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Sep 30, 2020

In honor of International Podcast Day, enjoy a blast from the past. Back to 2018 when COMMERCE NOW podcast began. 


Self-service checkout technology is transforming the way Americans think about customer service.

Not long ago, good customer service meant properly training sales associates to assist shoppers in need. Now, more and more companies are shifting to tech-based customer service. As of Q2 2018, 95 percent of American consumers had encountered at least one form of self-service retail and 49 percent used them on a weekly basis at the supermarket.

In this episode, PYMNTS in collaboration with Diebold Nixdorf, examine survey data collected from 2,170 American shoppers on their experiences with and impressions of self-service retail checkout options.
Visit Retail Self Service on
From Self-Checkout to Self-Service: The Retail Evolution: 

Q&A with Frank Natoli, Executive Vice President, Self-Service Technology:

DN website:



PYMNTS Representative:                             00:00                    

The early days of self-service were a bit bumpy in terms of functionality and obvious usefulness. Diebold Nixdorf's VP of Retail Strategy, Arvin Jawa, told Karen Webster. "That," he noted, "is getting better. The technology is becoming cheaper and easier to operate and consumers are getting more enthused for it by the moment." But he says, "In order to get all the way there, retailers need to think less about self-service as a new series of consumer touchpoints, and more about how to use it to reset the customer retail journey entirely."

Amy Lombardo:                00:32                    


                                                                                Hi, it's Karen Webster and our topic today is self-service retail checkout. With me to have the conversation is Arvin Jawa, VP Retail Strategy at Diebold Nixdorf. Arvin, thanks for joining me today.

Arvin Jawa:                         00:59                    

Hey, happy to be here Karen. Thanks again.

Karen Webster:                01:02                    

This is to take a little bit of a deep dive to go under the hood with the data from the survey that we collaborated on, to get to know what consumers think about self-service checkout, how they use it, and what they'd like to see more of. So shall we dig in?

Arvin Jawa:                         01:23                    

Sounds great. Looking forward to it.

Karen Webster:                01:24                    

All right. So here we go.

Interesting, perhaps not surprising, 82% of consumers have used self-service checkout at least once in the last year. And people like it. In fact, 80% of people said they'd frequent a merchant if they could use self-service checkout. Why do you think that is?

Arvin Jawa:                         01:48                    

Oh yeah. We see this as a really great trend. Of course, we have a favorable view of self-service technologies of course and we agree that generally, consumers also have a favorable view of self-service technology. Clearly, there's a movement towards more adoption of these solutions in the recent years, attributable to some really big implementations.


You've probably heard of Amazon Go. I'm sure everyone has heard of Amazon Go. Everybody knows Macy's in the US and Macy's has announced a recent deployment of self-service mobile application where they're allowing their consumers to scan-and-go within the store. And of course, everyone's favorite place to go and grab burgers and fries, McDonald's. A company we're very fond of. They've got a great deployment coming out here with self-order kiosks within their stores. So there's really a great buzz in the US around new self-service technology.

Karen Webster:                02:48                    

Is that because of the convenience that consumers get in order to basically be self-serving themselves in terms of getting in and out of the store quickly without having to wait for someone to check them out personally?

Arvin Jawa:                         03:05                    

You know, it's a great question and it was something that I found really compelling within the research. You see that there are lots of reasons for why consumers like self-service technologies. But ultimately, it comes down to creating value for the consumer. Consumers really enjoy either saving time, saving money, or really, really enriching their shopping experience. Retailers who have determined how to create that kind of value for consumers through self-service technologies have figured out how to actually have really good deployments.


McDonald's is a perfect example of that, right? As I mentioned, they're implementing self-service kiosks and in order to figure out where they could create value for their consumers, they started looking at the journey, they started looking at where are the ways that consumers can actually order with us? For a long time, there were only two ways to do that: you either had to go to the counter and speak to somebody and place an order, or you had to drive and go to the drive-thru and speak to a machine with a person on the other side of it.


They really reevaluated their journeys and how to reshape those beyond those two traditional ways of ordering. Where they were able to then give their consumers more choice in the ordering options, a way to actually create some sort of customization mechanism for the order they're making. Do I want lettuce on this Big Mac or not? The kiosks allow for a self-guided customization, but also self-enablement on the payment choice as well. Now the consumer has various options on how they want to pay: cash, credit, debit, or new fangled mobile technology payments.


