Self checkout is everywhere. It has been adopted in multiple markets, including fashion retail. Only that instead of enhancing the shopping experience as it was destined to, self checkout has many issues and is not liked, sometimes even hated. Both customers and retailers need a better solution.
Enter Nexite. Its advanced in-store technology helps fashion brands create a better checkout experience: seamless, frictionless, contactless.
The Self Checkout Landscape
Self checkout is gradually becoming the norm in many stores, particularly in grocery chains such as Walmart and Publix and with retailers such as Target. The global self-checkout market is expected to grow from USD 3.87 billion in 2022 to 10.50 billion by 2030.
Retailers adopt self checkouts for reasons such as customer expectations for an omnichannel experience and labor cost reduction. Yet they are struggling with multiple issues, mainly anti-theft measures. Shoplifting means revenue losses, and retailers seek solutions for contactless shopping that do not create new security problems.
Consumer adoption of self-checkout solutions is strongly affected by e-commerce experiences. The trend accelerated dramatically during the COVID-19 pandemic. Now, these new behaviors shape customer expectations. We can say that consumers expect control, convenience and a frictionless journey. Self-service options, such as self checkout and returns, are supposed to offer exactly that. The problem is that self checkout as we know it is still not frictionless, nor is it flawless or fun.
The Challenges of Self Checkout
Using self checkouts does not equal liking them, and negative experiences can affect customer satisfaction and their perception of service quality.
Customers expect self-checkouts to be fast and efficient, but they often find themselves standing in line for self-checkout kiosks. Queuing for self-checkout creates double the frustration and disappointment. Once they reach the counter, customers often deal with machines that are out of order. Other times they start the process just to have the machine malfunction. All too often, they must stop and ask for assistance from store staff. A 2021 report shows that 67% of respondents experienced a failure while using a self-checkout kiosk. Self-checkout can be frustrating in many other ways – from problems with barcodes to bagging efforts, and from kiosk cameras and video surveillance to too many errors.
The truth is that most self-checkout kiosks do not automate the checkout process. They just change things around so now the customer works at the register.
Customers scanning and bagging their items allow retailers to save money on staff wages. Yet, self checkout presents challenges for stores. This in-store technology usually requires investment in expensive kiosks that take up space on the retail floor – and floor space costs money. Also, self checkout machines are not really autonomous and demand the support of store staff for technological issues, maintenance, and supervision. While saving on labor, retailers incur losses due to more unintentional errors and much more shoplifting at self-checkouts compared to cashiers. In 2022, for example, the New York Times reported that supermarket chain Wegmans is discontinuing its self-checkout app due to theft issues. Data suggested that a store in which 55 to 60 percent of transactions go through self-checkout can expect losses to be 31 percent higher.
Retailers need better solutions that do not compromise security and provide exceptional experiences for their customers.
What Customers Want
People, especially millennials and Gen Z, do not only embrace technology but expect it to evolve. Indeed, 66% of consumers believe that automation can improve their shopping experience, according to Shopify. This means novel solutions that bring about a smarter way to do things, like the Nexite NanoBT technology, are the natural next step.
Due to technology, shoppers are more used to doing things their own way, and more self-service does have its advantages. Shoppers often feel judged by sales associates. They may feel pressured to not take too long, act or look a certain way, or make a purchase. This is where contactless shopping is not only convenient – it is empowering.
Self-service checkout is just one way in which customer expectations are a mix of physical and digital. Today’s customers enjoy experiencing fashion in person but want online-level availability and convenience. They can look for human interaction yet expect a frictionless experience. They look for reliability coupled with ease of use. And they want it now.
New technology delivers connected stores with real-time inventory and availability, just like e-commerce offers, but with the added benefit of on-the-spot fulfillment. Customers can walk into the store, pick an item and walk out with it, creating instant gratification that you cannot get online. And with mobile checkout, they can do so quickly, on their own device, knowing it is just as easy to make a return. It’s the best of both worlds.
Yet, different industries have different needs. Is self-checkout the right choice for the fashion industry?
The Debate Over Fashion Self Checkout
Retailers attempt to adopt in-store technology to meet customer expectations for omnichannel shopping experiences. As we see more fashion self checkouts, many retailers still debate over incorporating them into their brick-and-mortar stores.
