The trend towards a reduction of human interaction in commerce as a direct result of advances in...
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The trend towards a reduction of human interaction in commerce as a direct result of advances in
digital media technologies: a case study of the grocery retail
industry and self-serve checkout in Yakima, Washington.
Foundations for grocery self-serve
checkout
Gas Station:Self Serve & Pay at the Pump
Perceived Advantage (Customer Gratification):
SpeedSavings
Privacy
Banking:ATM (Automated Teller Machine)
Perceived Advantage (Customer Gratification):
Eliminate waiting in line24hrs access
Privacy
Travel:Ticket Kiosks
Perceived Advantage (Customer Gratification):
Eliminate waiting in lineConvenience
Privacy
Universal Product Code
UPC (Universal Product Code): A universally applied code consisting of a series of 12 vertical bars affixed to consumer products or inventory items. This code is consistently readable at a variety of angles via a code scanner. The code includes information on the product’s origin, content, and pricing. The first six digits refer to the company, and the following five digits refer to that company’s particular product. There is a final “check digit” to complete the twelve digit code.
Operational Definition
YakimaWashington
As of 2000 Yakima Wa State USA
Population 71,845 5,894,121 281,421,906
Median Age 35.3 35.3 35.3
HS Grad + 69.5% 86% 80.3%
Unemployed 7.2% 4.1% 3.7%
Media Household
Income$29,475 $45,776 $41,994
Population Demographic Comparison
GroceryRetail
Industry
Operational Definition
Grocery Industry: “This industry comprises establishments generally known as supermarkets and grocery stores primarily engaged in retailing a general line of food, such as canned and frozen foods; fresh fruits and vegetables; and fresh and prepared meats, fish, and poultry.” Adapted from U.S. Census Bureau, Current Business Reports, Series BR/02-A, Annual Benchmark Report
Grocery stores employ in excess of three million
employees(Budd and McCall , 2001).
“The consumer makes an average of 2.2 visits to the
supermarket weekly, including 1.7 visits to the ‘primary store’”
(Seth, 1999)
Grocery Retail Industry 2002 Annual Sales
$442,971,000,000second only to Auto sales in U.S.
retail economy (U.S. Census Bureau)
Self-serve Check-out: A grocery retail experience in which the customer collects, scans, bags, and pays for their own purchases independent from grocery retail employees.
Operational Definition
Groceries:Self-serve Checkout
Perceived Advantage (Customer Gratification):
Eliminate waiting in lineConvenience
Privacy
Four Self-serve checkout lanes cost $80,000 to install, require one store employee to oversee and pay for themselves in 12-
18 months
1 billion self-serve transactions at grocery and other retailers in 2002, double 2001
1967
1st
AT
M L
ond
on
1st
AT
M U
S N
ew Y
ork
1973
1973
UP
C a
dop
ted
1974
1st
Sca
nn
ed it
em
(wri
gley
’s g
um
)
1951
Exp
ress
Dai
ry s
elf-
serv
e,
Lon
don
1984
1st
self
-ser
ve
chec
kou
t (P
ubl
ix
Supe
rmar
ket,
Atl
anta
)
1993
Por
tab
le P
erso
nal
S
hop
per
(H
olla
nd
)
2002
29%
of
Gro
cery
re
tail
ers
offe
r se
lf
serv
e ch
eck
out
Benefit (gratification) for Retailer
This industry is an “intensely competitive, low margin, high-
volume industry.” (Keh, 1998).
“Nationwide a person has to spend $15 on a transaction ‘for the retailer to break even’ when
a cashier is involved … in California that break even is
closer to $25 per transaction.”
Lower wagesLower shrinkage
Increased inventory management
ProfitProfit
Profit
What would convince you to do the work others normally
would do and receive no pay or discount incentive?
The Future in Grocery Retailing
Adoption rate of self-serve checkout
% of grocery retailers with systems installed
Percent
Year
1984
20
30
40
50
60
70
80
90
100
1985
1990
1999
2002
2005
10
Projected
Current
Introduced
RfidRadio Frequency
Identification
Biometrics
“Scientists and engineers had accelerated research and
invention to an unbelievable pace, conjuring up machines capable of taking over more
and more human roles.”