Is Giant Eagle’s Forced Self-Checkout CRM Tactic Smart?
Through a special arrangement, presented here for discussion is a summary of a current article from StorefrontBacktalk, a site tracking retail technology, e-commerce and mobile commerce.
Some Giant Eagle stores have started blocking access to self-checkout for anyone other than loyalty cardholders while they are using their cards. It’s an interesting CRM move, in that it simultaneously discourages self-checkout usage but also gathers far more information about those who do opt to self-checkout using their cards.
For the last couple of years, retailers have had this intense love-hate relationship with self-checkout. Chains have touted "customer service" as their reason both for yanking the self-checkout units out and for adding more of them. Higher theft rates have been reported in some stores with self-checkouts and not others.
But the idea of requiring frequent shopper cards to self-checkout is a new twist. Chains — and that’s triply true for grocery — have always struggled getting shoppers to use their loyalty cards. To be fair, many of those difficulties have been self-inflicted. We’ve seen many associates offering to scan generic loyalty cards to give the discounts to non-cardholders. Even worse, we’ve seen some associates stop customers trying to pull out the cards, saying, "That’s not necessary. The discounts are being added automatically."
By forcing all self-checkout shoppers to use the cards, Giant Eagle could be testing how shoppers react to the cards when they are mandatory. Will they rebel or passively comply? If they comply, could requiring loyalty cards at other lanes be a possibility? Or is the thinking less severe, with merely the hope that by forcing people to use their cards in some parts of the store, they’ll start using the cards in the entire store voluntarily?
In other words, once shoppers get used to the extra discounts, instant recall notices, and other loyalty card perks, will they stick with it always?
Discussion Questions
What do you think of Giant Eagle’s move to restrict self-checkout use to loyalty cardholders? How do you think consumers will respond? Are other merchants likely to follow Giant Eagle’s lead?
Understandable, but risky. Sure everyone in retail wants as much information about their customers as possible, but forcing someone to use a loyalty card may give to access to some customers’ information while to denying you access to other customers’ money.
The question is, why they are instituting this policy in only some locations? Were these stores experiencing higher shrink than others? Have they found that they “need” more information about the purchase patterns of those who use self-checkout to see if they need more or fewer self-checkouts? Is this a test to see what happens before they roll it out to all stores?
I don’t see any other retailers rushing to try this tactic—that is unless they learn that it was successful for Giant Eagle.
Customers are not stupid. In reality, loyalty cards have no benefit for consumers. They scan their card and hope they will get a few sale items almost as low as Walmart’s prices and rarely lower than Aldi’s. Why not just go to Walmart, get the exact same thing, pay less, and not have be hassled with a loyalty card?
The real purpose of the loyalty card is to make customers forget that the store they are shopping in is premium priced. Nearly every retailer that has a loyalty card is a premium priced operator. The worst thing a retailer can do is to make up lots of restrictions on shopping. The fewer “no you can’t do this” messages the better. Loyalty cards, limits, double coupon restrictions, etc; Walmart solved the gimmick hassles by just not having any. You will find that the highest sales per square foot operators do not have a loyalty card and it’s not coincidence.
I would prefer to view this change less in terms of forced card usage and more in terms of enhanced customer service. All food shopper research identifies “speed of checkout” as an important variable in determining customer service and store choice decision making.
I perceive this decision as a customer-centric use of continuity of purchase cards beyond the mere use as a conveyance of price discounts. The airlines which are mostly woeful (though getting better) on customer service have effectively used the valued frequent flyer perk of separate check-in and boarding lines, upgrades, etc. based on one’s level of flying with the particular airline. Such benefits not only increase customer preference and behavior for the airline, it also reduces brand switching, something that would be of benefit to all merchants as well.
In a word? Absurd! First of all lots of people carry loyalty cards who aren’t particularly loyal. Second, denying access to a perceived convenience isn’t a good formula for encouraging loyalty. Third, I doubt their data management systems are so sophisticated that this kind of a move makes sense and—if they are—the move is unnecessary.
I know how I’d respond if I came in for a couple of items and couldn’t use the self-checkout. I’d never come back.
Will other retailers follow suit? Hard to say. The prospect of mass suicide never stops the lemmings….
Great idea if you want to get rid of the self-checkouts (and get rid of some customers). Nothing says “I’d like to have a relationship with you” like forcing the issue. The loyalty card is for the shopper, not the retailer (okay, WE all know that’s not true, but don’t let the shopper ever know that).