But then beyond that, they could take it another step further and say, "Hey, we're going to actually allow you to go seat yourself. Just go over to a table, take a tent card, and we're going to bring your food out to you." So they really reshaped the journey in a way that made it faster, more compelling, and more enriching for the consumer.


When you look at those value elements, that's the type of thing that helps consumers really start to adopt usage of self-service technology.

Karen Webster:                05:22                    

And I think the technology has also improved the reliability and accuracy of the experience too. We'll talk in a little bit about self-service at supermarkets and drugstores, but it's now more efficient and faster to use these self-service checkout devices than, perhaps, they've been in the past.

Arvin Jawa:                         05:43                    

Absolutely. You know, I think there were a lot of earlier generation type of self-service implementations.


The early self-checkout systems within grocery stores or do-it-yourself retailers, they were really clunky and not very user-friendly. In fact, they were probably the antithesis of self-checkout because you would always find a need to intervene a transaction because, well, you couldn't get past the age verification on an alcohol purchase. "I want to buy my wine, but I still needed someone to validate my driver's license," or, "I couldn't scan this item properly and so I needed some assistance," or, "The weight scale didn't necessarily integrate well with my purchase." So the reality is they were far from convenient. They had lots of issues in the user interaction.


Same thing happened with kiosks and also a number of mobile apps that were early renditions of today's mobile and self-checkout solutions. Probably because the technology was sort of leading. It was almost the hammer looking for the nail, as opposed to, "Let's see what the journey is that we can improve and figure out how we can then deploy technology to eliminate the friction or reduce the time in the process."

Karen Webster:                07:09                    

It was interesting that those who don't use self-service options don't use them because they're not available at the places they shop. What is it that retailers need to do in order to implement a self-service technology? You talked about McDonald's, and the journey, and the flow. Is that what's getting in the way of retailers embracing this trend?

Arvin Jawa:                         07:36                    

There are a couple things and I mentioned a few issues around consumer adoption, which I think is one-half of the equation in the obstacles, in the barriers. Early generation technology wasn't necessarily great. But the second-half is probably even more of the reason for why there hasn't been wide scale adoption. On the retailer side of things, frankly, things are complicated. If you think about retailers having investments and legacy software platforms, they have to maintain these, and they have to integrate these. Point of sales software is a perfect example, right? Now, all of a sudden you want to implement a self-service checkout system or a kiosk system nearby the storefront. What happens is we have to then, retailers have to find a new way to integrate these new touchpoints because they would typically run on their own software, or they had their own software stack. This all costs money. It's expensive. It requires new integration and new certifications.


The other thing is that retailers didn't have a lot of options. The vendors who were the first generation of solution providers for self-checkout technologies, they were very costly and they weren't the best solution providers. Now, I think there's greater choice and they have more options.


But the other thing is, as I said before, retailers weren't necessarily looking at self-service as anything more than another touchpoint in the store. What we've found in our retail implementations of self-service technologies is that when retailers shift their mindset to thinking about self-service as a business transformation through the implementation of self-service technologies, then they really start to realize real benefit. The benefits case for deploying these solutions are amazing. They start to say and realize, "Hm, we can actually improve throughput and reduce the checkout area size within the store." In other words, "We can optimize the real estate."


Second, "We actually improve overall customer satisfaction or net promoter scores because we're more judicious in where and how we allocate our store associates' time." In other words, "It's disproportionately geared towards helping customers who need help, as opposed to spreading ourselves in a peanut butter-like fashion across every customer. We can focus our customer service on those who need it most and that optimizes our payroll investment. So now, when we improve throughput in a smaller checkout space and optimize the real estate footprint, and we do that with better customer support, we can actually start to see that we're increasing sales because we're allocating or reallocating our staff time towards upselling and cross-selling."


That's why we see success with self-service technologies without customers. We start with designing and enabling the journeys that our retailers want for their consumers. We don't start with the technology, but we instead start with addressing the pain points and the friction inside those journeys that the consumers experience, and then we design the optimal journeys that our retail clients want for their consumers. We call this Storevolution is the term we use. It's where we put the consumer at the center of the journey and we make the physical store a digitally enriched or enhanced experience that's always on and always secure.

Karen Webster:                11:11                    

It's interesting. I'll not share the name, but a QSR where I go every morning to get my coffee and breakfast sandwich implemented kiosks, but they were so cumbersome to use that the only people who use them now are the people behind the counter, which of course, defeats the whole purpose of having a self-service kiosk in the store. I thought that was kind of the craziest thing I'd ever seen.

