Beyond Theft: Why Walmart and Target Should Ditch Self-Checkout

Walmart's CEO has blamed self-checkout for an increase in shoplifting. That's only part of why it needs to go.

Retailers and restaurants love to push work off on consumers under the guise that it's somehow better for them. It's like when you order a bagel and a cup of coffee at Panera Bread and you get handled, a blank bagel, frozen butter or cream cheese packets, and an empty coffee cup.

The eatery frames that as allowing you to customize your order. In reality, it's just Panera skimping on labor and making you do things that restaurants usually do for you.

Letting me customize my coffee in an app as Starbucks (SBUX) - Get Free Report does is customer service. Handing me an empty cup and pointing me toward a carafe with a milk and sugar station is the exact opposite.

Self-checkout is the same principle. If Target (TGT) - Get Free Report or Walmart WMT offers a few stations where people in a hurry can opt to check themselves out, that's very different than replacing your cashiers with automated checkout stations. That's not about convenience, it's about saving money.

Theft Is a Symptom, Not the Real Self-Checkout Problem

Walmart CEO Doug McMillon recently gave an interview where he blamed self-checkout for an increase in "shrink," which is retail code for theft. Realistically, tighter economic times likely also have lead to increased shoplifting but self-checkout practically begs customers to steal. It's very easy to not scan an item (on purpose or by accident) and customers who are strapped for cash could easily be tempted to help themselves to a few items. 

"If you provide an easy method to steal, people will take advantage of the opportunity," Cambridge Retail Advisors Managing Partner Ken Morris commented on RetailWire.

And, yes, self-checkout has increased shoplifting, but it has also gone from being a convenience offered to customers to a cost-saving method for stores. It's automating an area where people do a better job in a lot of ways.

When a retailer automates inventory or stocking shelves, that does not impact its relationship with its customers. Do the same thing at a point of contact like checkout and you have sacrificed a chance to connect with your customers.

Retail Is About Relationships 

While Walmart and Target are not local, neighborhood stores, they largely serve a neighborhood. The cashiers and customer service personnel largely come from the community where the store operates and it's natural that over time a relationship forms between store personnel and customers.

It's really a simple equation. Most communities have a Walmart, a Target, and a grocery chain or two. As a shopper, value is a factor, but so is customer service, and having a connection to a store.

If someone knows that one retailer is more helpful with more staff on the floor and checkouts manned by efficient, friendly people than another, that may well influence where someone shops. Nobody cares if the backroom is run by robots or if cleaning gets automated.

Human interaction and connection building can't be automated. Some tools may aid in that relationship, but ultimately people matter.

Some consumers may prefer automated checkout, but having to scan your own item is a hassle not a service. Walmart and Target have all sorts of ways they can automate but it makes sense to have people in jobs where interaction creates a better experience.

Automate the things people can't see and put as many human beings into helping customers and building connections as possible. Put your managers on the store floor as problem solvers while making sure you enough manned checkouts to meet demand.  Offer self-checkout on a limited basis for people in a rush and introverts not looking to interact with anyone, but don't forgo a key opportunity to build the relationship between your store and your customers.