Queued up in a bank teller’s line to get some cash lately? Had a gas station attendant pump your gasoline? Probably not. These days most of us handle such tasks by ourselves, and feel quite comfortable doing so.

The process of checking out groceries in the supermarket appears to be headed down the same path — squarely in the direction of do-it-yourself. Most shoppers — 90 percent, according to a study by Franklin, Tenn.-based IHL Consulting — have tried self-checkout.

Not surprisingly, when a shopper is busy scanning their own groceries, the result tends to be fewer impulse purchases at the front-end of the store. According to the Front-End Focus Study conducted in 2003, only 12 percent of self-scan shoppers select items for purchase at the checkout vs. 20 percent who make a purchase at cashier-staffed lanes.

Candy/gum/mints account for 32 percent of total front-end sales and nearly 34 percent of front-end profits in the supermarket, according to the Front-End Focus Study, so it’s not hard to see that the impact of self-scanning on the candy category is potentially dramatic.

Ray Jones, managing director of Northbrook, Ill.-based Dechert-Hampe & Co., the consulting company that conducted the industry-supported study, has done some of the math.

Installing a pod of self-checkout lanes usually requires eliminating three or four traditional checkout lanes. For each lane that is taken out, potentially $8,000 in annual confectionery sales is lost, says Jones. Thus, a store that eliminates four lanes stands to lose up to $32,000 in annual confectionery revenues if the aisle is un-merchandised.

Retail consultant Cameron Cloeter puts the current negative impact of self-checkout at about 10 percent of total front-end supermarket sales, which are estimated at $6 billion by grocery industry sources.

It doesn’t have to be that way, claims Cloeter, president of Impulse Marketing Co., Long Valley, N.J., a company he created to provide vendors and retailers with a resource for increasing productivity at the checkout. Cloeter has a unique perspective on front-end merchandising thanks to a career track that includes experience with several of the key front-end players — confections (Masterfoods), magazines (Time-Warner) and fixture supplier/magazine distributor (Source Interlink).

The most obvious problem is the fact that most self-checkout locations simply don’t have effective merchandising solutions for candy and gum. Because the decision to install self-checkout lanes in a supermarket is frequently made by the operations department, merchandising this section of the store often comes as an afterthought.

Cloeter says he’s seen many cases in which traditional checkout racks were removed without the knowledge of the retailer’s merchandising team. When it comes to merchandising self-scanning checkouts, “we’re playing catch-up,” he adds.

“My opinion is that items that should be heavily merchandised are gum, candy, snacks and beverages — and not general merchandise and only the top-selling weekly magazines,” says Cloeter.

“Customers are working when using self-checkout and simply do not have the disposable time when compared to a traditional checkout lane to make a complex purchase decision,” he continues. “As such, criteria for self-checkout items should be that the item is frequently purchased by a broad range of customers, meets an immediate need (hunger, thirst, oral refreshment), is instantly consumable, the decision to purchase is short, and, of course, meets the retailer’s profit requirements.”

Candy, gum and mints — as well as snacks and beverages — satisfy those requirements. Most general merchandise items, however, do not, a fact documented in the Front-End Focus research.

In the case of magazines, shoppers usually don’t make a purchase decision until they’ve scanned the issue a bit, Cloeter observes. However, he does make an exception for the top-selling weekly magazines like People and US Weekly, which he says should be included in an ideal self-checkout fixture layout along with candy, snacks and soft drinks. Despite the current challenges with self-scan set-ups, the consultant believes that there is reason for optimism. Small-scale trials have demonstrated that — with optimal merchandising — self-scan checkout sales can be boosted. In fact, according to the Front-End Focus, the percentage of consumers who make an impulse buy at self-checkout increases from an average of 12 percent overall to 14 percent when the aisle is well-merchandised.

Cloeter goes so far as to say that he sees the potential for self-scan checkout sales to reach parity with sales in traditional, staffed lanes — provided more research is conducted and optimal merchandising configurations are established and implemented. As shoppers become more accustomed to the checkout process, they will return to purchasing impulse items, if “given the opportunity,” he reflects. n

Supermarkets are moving full-steam ahead into self-scan. Fifty percent of grocery retailers surveyed by IHL Consulting Group, Franklin, Tenn., reported that they plan to install self-checkout systems by June 2006.

Self-checkout sales will grow by 88 percent to reach more than $240 billion this year, IHL forecasts.

If you are using an endcap at the head of the self-checkout aisle, it should be no taller than the self-checkout installation. A fixture that is too high reduces visibility and may lead to increased shoplifting.

An island display fixture placed between two checkout lanes should be even with endcaps to best manage customer traffic flow.

An island display fixture also requires 13 feet of open space between the fixture and the checkout. That allows room for two grocery carts — necessary so that a shipper can move a cart past the first checkout station to the second one if it opens up while the shopper is waiting in line.

Source: Front-End Focus Study

The front-end/checkout area of the store is valuable real estate — even more valuable than many retailers realize, contends Cameron Cloeter, president of Impulse Marketing Co., Long Valley, N.J.

"It's one of the highest-volume, most profitable areas of the store — looking at it in terms of sales per square inch — yet it's the least understood," says Cloeter.

Part of the problem stems from the fact that several different product categories — candy, gum, snacks and magazines — are housed on front-end fixtures, and "nobody has their arms wrapped around the whole thing," says Cloeter.

In a typical checkout fixture, magazines account for about one-third of sales, but get roughly half of the space allocation, Cloeter continues.

"The reality is that the magazine people are more dominant players at checkout than soda or confectionery; they've been at it longer, and their sales force understands it better," says Cloeter. "That's why they get the better position — over the belt and at the front-end facing the checkout."

Rack configurations often are set by a retailer's non-food category chief, working in tandem with magazine vendors. The candy buyers tend to be brought into the process too late in the game, when rack configuration is already set. "At that point, you've already built your house," says Cloeter. "Once you build the house, you've got to live with the size of the rooms. You can't put a box of Snickers in a magazine pocket.”

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