Retail Checkout Lane Strategies

I read an article in the Wall Street Journal (Thursday Dec 8th, 2011) breaking down the physical logistics of the checkout lane; the science and strategy is very interesting and provides for incremental opportunities for processors. 

The fundamental premise is that retailers want to get the consumer through the checkout lane as fast and as conveniently as possible. This is driven by the fact that many factors may lead to shopping cart abandonment including the time it takes to get to a cashier, the consumer profile, actual vs. perceived wait time, and the overall checkout experience.

Research has shown that customers’ perceived wait time matched actual wait time in the first 2-3 minutes; however, it doubles after that…so if a customer actually waits 5 minutes, their perceived wait time is 10 minutes. Moreover, research conducted by INSEAD international business school indicated that customers expressed dissatisfaction if the lane moved slowly; their dissatisfaction was not only with the lane, but sometimes manifest itself with the store and the brand. Conversely, customers ex-pressed positive feelings about the experience and the store if the lane moved swiftly.

Retailers may employ one of several tactics to make sure customers waiting in a checkout lane are occupied or distracted until they reach the cashier; one such tactic, dubbed ‘lane chock-a-block’, lines the lane with inexpensive impulse items such as magazines, specialty sodas, or glitter covered piggy banks (think of Fry’s Electronics and Best Buy). Another tactic is to prescan shoppers items (Costco), or have checkout agents roaming in the store offering checkout services (Apple). A third tactic is to provide some sort of entertainment for customers especially in retail stores catering to kids such as Toys R Us.

Innovators such as Paypal, have opportunities to introduce innovations to cut down the actual and perceived wait time; such as prescanned shopping cart on a mobile device, auto applied coupons and discounts so that the consumer is not fussing for paper coupons, e-receipt capability to cut down on paper printing, and an integrated checkout leveraging all these capabilities.

Specifically, PayPal’s value proposition in this payment ecosystem highlights its unique ability to be a tremendous enabler for an exceptional checkout experience; working in tandem to complement and improve retail best practices aimed at delighting our customers.

Additional references: 

http://online.wsj.com/article/SB10001424052970204770404577082933921432686.html?KEYWORDS=find+the+best+checkout+line