Selling Impulse at Self Checkout

Should impulse items be sold at the self-checkout? This article reports on this very question, and the selling of impulse items at the self checkout, and a retailer working group discussion on how to balance competing objectives, scan accuracy, less friction and the need for dwell.

To kick start the meeting, a leading vendor, Mars Wrigley, and their global transaction zone team, were invited to share their collaborative approach to help retailers re-think their front end strategy, as they seek to help their retail clients rethink their impulse buying strategies in the new retail context where often over 80% of transactions could be processed via self-checkout.

Self-Checkouts And Impulse Purchases

The shift towards SCO therefore presents a dual challenge: maintaining impulse sales while ensuring the SCO process remains streamlined and user-friendly. The working group heard how the key to successfully delivering both  lies in the design of the checkout space.

Retailers are now considering optimising the pre-SCO area, a transitional space where customers might be more receptive to impulse purchases.

The recap video and transcript of the meeting is below (edited for brevity and clarity)

Colin Peacock: Yesterday we had a great session looking at the whole area of selling items, impulse items at the checkout, at the self-checkouts.

We had a great presentation from Mars Wrigley, who have formed a transaction zone team. We had a good number of retailers, around 40 or so, join us to discuss what was going on, what they were doing, and what Mars Wrigley were offering in terms of new thinking.

It was a good debate. And I was interested to see what you wrote down as your notes.

Adrian Beck (Prof.): Yes, it was interesting. Some of the statistics they presented were really quite interesting.

I’d never really understood how important impulse purchases are in terms of profitability for, certainly for processes. The amount of sales generated through that space was really quite interesting.

And of course, one of the things that SCO has done is it’s rather torpedoed waiting for somebody else to do the scanning and sort it out for them.

And so that’s why perhaps it’s been so successful in capturing sales because you really have that captive audience stood waiting for something to happen, and they can easily be drawn into this through clever design and marketing.

And so what SCO’s done is completely changed that around.

The customer is now not passive; they’re very active in that space. You’re expecting them to do the scanning, organize the payment, and so they’re much less likely to be hanging around, looking at things. And that’s clearly had a major impact on the amount of impulse purchasing that goes on in those spaces.

And so it was interesting to think through the consequences of all this, isn’t it?

Because it’s clearly having an impact. For some grocers, upwards of 80% of all transactions now go through SCO.

And what was interesting from the presentation was how they’re now trying to think through, as a supplier, as a vendor, how they can help grocers begin to rethink how we can continue to have some form of revenue from this idea of impulse purchases.

How can you think about the design of these spaces to make sure that retailers can continue to benefit from that revenue source?

And we talked a lot about how, on the one hand, you don’t want to introduce products into the SCO space itself. What you want to do is make those spaces as uncluttered and uncomplicated as you can because you really do want the customers to focus.

We know that these spaces can generate loss, and you don’t want to put more products into those spaces that may end up generating more loss. So there’s a real opportunity in the pre-SCO space, where potentially you have this movement of people into the SCO corral.

And that seems to be a potentially rich environment for offering impulse purchase opportunities, perhaps as people are queuing to wait to get in there or just moving through that zone.

And so I think there’s an opportunity there to try and optimise that pre-SCO space in the checkout environment to help drive this sort of impulse purchase.

Colin Peacock: Do you believe that was quite controversial because the idea of getting your head around creating a friction-free experience, yet we want to create this dwelling opportunity which feels counter to the original aim.

So, to your point, if you are going to sell impulse items, you do need that wait time where people can consider what to do and whether to buy some of these impulse items. Do they need some chewing gum, batteries, or whatever? So very interesting.

Adrian Beck (Prof.): And also what I liked about it was they recognise they’ve got to rethink the whole story around impulse, which is, you know, when you’ve got people doing scan and go, they’re never going to go to a checkout, other than just for a quick payment.

So how do you begin to do your planogramming, your ranging, and your design of your product on the shelf as well to try and attract more impulse in that environment?

So, you know, they recognise they’ve got to really rethink this whole concept of impulse purchase and how the design and layout and positioning of the product can be changed to take on board the reality that self-checkout is going to be a big part of grocery from here on in.

And how can impulse work with the way that SCO is developing in grocery stores now and in the future?

Colin Peacock: To your point it needing to be in that sort of pre-sales area or pre-SCO area. We had one retailer who had been at the forefront of using the screen to promote products, like bottles of water or newspapers, and they backed away. It seemed like they backed away from that because it added complexity and time to the SCO process and potential for loss.

So it does seem as though selling right next to the SCO doesn’t feel about being the direction of the future. You know, it seems to be making those cleaner.

Adrian Beck (Prof.): Well, it’s, you know, we often talk about this delicate balance between selling, security, and there’s also a balance between selling and friction and complexity in it. And we know that if you introduce more complexity, what you’re also doing is increasing the likelihood of error and the opportunity for error.

And we know that’s a big issue around self-checkout.  That customers are likely to make lots of errors if you make things overly complicated.

Nobody’s ever trained us to use self-checkouts.

You know, there’s not some sort of postgraduate degree in how to use the self-checkout machine. We’re just thrown in there as customers, and there’s an assumption that the interface will be sufficiently instructive so that we don’t make too many mistakes and errors.

But it’s a challenge, and if you throw in too much complexity, the downside is the balance goes where you end up generating more loss because people are making mistakes, or you’re giving them opportunities to make purposeful mistakes, which in effect is theft.

Colin Peacock: That’s very true. Fascinating. There are people within the organisation who may well have competing objectives here. And I think the big message from Mars Wrigley is that they recognise there are lots of different needs.

And they’re acting to help promote collaboration across and bring together the vendor and all the different locations within the retailer to try to bring one version of what the self-checkout could look like with impulse sales that everyone could agree to. And I thought that was interesting.

Adrian Beck (Prof.): Yeah, I found it really encouraging that, you know, to bring the vendors in, we’ve often talked, haven’t we, throughout ECR about the importance of understanding root cause analysis.

Sometimes you can put sticking plasters on in stores to try and fix problems that are much more further down the line.

So it’s very encouraging that vendors are saying, look, we recognize that SCO is changing. How we are going to market and display our product and we want to really work with you to help you understand how we can begin to design these spaces to make sure that we sell our products as vendors.

But in a way that you’re not losing out on what was a pretty valuable source of income through impulse purchase.

And so I was very encouraged with the way in which they had actually developed a sort of a project-based approach to helping retailers understand how they can reimagine their spaces to make sure that there’s this usual cliche, the win-win for themselves and for the retailers.