A study by IHL Consulting Group (Franklin, Tenn.) has found that self-service shopping has gone mainstream in supermarkets, drug stores, mass merchants and home improvement centers, as self-checkout systems will generate transactions worth $70 billion in 2004.
As more self-checkout systems are deployed in the next few years, the study forecasts that the value of these transactions will increase to over $330 billion by 2007.
“We live in an age where self-sufficiency often reigns supreme, and time is at a premium,” says Greg Buzek, president of IHL Consulting Group. “New self-service technologies are emerging that will revolutionize the way we shop for goods and services. From grocery stores/supercenters to home improvement stores to department stores, self-service technologies are speeding the checkout process for customers.”
The “2004 North American Self-Checkout Systems Market Study” details the trends as well as the quantitative functions of the self-checkout market, including system shipments, installed base, market value, key technology vendors and the value of transactions through these systems.
The report also includes a four-year forecast for shipments, installed base and market value and an analysis of projected penetration in key retail segments.
Some key insights from the report include:
* In stores currently using self-checkout systems, as much as 40 percent of the total number of transactions now go through the self-checkout, allowing retailers to provide more customer assistance within the aisles to help shoppers find products.
* More and more retail segments are adopting self-checkout. The Home Depot now has more than 3200 lanes installed.
* The key technology players in self-checkout are NCR, IBM and Fujitsu Transaction Solutions. NCR currently dominates the market but IBM and Fujitsu have recently entered the market through key acquisitions, bringing with them significant point-of-sale success.
“The number one challenge facing retailers of all sizes is, 'How do we compete with Wal-Mart?',” says Buzek. “Self-checkout systems are allowing retailers to move labor from the checkout process to areas of the store to create a differentiation in customer service that can be used to compete with the world's largest retailer.”
IHL is an independent business-consulting firm that provides market analysis and business consulting services for retailers and information technology companies that focus on the retail industry.