Arvin Jawa:                         11:40                    

Yeah, yeah. No, I totally understand. And quick service is a really great place or a great space for self-service technologies to be utilized in. You know, I will name names. I love to go to Chipotle. I love to go to Starbucks. I love to go to Chick-fil-A. These are my favorites, partly because of kids, but also because I have a caffeine addiction. These are retailers who implemented self-service technologies. Some did it really well, some didn't do it so well, and some have learned along the way.


I love eating at Chipotle, but I was really, really ... I wasn't happy with their initial outlay of their mobile self-ordering app because I could never find the way to maximize or optimize my time. I could never time up when I would place my order to when I would get it in the store and pick it up at the counter. There was always a synchronization of that process. They figured it out. They allowed me to then select the time that I want to come and pick up my order, which makes it a lot easier.


Chick-fil-A did something really interesting. They don't want you to walk away with food that's cold or not fresh. And so you can place your order, but they won't actually start to make your order until you "check-in," which is basically geo located to some fence around the store location. So when you're within 100 feet of that location, you can then check in and say, "I'm here" and they'll start your order. The proximity to the store is an added feature to their mobile self-ordering application.


But I still say the gold standard is Starbucks. They did a full-on business model change, right? This wasn't just about self-service technology; they started off as a digital gift card, really, is what they're mobile app was, and then they found a way to allow me to top up my store value amount on a regular basis. When it dropped below a certain level, I would always get topped up. But then, they took that to another level and said, "Hey, we're going to let you order from this app, therefore you can skip the line." So not only did I have my payment vehicle already in my hand and on my phone, but now I had an ordering capability.


Then they integrated the loyalty points program, the stars, the rewards. And better yet, they encouraged me by changing my behavior or suggesting that, "Hey, you're going to gain more points if you actually use the mobile ordering app." That's when true adoption occurred. I don't have statistics at hand, but I think everybody that's in the industry understands that Starbucks has done a bang up job on deploying their self-ordering or mobile ordering ahead technology.

Karen Webster:                14:41                    

Oh, for sure.

Arvin Jawa:                         14:42                    

Their program is fantastic. They can use the data now to determine how to readdress or reassess their store footprint. How much are they going to serve by mobile ordering? How much are they going to serve by in-store ordering? How much are they going to do through drive-thru ordering? They can then re-staff or redeploy their staff accordingly. So fantastic business model change.

Karen Webster:                15:04                    

So they report earnings later in the week, so we'll be able to know exactly, quarter-by-quarter, what their progress has been. I agree with you.

Arvin Jawa:                         15:04                    


Karen Webster:                15:12                    

And it sounds like to do it well, what retailers need to understand is how to engage the consumer by addressing the pain points for which they want to use mobile order ahead to begin with. When I've used it in places where it's relatively new, there's always been that friction of cold food or there's been a mismatch in when I want to pick it up and when it's actually ready. So I know that it takes a little bit of trial and error, but it's like the kiosk experience; you have to be prepared to onboard the consumer at the same time the retailer's trying to onboard the technology, and those two things have to sync pretty quickly and pretty well.

Arvin Jawa:                         15:58                    

Yes, completely agree. I think retailers really need to convince themselves that they think it's good for their business, and once they've done that, they have to convince the consumer that it's a matter of demonstrating a value. What value is going to be provided to the consumer? Is that going to come in the time savings or is it going to come in the enrichment of the shopping process? If they can do that, they can create a value on both sides, for them and for the consumer.

Karen Webster:                16:26                    

So supermarket was probably one of, at least as I remember, one of the early adopters of self-service checkout. I found it to be useful for small numbers of items. For a full grocery order, boy, that was pretty tedious. And of course, with Amazon Go, they've taken that concept even further. Consumers like that. They like the option of being able to go in and go out. And almost more than a quarter, approaching 30% of consumers, say they'd visit those merchants more if they gave them self-service options to check out.


Again, it goes back to, in this case, it seems like a pretty straightforward implementation. Why aren't more grocery stores looking at that as an option?

Arvin Jawa:                         17:19                    

Yeah. It's a great question. I ask myself that when I go to my favorite local grocery store. They're fantastic. It's the best produce around. They're the nicest people around. Maybe that's why they won't do it because they love the interaction that they are able to give with their consumers from their store staff, but there are time where it's just not convenient for me to stand in line. You have a couple, you have a small basket, or the lines are long because it's a very popular grocery store. I'm not the only one around that likes the local grocer.


