The profit potential of self-search

Part 1 of a 3-part article, in collaboration with Zebra Technologies

In recent years grocery retailers have made significant investments in self-scanning technology. Self-scanning, also referred to as “scan-and-go,” can already be used at more than 46,000 stores across the world, according to a study by research and consulting firm RBR. This includes self-scanning with a smartphone as well as with a scanning device owned by the retailer.

Retailers such as Kroger, Carrefour, Kaufland, Coop, Albert Heijn and Jumbo already kicked-off self-scanning several years ago, before the world was hit by Covid-19. The pandemic pushed self-scanning technology to the forefront as a perfect solution for getting customers through a store as quickly as possible, minimizing the risk of standing in line and close human contact in crowded stores. That made other grocery chains such as Woolworth in Australia and convenience chains such as 7-Eleven jump in as well.

The rise of self-scanning in grocery and DIY retail

The growing popularity of self-scanning in grocery retail can be easily explained by the benefits it brings to shoppers and retailers. Self-service technologies in general and self-scanning technology specifically have proven to drive significant savings in labor costs for retailers. This is particularly important today, with retailers facing labor shortages and quickly rising labor costs.

Importantly, these labor cost savings do not come at the expense of customer service or customer experience. It is a misconception to think that allowing customers to do things for themselves decreases the level of customer service that retailers offer. The opposite is true: empowering customers to engage in the shopping process on their own terms adds value for them and increases the perceived quality and enjoyment of the shopping experience. It saves them time and puts them in control of the process, the pace, and the decisions they make. And it offers social comfort to those who do not enjoy the interactions of personal service. Once shoppers experience self-service technology their affinity and likelihood to keep using these solutions grows. In fact, for many people, self-service has become the preferred mode of shopping.

Retailers are riding this wave. In the last three years, traditional registers staffed by associates saw some of the biggest declines at minus 45%, as retail decision-makers plan to convert cash register space to self-checkout.

The mobile app as in-store shopping assistant

Retailers that do self-service right realize that catering to the needs of customers requires more than “just” adding isolated self-service options. Generation Z, which includes people born after 1997 and sometimes referred to as digital natives, is the generation that will determine the shape of retail in years to come. Research into their shopping patterns revealed that they are happy to admit that they are “always” online. The Gen Z generation spends more time on their mobile devices than any other generation. They use smartphones to communicate with the world, entertain themselves, and shop. They are tech-savvy, impatient, and demanding, so they expect end-to-end digital experiences that work flawlessly. They will not accept time spent on unclear navigation, bad UX, or waiting.

Although Gen Z is a tech-savvy generation, many of them still find the shopping experience in physical stores valuable and enjoyable. They shop both online and in stores quickly and securely using mobile payment apps like Apple Pay or Google Pay. Like Millennials, they just expect these two sides of retail to work together.

Retailers have successfully created branded apps to provide their customers with an easy and intuitive interface for mobile commerce. Now retailers must embrace these apps to provide in-store shopping assistance as well. Branded apps are by far best positioned to bridge the online and in-store shopping experience, and to enhance the in-store experience with highly anticipated self-service capabilities such as self-scanning, in-context product information, self-search, and mobile payments.

The RBR study shows that many retailers are working with third-party specialists for integrating self-scanning capabilities into their apps. Vendors such as the Dutch firm Re-Vision, acquired by Extenda Retail in 2022, Austria's Shopreme, and Budgetbox from France supply retailers across a wide range of countries. In many of the successful cases, retailers offer a superior self-scan experience via a retailer-owned device. As a result, the market for these “hand scanners” or “personal shopper devices” continues to grow, with US-based Zebra accounting for more than 80% of hardware installations.

Zebra’s most recent personal shopper device, the PS20, is a “double-duty” device. It offers shoppers a personalized shopping experience: they can scan and bag as they shop, they’ll know how much is in their basket and where to find the best deals, and they can experience instantaneous checkout. Store associates, on the other hand, can click and collect items for online order fulfilment, perform price checks, provide in-aisle customer assistance, and perform line-busting to help customers check out quickly.

No better time to introduce self-search

As shoppers request and get accustomed to the convenience of self-service, there is no better time for retailers to complete this experience with self-search.

Self-search allows shoppers to locate and navigate directly to a specific product using a digital map of the store on their smartphone or retailer-provided device. In more advanced implementations, shoppers can navigate to all the products on a shopping list in a single optimized route. This allows shoppers to pick up all their items as quickly as possible, without the need to walk back and forth among the aisles or ask store personnel for directions.

Self-search is currently the missing link in the self-service experience. Think about it: before a shopper can scan a product and pay for it in a frictionless manner, they first need to find it. And that’s exactly where a lot of friction still exists in the shopping experience today.

The friction in product finding

This friction is easily understood if we look at the numbers. Shoppers are in stores to select, pick up, and pay for the products they want to buy, not to search for them. In research commissioned by Signify in 2018, GC Research concluded that 57% of shoppers are frustrated with the fact that searching for items takes longer than needed. Not surprisingly, 49%of shoppers in Europe indicate that they are interested in an in-store navigation solution to find the way to a desired product.

The friction is not limited to the customer experience. It also directly impacts the retailer topline. Abandoned purchases related to unlocatable products are much more prevalent than you might think. Retailers report that 40-50% of their regular shoppers often fail to find products. This number is echoed in research conducted by VYPR and published by the Location Based Marketing Association (LBMA) in 2019. This research concluded that up to 40% of shoppers fail to find at least one product they intend to buy in every shopping trip. The LBMA concludes that retailers experience a 3-5% loss in revenue relating to unlocatable products.

And this is topline only. Just imagine the labor cost savings that could be realized if shoppers were able to autonomously find all the products on their shopping lists. This avoids the need to involve a store associate who then needs to abandon the work they are doing, take the shopper to the right aisle, search for the product themselves, point it out, and return to their original job. Retailers report that front-of-house store associates spend about 5% of their time on average on product search support

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This is the first in a series of three articles on the profit potential of self-search in big box retail. The next article will explore how to make self-search happen. For the full read, download our whitepaper, The profit potential of self-search in big box retail

Learn more about how Signify can help you to implement self-search in a scalable and cost-effective way.