Grocery hasn’t embraced tech yet, at least not successfully

Grocery

By Mark Satov
Founder and leader, SATOV Consultants

If you were in business school with me in the 90’s you would have believed (many did) that PeaPod and others like it were going to revolutionize the grocery experience.  Then with the explosion of e-commerce and the millennials, it was going to happen any day.  Still waiting….

Uber recently announced a partnership with Loblaw. I am predicting it will work about as well as most other attempts to disrupt the grocery shopping experience.  Sure e-commerce will gain an increasing share of grocery spend but oranges won’t ever be sold like books or televisions.  Grocery is a category that people like to touch and feel, and the convenience of going there, getting what you need, and adding some impulse buys is still greater than that of navigating web sites, figuring out delivery and getting what you didn’t want.  In the case of the personal shopper model, the labour will kill the margins, which aren’t plentiful in grocery as we all know.

Now that you know where I stand in general on technology in grocery, I thought I would share some views on another attempt at modernizing grocery – the self checkout.

I recently had to run out to Loblaw to grab a few things.  I was able to get what I wanted in about 7 minutes.  Phew…I would be able to be back at home in time to catch up on American Idol before bed.

Then I got to the checkout line.  Who are all these people and why are they in front of me in line?  How is it that the store is so empty but the checkout line so long?  I looked over and saw that the self-checkout line was free, so I figured I would try that out.  I had about 6 or 8 items, how long could that take?  And besides, it was worth the risk with J-Lo waiting.

I walked up to one of the four self-checkout consoles and tapped the screen to start.  The instructions were kind of vague, and the machine was telling me to take the last item from the bag.  Hmm… must still be on the last customer.  It took some time to reset the machine and then to get most items scanned given that each item has a barcode in a different place.

By the time I was ready to pay I was frustrated.  The machine had trouble with the fact that I didn’t want bags and eventually asked me to choose my payment mechanism.  My card was refused twice so I (now getting right crotchety, as I am wont to be) looked over at the young clerks assigned to the self-checkout.  Their screen tracks the status of each checkout, so she knew I was at the payment part of the process. “YOU HAVE TO CHOOSE DEBIT OR CREDIT!”  “Oh great, I thought, when you are out of high school you can get a job at Air Canada.  But wait a second – aren’t you here to help?’ I tell her that I have done that twice and she recognizes that I am ready to throw my orange at her, so she comes by to see what is happening.  “We don’t take Amex”.   I finally pay and look over at the regular check-out lines, they’re now all clear.

In our third issue of The Way Forward, we alluded to the success of the self-check-in at the airport and the relative failure of the self-checkout at grocers. My experience at Loblaw gave me some more detailed insight into why self-checkout as it is today will never take off.

  1. The technology doesn’t work. If I were a professional cashier, I would know where the barcode is on each item and I would fly through the items in a snap.   But it is not intuitive, the machines are fussy, the instructions aren’t clear and the process takes too long, which leads to the next issue.
  2. The cost benefit for the consumer isn’t there. If I had struggled a bit and still finished ahead of the others in line, I would have felt smart, “I am so independent and efficient”, but instead I struggled with it, my expectations were dashed, and I felt like an idiot.  And I had to work for it.  Contrast that to the airline check in process, where I do it online at home in about 3 minutes (even the first time was pretty intuitive) and look at the check in line at the airport with the most smug and self-satisfied look you could imagine.
  3. The cost benefit for the retailer isn’t there. They have two cashiers for four podiums to provide ‘help’. Maybe at times that goes down to one.  But, I bet that it took me at least twice as long to get through the process as my friends who are over being cashed out with a human.  More importantly, what am I doing while waiting for my items to be scanned? Buying gum, chocolate bars, perhaps the odd absurd magazine about celebrities who are sleeping with aliens, and generally spending money I shouldn’t.  Compare this again to the airline industry where the time and space savings of getting consumers to check in at home or at the airport is tremendous, and they aren’t upselling in the line, so there is no opportunity cost.
  4. Lastly, you may have guessed that I wasn’t thrilled with the help I received. One could argue that this is a fixable problem.  Did you ever notice that the airlines seem to find 2 or 3 of the nicest attendants to hover around the self-check in machines at the airport?  That isn’t easy by the way, since they generally only have 2 or 3 nice attendants in total.  But they do that because that want people to have a great experience while using a technology they want people to adopt.  Positive human interactions make people want to do things again.

Most grocers, it seems, are abandoning the technology I tried to employ during this experience.  Eventually grocers will figure out how to take cost out of the process while improving the experience.   We just aren’t there yet, not nearly.

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www.satovconsultants.com