The impact and control of self-checkout shrinkage

Retailers experimenting with self-checkout should be implementing strategies to minimize stock loss so that they can better achieve operational benefits and improve the customer journey, according to a report.

The ECR Community Shrinkage and On-shelf Availability Group (OSA) and NCR have published a comprehensive report that assesses the potential impact of self-checkout (SCO) technologies on retail loss and provides best practices and guidance on how to address and balance risks.

“Retailing is becoming ever more dependent upon a host of technologies, many of which are increasingly focused upon improving the customer journey,” said John Fonteijn, chair of the ECR Community Shrinkage and On-shelf Availability Group. “This report will help retail organizations to continue to reap the benefits that self-scan technologies can bring while doing so within a sustainable business model.”

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Retailers count their stock loss typically as a percentage of their sales, which, according to a prior ECR report, is about 0.67% of grocery retail sales. The new report from ECR and NCR, Self-Checkout in Retail: Measuring the Loss, suggests a typical retailer can experience an increase in stock loss of one basis point for every 1% of sales that go through fixed SCO machines. For instance, a typical store with 25% of its sales value going through fixed SCO could see additional stock losses of 0.25% of sales value.

Stores using scan-and-go technologies could see an increase of between 0.7 and 10.4 basis points of additional loss for every 1% of sales processed. In the study, the average utilization rate for scan-and-go was 2.8% of sales value, suggesting additional stock loss of between 0.01% and 0.29% of sales value.

The report goes on to consider ways in which SCO technologies can be controlled, including a range of emerging technologies. The report also underlines the importance of monitoring data on the risk of loss relating to SCO as well as adopting a more joined up approach to SCO management and control. See the full report here.

The report is based on data collected from 13 major retailers operating in Europe and the United States, including analysis of: 140 million scan-and- go transactions; 17 million transaction audits; video analytics of fixed SCO transactions; and comparative stock loss data from thousands of retail stores.

This story appeared at StoreBrands.com.