Self checkout can potentially promote contactless shopping experiences, but the question remains: Is DIY checkout right for fashion brands? In other words, what works for a convenience store like AmazonGo is not necessarily the optimal solution for fashion.
Perhaps their biggest concern is how to create a secured checkout. Most fashion stores have electronic surveillance (EAS) systems, complete with tags attached to the products for anti-theft security. But existing EAS tags require removal by store staff or by the customers themselves.
At Zara stores, advanced self-checkout terminals still call for the manual removal of EAS tags. The answer lies in new in-store technologies, like Nexite’s EAS-enabled NanoBT tag that offers the first security solution controlled by the cloud.
Fashion self checkout in chain stores vs. luxury fashion
As luxury fashion items are priced at hundreds or even thousands of dollars, security is ever more critical. Now imagine clunky EAS tags and self checkout kiosks as we know them. We can maybe picture them in big fashion chains, but they just do not fit in a Gucci, Dior, or Louis Vuitton store.
Customers in chain fashion stores are likely to have different expectations than customers of luxury fashion brands. For fashion retailers in mainstream stores, the challenge lies in fast checkout, no long lines at the point of sale, and efficient anti-theft solutions. Luxury stores have less traffic, and shoppers are likely to favor a more high-end experience: personalized, exclusive, and curated to their needs.
The luxury retail experience traditionally relied on physical stores where customers were met with service, assistance and attention. This personal interaction has been an integral part of the luxury experience. Until not so long ago, some of the best known luxury brands did not embrace e-commerce for exactly this reason. This is no longer the case and premium fashion houses now offer online shopping.
If we learned anything from luxury e-commerce contactless shopping is that brands must find the right balance of online and offline customer experiences. Beautifully designed stores, curated collections, high-end items, excellent service and care all enhance the luxury retail experience, but standing in line for the monetary transaction definitely does not. The same goes for errors and machine malfunction.
Luxury can be about personalized experience where they matter. Frictionless self checkout does not replace the personalized experience but enhances it with product information, personalized content, and authentication empowered by state-of-the-art technology.
Next Generation Self Checkout
In a survey, 59% of consumers said they were more likely to use self-checkout if technology improvements were deployed, and another study by Sasha Fedorenko showed that 60% prefer to have a “just walk out” checkout experience. The Nexite technology and platform do exactly that. The company’s patented tag has a NanoBT chip connected to the cloud that offers the first truly frictionless checkout that is also secure.
With the Nexite battery-free tag, every item is automatically secure, eliminating the need for any other security tag. When customers are ready to pay, they can click ‘check out’ on their device and choose a form of payment.
Once the item is purchased, the tag’s EAS is disabled from the customer’s phone. The customer can now exit the store with confidence. In case a customer walks out of the store without paying for one or more items, the connected tech sends a gate event to the cloud. The cloud checks the tag’s status and sees the item has not been purchased. This can trigger an alarm or a push notification to the store staff, alerting them to the item at the gate. And what if the customer took out the tag before leaving the store? The Nexite tag has an anti-tamper mechanism so if it is removed before purchase, it will trigger an alarm, creating an extra layer of security.
Self return is just as frictionless. The customer walks in, places the item/s at the designated return place, and receives a notification that the item has been returned. That’s all, thank you.
The patented tags connect to a platform that makes it simple to offer hybrid options, such as buy online and pick up in-store or click & collect, fusing online shopping with in-store experiences.
The Nexite smart tag is always connected, with real-time information automatically flowing from each item: from the factory to store and from shelf to checkout. Thanks to Connected Merchandise, employees know exactly where each item is in the store and can replenish shelves ahead of time so the customers can always find what they want.
Connected merchandise, a stream of real-time data and a dedicated platform come together to create connected stores and experiential retail. Knowing what items customers engage with, which go well together, or what shelves get the most attention can be translated into sales-funnel insights and actionable data.
Customers enjoy a better shopping experience. Retailers get real-time data, operational efficiency, and, eventually, a better bottom line.
The Nexite Future
The future of retail is in omnichannel experience. Seamless in store technology enhancements can power customer experiences while optimizing operational excellence for retailers.
With Nexite’s end-to-end solution and first-of-its-kind NanoBT, data flow bridges the gap between offline, online and mobile to create new connectivity. This is a retail revolution that is technology-powered and customer-centered. It brings real value, and real value is always in style.
Learn more about our connected merchandise platform