But again, it comes back to retailers determining the journeys for consumers. If they continue to just try to improve only those journeys that they have that are based upon a manned checkout station, then they lose the opportunity to create value for the consumer in different ways. If I can save or at least perceive that I save an extra few minutes in this particular shopping event because I could go and check myself out either through a self-checkout station, or through a scanning app on my phone, or through a personal self-scanning device that they may hand to me when I walk in the door, if any of these solutions can save me that extra few minutes, I'm more likely to come back to that store. Right?

Karen Webster:                17:19                    

Mm-hmm (affirmative).

Arvin Jawa:                         18:52                    

And so they have to recognize that the value proposition that's created through time savings or the value proposition that's created through perhaps an app that suggests to me that when I buy this kind of rice, I should buy these beans, these are the types of added value that consumers prefer and these are the things that create loyalty amongst consumers and the retailers or brands that they shop.

Karen Webster:                19:22                    

Well, I would think that in certain segments, and not to stick with grocery, but let's, the opportunity to bring people into the store is now, perhaps, more important than it's ever been. And creating those efficiencies in the physical footprint called the store would be things that, if I were running a supermarket, I'd certainly want to investigate pretty heavily.

Arvin Jawa:                         19:47                    

Yes, definitely. If you think about the space a retailer uses for a grocery store, it's massive. The real estate investment is incredible. So the staff has to be appropriately allocated to the things that are the highest value added activities. Frankly. Being stuck behind a cash register isn't always the most highest value activity at any given point in time. Sure, during peak periods, it's always necessary to have the right amount of staff. No doubt. But there are also times where that staff can be redeployed into helping stock shelves, helping serve consumers, helping in different ways within the store.


And so retailers have to think about how to leverage that physical asset. We think physical is a very, very important part of the retailing future. It's definitely not dead, as a lot of people tend to say, but instead, their physical space is evolving to be a more purposeful and useful arrow in the retailer's quiver, especially an multichannel or an omnichannel retailer. And digital isn't just a channel; it's as much an enabler or a fabric that binds the consumer journey, whether they're at home, or at work, or at the café, or the restaurant, or in the grocery store, or on their phone shopping.


What we see is that a consumer-centric design of digitally integrated or digitally enabled consumer journeys within the physical environment that are free of friction is what retailers really, really need to think about. And so if self-service is a component of that journey, we really think that retailers are going to win.

Karen Webster:                21:37                    

I also think that what you've said all along is that it's not a one size fits all, so it is about that customer journey, and then adapting the self-service technologies accordingly. So I don't know, do you think that retailers have this mental picture of what it means to have self-service, and in their environments, they think that either won't work because of store format or the type of store, and they're not opening their minds to think about things like scan-and-go in department stores or the Amazon Go experience in smaller formats?

Arvin Jawa:                         22:15                    

Yeah, that's a great, great question and a great observation Karen. I think it's frankly, it was at the heart of what we ourselves were looking to understand about the US market. What is it that's holding back consumers in adopting or more importantly, retailers, in deploying self-service technologies in the US at clearly what's a lower rate than the rest of the world? We're a global organization. We see what's happening in Europe, we see what's happening in Asia, and those parts of the world are definitely much more advanced in their adoption of self-service technologies.


Some of the stats you've mentioned and some of the stats that are within the study are about consumers not being compelled to increase their frequency within a given retailer, even if self-service technology is available because they just don't see the value. I think you might be right in that retailers probably have a preconceived notion that, "Self-checkout is this and it must be this."


When we look at it from the perspective of the journey, then the technology falls to the background and it becomes only the enabler of the journey that we want to create. And so I think your point is great. What we see in Europe, for example, we have some data from our own implementations that European customers, 53% of consumers prefer to use self-checkout in stores and 21% of retailers plan to actually increase the density of their self-checkout deployments. In other words, they already see the value. It's more than just self-checkout in a grocery store kind of solution. These are personal self-scanning, they're scan-and-go with the mobile device, they're kiosk solutions.


So I think if you open up or reframe the mind to say, "I really want the consumer to have the best experience possible and that experience can be this or that," that's when you start to see retailers looking at this as a really positive way for their consumers to shop.

