Revolutionizing Retail: The Rise of Self-Service Checkouts

Rumors of Self-Service Checkout's Demise Were Greatly Exaggerated: Discover How It's Powerfully Revolutionizing Retail Once Again

What to Expect in This Issue

In this issue, we will discuss IKEA's latest project. IKEA has embarked on an unexpected and very interesting experiment in the field of self-service. If successful, it could change IKEA's concept forever.

We will also delve into NCR's Q1 2024 report, with a special focus on self-checkout systems and their software solutions.

As a fiscal specialist, I will share insights on fiscal law and self-checkout systems, examining how these regulations influence their implementation.

Status of self-service in retail

Self-service in retail has revolutionized the shopping experience by empowering customers to take control of their transactions. This model allows shoppers to scan, bag, and pay for their items independently, often using automated kiosks or mobile apps. The benefits are manifold: reduced wait times, increased efficiency, and greater convenience for those who prefer a quicker, more autonomous shopping experience. Retailers also gain from this setup through lower labor costs and improved customer flow management.

However, some retailers are reducing or limiting the usage of self-service due to increased incidents of theft. For instance, Target has limited self-checkout to 10 items or fewer at most of its 2,000 stores across the U.S. Walmart has reduced self-checkout hours at certain locations, reserving lanes for Walmart+ customers and Spark drivers during specific times. Similarly, Dollar General is removing self-checkout stands at 300 stores and limiting self-checkout to five items or fewer at another 4,500 stores.

These companies have found that the convenience of self-service can sometimes be overshadowed by the challenges of maintaining security and minimizing losses. Despite some of these negative developments, the number of successful implementations and positive usage experiences remains high.

With the rise of AI, more efficient self-service systems can be implemented. Advanced algorithms and machine learning technologies can enhance security measures, such as identifying suspicious behavior or unauthorized item handling. Additionally, AI-driven analytics can provide valuable insights into customer behavior and preferences, further optimizing the self-service experience. As retailers continue to innovate, leveraging AI capabilities promises to unlock new possibilities for secure, efficient, and seamless self-service in the retail sector.

Ikea's Bold Move: Fully Embracing Self-Service Checkouts in Düsseldorf

In 2008, Ikea was considered a pioneer when it introduced self-service checkouts in Germany. Although the concept had been tested nearly 60 years earlier in a Swiss Migros supermarket, self-service checkouts struggled to become mainstream. They save space, reduce waiting times, and lower labor costs but also increase the risk of theft and are not favored by all customers, some of whom prefer human interaction.

Despite these challenges, Ikea is experimenting with a new initiative at its Düsseldorf store, where since mid-May, only self-service checkouts are available. This aims to reduce customer waiting times and respond to the increasing preference for contactless payment. While card payments are encouraged, cash payments remain an option, and trained staff are still present to assist.

Ikea has not disclosed how much it saves in labor costs, emphasizing customer benefits instead. Since introducing self-service checkouts, Ikea claims to have significantly reduced checkout waiting times and improved service. Currently, over 65% of customers use self-service options like 'Shop & Go' and express checkouts. Ikea plans to review the Düsseldorf experiment's results in a few months and may extend the concept to other stores, always considering the well-being of employees and customers.

?Concerns about increased theft with self-service checkouts have not materialized, according to Ikea, as customers reportedly scan items accurately. The system enjoys high acceptance across various demographics.

NCR continue Growth and Expansion in Self-Checkout Technology

NCR Voyix (NYSE: VYX) recently held its first-quarter 2024 earnings call, unveiling significant achievements and strategic advancements. Key executives, including CEO David Wilkinson and CFO Brian Webb-Walsh, shared insights into the company’s performance and future prospects, emphasizing growth in self-checkout technology and platform expansion.

Expansion in Retail and Restaurant Sectors

NCR Voyix made notable strides in its retail and restaurant segments. The company signed nearly 300 new customers and expanded services with existing clients. Currently, NCR Voyix’s platform supports approximately 61,000 retail and restaurant sites, representing 18% of its total customer base.

In the restaurant segment, NCR Voyix signed over 230 new customers, boosting platform and payment sites by 6% and 26%, respectively. One significant partnership was with Pressed, a leading fresh juice brand in the U.S. NCR Voyix will provide Pressed with a comprehensive suite of solutions, including point-of-sale, back office, e-commerce, loyalty, and payments, enhancing operational efficiency and customer engagement.