I understand the strategy behind restricting self-checkout to loyalty card holders, but I think it’s going to cost them some business. Not every consumer, not even frequent shoppers, all like to carry loyalty cards or use them. And for that reason, I think it’s a misguided strategy.
The self checkout for only loyalty card users will be a short lived thing if this program is going to be successful. Just like the “under 10 items” lines, there will be a line for non loyalty customers to check out in the future. How can you restrict the line usage without upsetting the customers who, for whatever reason, do not carry loyalty cards? The industry is waiting to see what works before jumping on a particular bandwagon.
“…forced loyalty…”???
I think we’ve hit a new low in retailing. Why don’t we just go ahead and require “feigned fealty” as well. Moves like this suggest we have already decided we are lord and master of the consumer anyway.
At least it indicates that we have finally given up on the faint promise of engendering any sort of actual consumer loyalty with these cards.
Maybe that is progress.
Really? What a great way to insult customers! I guess the assumption is that they are not good customers because either do not have a loyalty card or did not carry it that day. Is this really an incentive for them to get one or remember to carry it? I think not.
If I go to the self-checkout to save time and find I have to fill out an application to save time I will not be happy. If I have forgotten my card and can not use the faster checkout choice, I will not be happy. What is the upside of doing this?
One of the benefits of belonging to any loyalty card program is the special treatment and perks you may receive. Most grocery retailers have opted to treat everybody about the same.
When it comes to the checkout, they actually treat their best customers the worst. The customers with full carts are forced to wait in long lines while the customer buying 2 items gets to use the quicker express line.
In our Front-end Focus checkout studies, we learned that many shoppers today prefer the self-checkouts, especially when they have just a few items. In fact, access to a quick, simple checkout process can be a real perk. There is some sense to special lanes designated for “A” customers.
However, this must be positioned as a perk rather than a penalty. If it is seen as Giant Eagle forcing participation in the loyalty card program, it will seem self serving rather customer focused.
I guess Giant Eagle didn’t read the customer-centric dialogue from last week. Here is a decision made solely for the benefit of Giant Eagle and not at all for the benefit of the customer.
It does answer the question of the value of self-checkout. I have mentioned several times regarding self-checkout at the local Home Depot that customers will stand on line at self-checkout while manned aisles were empty. Well, in a recent trip to Bentonville, I saw the same phenomenon in Walmart. Many customers obviously like it.
Which brings us to “How will consumers respond?” If they are not loyalty card holders at Giant Eagle and like self-checkout, they will go someplace else. Who came up with such a ridiculous idea?
Wouldn’t it be interesting to sit down with the Giant Eagle folks and find out the true motivation for doing this? My first reaction to this story was “they’re probably being eaten alive with theft” and are trying to limit self-checkout to customers who won’t steal. Let’s revisit this topic in six months and see what their results are.
I’m with Ryan on this one. Retailers have GOT to get over themselves!
This reminds me of one of the stupidest customer loyalty incentives since the beginning of time…and of course it comes from the airlines.
“Preferred” customers go into the plane via the preferred lane which is simply the filthy red carpet located approximately 4 inches from the filthy blue carpet where the unwashed peasant travelers line up. Not only that, but by my calculations, the preferred route for the elite customers is actually longer than the one for commoners. What I would give to sit in on the Customer Relations Committee as they make such brilliant decisions.
Thinking you can build relationships with some customers by diminishing or restricting other customers is simply dumb, dumb, dumb. Customers are more likely to be loyal to each other than they are to the vendor.
Dumb idea. And I did want to say that retailers’ issue with their own loyalty cards in the past has been that they don’t actually DO anything with the data they gather, not that they can’t get customers to use them.
I am one of those “please use the house card” people, but of course, I shop at Publix now, so I don’t even need to think about it anymore (except at CVS where I just plain refuse to give them any more info than they already have about me).
Giant Eagle is moving in a weird direction, and they keep doing me favors with these moves. This isn’t and shouldn’t be a VIP line like Las Vegas Platinum Card holders. The Ivory Tower thinkers in many big companies make me wonder how they got there in the first place, as this policy is discriminating to me. The card holder info, can be gathered at any checkout, so why restrict the self checkouts for this purpose? It makes no sense to me, IMO.
Others on this panel are correct; forget the cards, and give everyone great value plus great service, and see what happens. Technology is great, but not the only way to make your business grow.
