SelfScanning Update

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Self-Scanning Update

• Steve Burbridge TDS
• Todd Garland DSI
• Terry McGraw CMG

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Topics to Cover

• Why Self-Scanning?
• Suppliers
• Issues Faced by The Magazine Category
• Merchandising Best Practices
• Resources
• Whats Next

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Why Are Retailers Going To Self-Scanning? -
Savings

• 90 of the front-ends costs are labor
• Self-scan ? 4 lanes 1 cashier
• 225,000/year in labor savings
• vs.
• 65,000/checkout for self-scan units
• yields a
• 12-15 month payback!!

Source NCR White Paper on Self-Scanning
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Why Are Retailers Going To Self-Scanning?
Customer Service
Source Marlin Research (9/01)
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Why Are Retailers Going To Self-Scanning?Customer
Acceptance

• Customers have adopted the technology (1)
• 1/3 of customers choose a store based upon self
  checkout availability
• More than 50 use it with 20 using it
  extensively
• 89 describe it as faster, easier, and more
  convenient than traditional checkouts
• Customers use it frequently
• Upwards of 35 of transactions occur at the
  self-checkout (2)

1. Source NCR White Paper on Self-Scanning 2.
Source Various industry reports
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Shoppers Like The Convenience Of Self-Scan
Source TDS/MasterFoods/Wrigley Front-end Focus
(2002)
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Self-Scan Is More Attractive To The Upscale
Consumer
Source TDS/MasterFoods/Wrigley Front-end Focus
(2002)
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Self-Scan Users Purchase Fewer Items At A Time
Source TDS/MasterFoods/Wrigley Front-end Focus
(2002)
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Self-Scan Users Tend To Be More Frequent Shoppers
Frequency Of Shopping
Source TDS/MasterFoods/Wrigley Front-end Focus
(2002)
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Merchandising At A Self-Scan Checkout Is
Extremely Important
Purchased Product At Checkout Today
Source TDS/MasterFoods/Wrigley Front-end Focus
(2002)
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Self-Scan Key Findings

• Self-Scan users skew towards the younger, higher
  education, higher income, family demographics
• Quick and convenient are key reasons why people
  like self-scan
• Self-scan users shop more frequently than regular
  lane users but purchase less per trip
• A lower percentage of consumers purchase checkout
  products at the self-scan compared to
  non-self-scan lanes
• Merchandising at the self-scan lane can have a
  dramatic effect on purchase activity

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What Retailers Have Adopted Self-Scanning Units?
Information gathered from in-store surveys
and/or supplier websites
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Self-Scanning Technology Suppliers
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Key Players UScan (Optimal Robotics)

• Largest supplier estimated 70 market share

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Key Players - Productivity Solutions, Inc.
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Key Players - NCR
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Issues Facing The Magazine Category
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Issue - Little Notice to Merchandising Dept.

• Our Buyers can be the last to know if these
  systems are going in
• Store Operations is driving the decisions
• Little ability to affect the layout and type of
  units used
• By the time we can react, it is often too late as
  the merchandising units in place are removed
• Cost of wire and lost sales
• Coolers are shifted over resulting in lost space

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Issue Nature Abhors a Vacuum
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Issue Nature Abhors a Vacuum
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Issue Coolers Fill the Void!
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Issue - Checkout Layout

• Four (4) standard checkouts can be removed for
  every pod set up of Uscan
• In addition, laying out the self-scanning units
  without sufficient lobby space can prevent front
  of unit merchandising

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Issue Wrong Model Chosen
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Issue Lack of Merchandising Space
Before 11 B shares
After 20 shares