Karen Webster:                24:34                    

I would agree. And in some of the other studies that we've done, particularly in retail environments, apparel and accessories stores, consumers want the ability to scan-and-go because stores don't have has many people wandering around for help, and consumers are always time pressured. What they want is to be able to buy what they want when they see it. Certainly retailers, particularly now, should be thinking about how to enable that efficiently so that consumers walk out with something in a bag rather than walking out without having purchased anything at all.

Arvin Jawa:                         25:12                    

Absolutely, absolutely. I've spent a lot of time in the apparel and accessories field and actually, I think there's a really fascinating use case around self-service technology with a company, I'm sure you've heard of it, Rent the Runway. Internet pure play, right?

Karen Webster:                25:12                    


Arvin Jawa:                         25:27                    

A subscription retailer who's really banking on the sharing economy. Fantastic business and interesting model. They've opened up, I think, about five stores in the US and recently deployed a scan-and-go solution in their stores.

Karen Webster:                25:44                    


Arvin Jawa:                         25:44                    

You'd say, "Five stores? Can't be that big. Do we really need self-service technology?" Well, the fascinating thing is that they looked at the journeys that the women who were shopping their stores or who were part of their club, they found that women were actually coming in before work, perhaps on the way from the gym or the way to the gym, and using that time period to trade out the clothes that they had gotten the week before and that they wanted to actually trade out today, so that they could wear something new to the office on that very day.

Karen Webster:                25:44                    

Oh really? Interesting.

Arvin Jawa:                         26:25                    

And so as a result, they were time pressed in their journey into the store location.


They found that by creating some very, very simple self-service kiosks that had a scan-and-go type technology that was integrated to the mobile app, it allowed these consumers to very quickly help themselves, be able to return the items that they were bringing back, and take the number of items they were going to take on that day, and get on right away without ever interfacing with any of the store associates. So really, really fantastic utilization.


Perhaps it's the mindset of having been a digital player before a physical player, but it really speaks to the idea of looking at what it is your consumer is trying to do in their daily life and specifically, in their journey with you as a retailer or as a brand, and trying to improve that in a way that gives them some perceived value. In this case, time saving.

Karen Webster:                27:30                    

That's great. Before we wrap, what was the one thing or one observation from this study that surprised you? Was there something that you sat back in your chair and said, "Huh, I didn't expect to see that"?

Arvin Jawa:                         27:49                    

Yeah, you know, I would say that this is both something I didn't expect and something that I did expect. There was a portion of the study which was related to the payment method, the various payment method would drive user satisfaction or frequency were most utilized by the members of the surveyed audience. I was not surprised by the utilization of debit, credit, and cash, especially in the US economy. You expect that. We tend to be a more credit and cash-driven society in retail.


But I was really surprised by the very, very low utilization of tools like Google Pay or Apple Pay. That was something that was really, really fascinating to me. I would have expected, especially for consumers who were using more, what I would like to say more advanced technologies like self-service, either mobile ordering or scan-and-go or self-scanning or a self-checkout, that they would have a higher propensity to utilize newer digital payment mechanisms. But in fact, we see the opposite.


I couldn't really explain it, but it was definitely an ah-ha. But I guess it mimics a lot of what we see in the rest of the world. We definitely see that in Asia, where digital payment is more highly utilize than in markets like, say, Germany or in the US which tend to be more cash or credit- driven, we see that the self-service technologies in Asia are also dominated by the utilization of WeChat or Alipay as the preferred mechanism. So perhaps this is more aligned towards the cultural norms than it is to the technology deployment.

Karen Webster:                29:50                    

Yeah, I think it also has a lot to do with acceptance, right? Consumers, if they're not sure and they're time pressed, are going to use a payment method that is reliable, maybe even on file in their app, and that isn't necessarily one of the alterative players, at least today.

Arvin Jawa:                         30:09                    

Agreed, agreed.

Karen Webster:                30:12                    

Interesting. Well Arvin, thanks so much for your time. Great conversation, great insights on an area where there's certainly a lot of familiarity from both consumers and retailers on the value, but perhaps an opportunity to rethink in the context of the customer journey and what new technologies exist at the intersection of self-service and mobile to make that journey more favorable and enriching for both parties.


I really enjoyed it, the conversation. Thanks again.

Arvin Jawa:                         30:43                    

I did as well. Thank you Karen. Great to speak with you.

Karen Webster:                30:46                    

Thank you. Buh-bye now.

Amy Lombardo:                30:47                    

Find other episodes of "COMMERCE NOW" on iTunes or your favorite listening channel. Until next time.