Self Service – Where is it Headed?
Previously, at IHL we have written about the historical changes in the POS landscape, as well as where we saw POS heading in the future. As part of that discussion, we briefly addressed the expectation that Self-Checkout systems and Kiosks would continue to grow in the retail landscape. Certainly, Self-Checkout has made a significant impact upon retail since widespread adoption began in 1999, and the effects are seen in some of the largest retailers on the planet. Kiosks, too, have changed the manner in which consumers order prepared foods and deli items, rent DVD’s and obtain airline boarding passes, to name but a few.
Our desire today is to look forward a little bit to where said systems might be headed. Before we do, however, let’s look briefly at the historical growth in North American shipments of Self-Checkout systems, arguably the most established form of self service technology (outside of pay-at-the-pump and ATM’s) in the industry. The tremendous growth in the early part of the 21st century corresponds with the rapid adoption by a handful of very prominent players. The general direction of the decline in growth rate since then is entirely normal, allowing for rapid initial growth and a gradual (or otherwise) fall-off in growth as more systems are deployed and a certain level of penetration is attained. The economic malaise of 2008-2009 pulled the going negative portion of the curve in a few years. What is not widely known is that the growth rate for these systems actually increased each year from 2005 – 2007. This leaves us with the impression that there is still interest in Self-Checkout systems going forward, and we expect it to be in the areas of smaller footprint units for non-traditional Self-Checkout users and replacement units for traditional users.
Concerning kiosks, there is no lack of interest there, as evidenced by, among other things, the efforts of Redbox and NCR (note especially NCR’s kiosk-oriented acquisitions last year) to continue to dot the land with their DVD rental kiosks. Airline kiosks continue to be popular, and the figure that continues to be tossed about is that 50% of all airline passengers check in using a kiosk (as yet we have no definitive figure on the splits for web- and mobile-check in). Informational and way-finding kiosks continue to appear, and unique solutions such as wine kiosks continue to assist consumers.
So, everything sounds great for self-service technology, right? Don’t be too hasty. In a recent study we conducted, fully twenty percent (20%) of responding retailers indicated that they already use some form of mobile ordering, and 16% use some form of mobile stock checking. In other words, these retailers are looking beyond their current investment in self-service technology to the consumers own phone or handheld device. The rationale makes perfect sense; a recent Pew Research Center study indicated that 83% of respondents in the US had a cell phone, Blackberry or iPhone. As consumers get accustomed to using the myriad features and applications available for these devices, they will be looking for those retailers who are willing to accommodate their desire to use those features and applications. Retailers will do well to make those accommodations.
Where things will get really interesting is in the case where a retailer decides to leapfrog a given technology in favor of embracing a mobile outlook. This is already happening in certain developing countries. How that pans out here in the US remains to be seen, but we expect there to be some brand new partnerships that arise on the vendor side of things.