Significant Retail Sector Milestones

The retail segment also witnessed substantial growth, signing over 50 new small and mid-market customers and four enterprise customers, resulting in more than 800 additional sites. Platform sites increased by nearly 57%, reflecting the successful conversion of on-premise customers to NCR’s commerce platform.

A notable achievement was a multiyear expansion and renewal with Sainsbury’s, one of the largest grocery chains in the U.K., which operates over 1,700 stores. For over two decades, Sainsbury’s has utilized NCR’s on-premise point-of-sale software and self-checkout technology. As part of their expanded agreement, Sainsbury’s will upgrade to NCR’s cloud-based solutions, connecting over 22,000 lanes across their store footprint. This transition is expected to deliver a payback on investment in less than two years and generate incremental recurring revenue for NCR.

Advancements in Self-Checkout Technology

NCR Voyix continues to lead in self-checkout technology. The company expanded its self-checkout contract with a leading global e-commerce retailer, doubling the number of self-checkout sites and introducing next-generation solutions. Additionally, the Navy Exchange, an existing NCR customer, will deploy self-checkout systems across 40 stores in the U.S., with potential for further expansion.

NCR’s next-generation self-checkout solution is gaining traction, launched with over 15 customers, including Sainsbury’s. This advanced technology aims to enhance the guest experience and streamline operations, particularly in a challenging labor market. NCR anticipates broader adoption of this technology in the coming quarters, driving further growth.

Strategic Partnerships Enhancing Offerings

To further strengthen its offerings, NCR Voyix has entered into strategic partnerships. Collaborations with companies like Everseen aim to mitigate shrink through AI-enabled self-checkout technology. These partnerships enhance NCR’s capabilities in providing comprehensive solutions to retail, restaurant, and digital banking customers.

Conclusion

NCR Voyix's Q1 2024 performance underscores its commitment to innovation and customer-centric solutions. The company’s strategic initiatives in self-checkout technology and platform expansion are poised to drive continued growth and success. As NCR Voyix continues to invest in and improve its products and services, it remains well-positioned to capture additional market share and deliver enhanced value to its customers.

Self-Service and Fiscalization

In many countries, the sales process is regulated by fiscal laws aimed at ensuring correct VAT handling and combating the gray economy. Historically, these laws applied primarily to cash payments. However, in recent years, fiscal regulations have been extended to cover other payment types. Today, in most fiscal countries, every sales process, regardless of payment type, is regulated by these laws.

A similar trend is observed in e-commerce. Previously, as cash was not involved, e-commerce transactions were excluded from fiscalization. Nowadays, more and more countries are including e-commerce transactions, such as sales through online platforms, under fiscal laws.

?This shift also affects self-service processes. If a self-service process is entirely conducted within the store, including item delivery, it is generally subject to fiscalization. If it resembles e-commerce, where payment and delivery are separate processes not directly linked to the store, it is often treated as e-commerce. Consequently, in some countries, such processes are subject to fiscalization, while in others, they are not.

Focusing specifically on self-checkout systems, these are treated in all fiscal countries as standard checkouts. Regardless of the payment type, transactions made through self-checkout systems must comply with relevant fiscal laws.

This extension of fiscal laws presents new challenges, particularly in countries where the use of a fiscal printer is mandatory. The physical construction of self-checkout systems often makes it difficult to integrate and operate a fiscal printer. However, in countries where fiscal laws are more software-oriented, implementing these requirements is more straightforward.

Upcoming event

Fiscalization in Scandinavian Countries - Sweden and Norway

Invitation to FREE Webinar: Understanding Fiscalization Requirements in Sweden and Norway

Are you curious about the obligations to issue receipts in Norway? Or perhaps you're interested in understanding the important fiscalization requirements in Sweden?

Join us for an informative webinar featuring our legal consultants, Nikolina Basic and Stefan Ditrih , as they provide a detailed overview of fiscalization in these two countries.

In this webinar, you will gain insights into:

- General overview of fiscalization in Sweden and Norway

- Timeline and key legislation

- Fiscalization requirements, including fiscal devices and POS elements

- Data flow and management

- Fiscal documents and their importance

- Registration and certification procedures

- Audit procedures and penalties

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Date: 13th of June 2024

Time: 3pm CET

Platform: Clickmeeting (register here)

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Don't miss this opportunity to learn from the experts and get your questions answered!

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I look forward to seeing you there!