go in the retail landscape to see what the market looks like.
Key market stats for retailers considering scan and go self-checkout in their stores
- The market size for global self-checkout systems is expected to expand at a CAGR of 16.2% from 2022 to 2030, reaching USD 13.98 billion by 2030 (Fortune Business Insights, 2022).
- The value of transactions processed by frictionless smart-checkout technology will reach up to USD 387 billion by 2025 (Juniper Research, 2020).
- The number of stores offering scan and go checkout solutions grew by nearly a quarter globally, totaling 57,000+ stores in 2022, and is expected to triple by 2028 (RBR London Press Release, 2023).
- North America holds the highest market share and Asia-Pacific is the fastest growing market for scan and go self checkout solutions (Datam Intelligence, 2023).
Key data insights on customer preferences for scan and go self-checkouts
- A survey conducted in the US during the pandemic revealed that 76% of scan-and-go users started utilizing the offering because of the pandemic, and 79% of respondents planned to continue using scan and go once the pandemic ended (Anyline Survey, 2022).
- In 2022, 29.4% of transactions at food retailers were processed through self checkout (Food Industry Association, 2022).
- 60% of consumers prefer self-checkouts over store associates, and 85% believe strongly that self checkouts are typically faster than waiting in line (State of self checkouts by Raydiant, 2021).
- 73% of people believe that the scan and go self checkout payment solution is more convenient and comfortable on smartphones (State of self checkouts by Raydiant, 2021).
Retailers embracing scan and go self checkout solutions
The numbers above paint a very promising picture. No wonder all leading retailers have plunged into the opportunity and built great success stories around the use of scan and go self checkout solutions in their stores across the globe.
Here are a few examples of such retailers across categories and geographies:
As we have seen earlier, supermarkets and department stores have been the pioneers in offering self checkouts, and the trend continues even today.
This German multinational supermarket chain operates over 10,000 stores in 20 countries. Aldi opened its first checkout-free supermarket in 2022. Customers need to download the Aldi Shop&Go app, and are automatically charged for their purchases once they leave the store. A revised version also made provision for customers to buy alcohol using facial-age estimation technology. Customer’s faces are scanned to check whether they appear to be over the age of 25, and only then can they buy alcohol.
Tesco launched Scan Pay Go, initially for staff on mobiles, then extended it to the public. In 2016, Tesco launched handheld scanning devices in 35 of its stores. In 2021, Tesco launched its first checkout-free store in Central London. This format of stores, known as GetGo, uses a combination of cameras and weight sensors to establish what customers have picked and charge them for products directly through the app when they leave the shop.
By implementing the technology, Tesco not only elevated shoppers’ experiences but also gained more customer data. It helps them capture what a customer buys or how they shop and use these insights to create personalized shopping experiences. As reported by BBC News, Tesco’s revenue jumped by 5.9% to £30.4 billion for the six months to August compared with the same period last year.
Sainsbury's, the second largest chain of supermarkets in the United Kingdom, tested a similar app in 2017. Sainsbury’s stores in Central London, Manchester, and Birmingham were experiencing high lunchtime queues. It was estimated that if they could cut out customers’s visits to the checkout lanes, their time to pay and leave stores could be reduced by half. Hence, Sainsbury’s launched stores that allowed customers to scan the purchased items, pay for them on their smartphones, and bag them straightaway. Sainsbury’s SmartShop app, launched in 2018, lets customers scan the contents of their trolley as they browse the aisles and combine item-scanning and payment functionality in a single mobile app.
The Party People
The Party People is a great example of a much smaller family-run retailer with two stores and an annual turnover in the single-digit millions that implemented a scan and go self checkout solution. This Australian retailer experienced long queues during Halloween, causing customers to abandon products and leave. That’s when The Party People launched its scan and go app at its Halloween-themed pop-up at Sydney’s Paddy’s Markets in Haymarket 2018. The customers needed to download the app called Tilly, and enter their card details. After this, they can scan items on their smartphones and do self checkouts, without queuing up or the need for a salesperson.
Despite having a high number of SKUs, the app was integrated with the company’s inventory system in less than two weeks and at a relatively low cost, encouraging the owners to roll out the feature in all upcoming stores. The Party People saw a significant increase in customer satisfaction after implementing scan and go.
Fashion & lifestyle brands
Many fashion brands have also adopted scan and go technologies in their stores. Here are a few examples:
This French sporting goods retailer is one of the most popular brands recognized for its self checkout solutions at its stores. To combat the frustration faced by customers at long checkout queues, Decathlon launched its Scan and Pay app. Using a combination of RFID tags and mobile payments, it enables its customers to self checkout at kiosks without scanning bar codes. The RFID automatically detects the product in the basket, and customers can conveniently pay and leave the store. With its self checkout solution, Decathlon enabled 50% faster check-outs and increased store efficiency by 15%.
Myntra’s Roadster launched its second offline store in Malleshwaram, Bangalore, in 2018. Along with many other retail tech innovations, this store enabled checkout times as short as 30 seconds for its customers. The RFID enabled store allowed customers to pick up any product and keep it in RFID trays. These trays captured product details and displayed prices on the screen. The customers can pay and self checkout, without the hassle of individual product scanning or removing security tags.
Apart from the above, here are a few other examples of brands offering self checkouts:
- Virgin Megastore (electronics megastore in Dubai)
- MediaMarktSaturn (electronics retailer in Hamburg, Germany)
- Sunbee (retail chain in Chennai, India)
- HyperCity (supermarket chain in Hyderabad, India)
- 7-Eleven (global convenience store)
- Ikea (global furniture retailer)
- Dick’s sporting goods (American chain of sporting goods)
- Dollar General (variety store—world’s largest dollar store)
Customer convenience and time are priorities for brands across all categories and regions, and that is clearly visible from the rapid adoption of scan and go technology in retail stores. Not having one in your store can stunt your growth. Why would someone want to stay in long lines and wait when they can conveniently checkout in seconds at the next store?
Fynd Store OS pioneers the launch of scan & go (Fynd & Go) in India
Since it’s clear that scan and go is the retail need of the hour, we’re excited to announce Fynd & Go, our very own mobile self checkout solution.
With Fynd & Go, we're bringing you the future of retail and delighting your customers with a seamless, efficient, and enjoyable checkout process. With such convenient in-store experiences, your customers will keep coming back, building brand loyalty and repeat purchases. And that's not all; Fynd & Go slashes staff working hours, boosts sales, and even captures crucial data on orders and customer preferences.
But that's just the tip of the iceberg. In Part 2 of this blog series, we'll dive deep into the features and benefits that make Fynd & Go a game-changer. You won't want to miss it, so stay tuned!
Interested in scan & go for your retail stores? Talk to experts