August 6, 2004

Self-Checkout Faces Practical, Tech Hurdles

By Evan Schuman, eWEEK

Self-service retail checkout systems are among the hottest growing technology segments, but the new devices are still in an experimental phase and suffer from the startup hiccups of any new technology.

Some of the challenges are technological—such as incompatible databases—while others are either legal (proving the age of a customer wanting to buy tobacco or alcohol) or practical (dealing with produce without a barcode or items too light to be verified by weight).

A technology source for some problems involves the back-end operations and potentially incompatible databases. The backbone of most grocery IT operations is the POS system, typically running on terminals running on a 4690, an 18-year-old IBM proprietary retail multithreaded OS. The self-checkout systems are much more graphically oriented and often run Windows 2000, said Greg Buzek, president of the IHL Consulting Group.

Much of the pricing data is only on the older system, but the weight and product-size information is only on the newer system. The self-service also hands back to the older system when payment is tendered. The problem? The operating systems "don't speak the same language," Buzek said. "There are multiple databases and a translation layer. Pricing updates sometimes don't get passed through."

There's plenty of chance for a price disconnect, with the systems needing to track three price points: on the shelf, in the store's POS database and in the self-checkout system's database.

When that price update doesn't go through, the customer is shown a price different than what might be on the shelf. The entire purchase must now be halted while a clerk is asked to intervene.

"There is an inconsistency from store to store in setting tolerances," Buzek said, with some stores with higher fears of theft setting less-forgiving tolerances than other stores.

Some issues have little to do with software challenges and involve more of the very nature of self-checkout systems.

The typical self-service process has a customer scanning each item and then placing it in a bag, where the item's weight is checked against what that item's weight is supposed to be. At least one vendor—Productivity Solutions—adds another layer of security by using infrared to also measure the size of the package against the product's size on file.

There are a handful of areas where self-service systems tend to have problems, such as processing un-barcoded produce, age-authorization items (including cigarettes and alcohol) and very light items that might not register properly on verification scales.

"There are indeed a lot of products that just don't do well in self-checkout," said Mark Frantz, an independent retail analyst in Sarasota, Fla. "But it's not that there are so many little things [going wrong] that it bogs down efficient use."

For software that is designed to be used by nervous consumers who ostensibly have had no training, some in the industry complain that it is typically too unforgiving and nonintuitive.

"Many times, the checkout self-service kiosks do not function," said Norman McLeod, associate director in the market research department at InfoTrends Cap Venture, a job that has him overseeing retail technology research trends.

"Customers try, and they have a frustrating experience. I don't know what it is about the kiosk business, but so many have a fundamental design problem," McLeod said. "What usually happens is that the customer finds that one item will not scan or they have an item that the automatic checkout cannot accommodate."

Retailers point out that customers—statistically—do a better job of properly identifying produce, for example, than does the typical cashier. The customer will know that it's an organic McIntosh apple, even though the cashier may think it looks like a nonorganic Delicious. But will the customer be honest enough to volunteer that the fruit is the much-more-expensive organic version?

Although some IBM self-checkout systems in Europe claim to be able to identify produce by smell, that's not a U.S. capability yet. Most systems require special bagging, labels and sometimes human intervention.

"The self-service kiosks are horrible at dealing with produce," McLeod said.

And when the self-service system is confronted with an unexpected request, it gets rather grumpy, McLeod said. "One design issue that is very difficult to overcome is that it fundamentally cannot handle exception. If anything happens outside of its parameters, it won't work. For [self-service] to truly work, there need to be improvements upstream" at the interface design and programming end.

Caroline McNally is the chief marketing officer at Pay By Touch, a company that makes biometric authentication devices that work with self-checkout systems. McNally said she discovered the interface challenges herself.

"Where I live, there really isn't a lot of self-checkout," she said, but when she tried it while traveling one day, "I couldn't figure it out." As an executive involved in this segment, she said she experienced "this stupid factor" until an employee came over and offered some assistance.