The article doesn’t address the thwarted consumers and their reaction to being punished for not having or using their loyalty card. They have to move to the back of the line at the full service checkout, the very thing they were trying to avoid. My concern regarding a downside to this initiative is the ill will that might be generated for Giant Eagle.
I’m not confident that consumers will transition (be trained) from using their loyalty cards on their own at the self-checkout to using them at the full service checkout. But that’s just an opinion. Perhaps Giant Eagle has looked into this behavior modification.
If those shoppers who were turned away come back to that store with the intention of using the self-checkout it does seem that they may choose to have their loyalty cards with them and therefore use them more often. But I’m wondering if the self-checkout shopper consistently uses the self-checkout and therefore is not as likely to be at the full service anyway…which I believe is the overall goal of the new practice.
I think much of the conversation here assumes that Giant Eagle is choosing between (a) requiring loyalty cards to use self-checkout, or (b) allowing anyone to use self-checkout. What if, instead, they were choosing between (a) requiring loyalty cards for self-checkout, or (b) killing self-checkout for everyone?
Perhaps Giant Eagle is having a problem with shrink, and the card is a way to keep better tabs on usage. Perhaps they want to offer people buying few items in quick trips a nice incentive to spend a little more and stock up.
I agree that, on the margin, this will discourage the quick-trip, non-loyal (in the business sense, not in the “do they have a card or not” sense) shopper from stopping at a Giant Eagle on the way home from work, but losing that type of trip from that type of shopper may not be a concern (or may even be desired, if those customers are not profitable).
When the enemy demanded the surrender of the 101st in the Battle of the Bulge, the American General responded in one word—”Nuts!”.
What do I think of the move by GE to restrict SCO to loyalty customers? Nuts!
How do I think consumers will respond? Nuts!
Are others likely to follow? No, they would be “Nuts!”
Grocery self-checkout for me is a struggle since I view it as a cost saving efficiency move rather than customer experience improvement. Unlike other store formats, grocery is the messiest to do self-checkout for me. If the customer is already viewing self checkout as “retailer is saving money” rather than “help me check out faster,” than enforcing CRM on top of doing self checkout just seems to invite dis-satisfaction.
I think this is more about preventing shrink than anything else. And it is one of the problems with self-checkout that any competent retailer should have anticipated. David Livingston (as is so often the case) nails it.
Just to chime in with the crowd, this is stupid! When you discriminate, the reaction is generally bad. I would leave and never come back!
How many customers with no card (and no desire to get one) will simply be confused by this and walk from the store without purchasing anything?
I only use the loyalty card if I am getting a discount. Otherwise, why should I waste my time punching in my phone number? No reason.
Ironically, I think these stores make a nice little chunk of money off of people who have no loyalty card and go through self checkouts with sale items and carelessly pay full prices (vs. going to a regular checkout where a clerk is likely to use a house card).
I used a CVS Self Checkout recently. It automatically put the house card in for you at the beginning of the order. Then, when you scanned your own card (which I did, to get the Extra Bucks associated with the purchase) it voided off the house card entry. This is the first time I’ve seen a loyalty card just automatically programmed….
I recently shopped a Giant Eagle this past week in Cleveland, OH. I foolishly chose the self checkout option as the attended lanes were backed up. Imagine my surprise, as a visitor to town, when I could not check myself out. Of course, the attendant was not handy so there I stood as the line backed up behind me. Finally the attendant did notice me and she assisted (very politely which made up for the inconvenience). I don’t recall seeing signage about needing a card. No one is going to look for it anyway when they have checking out on their mind.
I think that forced use of customer loyalty cards at self-checkout is a smart idea. Customers may not like this idea because some customers do not care to have a loyalty car in the first places because the cards track their purchases. The main reason for the policy of mandatory use of loyalty cards at self-checkout is actually security. Yes, customers go through self-checkout and simply walk off the premises without paying for their purchase either because they are in a daze, in a hurry, or trying to intentionally get items for free and scam the company. If the customer is forced to use a loyalty card at the beginning of their order, then the company can track their information to inform them that they have not paid for their purchase.
You will also notice that the self-checkout is also limited to be open for only certain times of the day for the same reason. A clerk can catch the person at fault while they head out the door. People need to pay for their purchase and double check to be sure that their credit card and money have actually gone through on their transaction.
Every place of business that has self-checkouts is vulnerable to scams and people “forgetting” to pay their bill. I believe that some companies may ask to see your paid bill as you walk out the door if they do not make use of loyalty cards yet utilize self-scans.