Why do retail stores still have cash registers?

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Apr 07, 2015
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Through a special arrangement, presented here for discussion is a summary of a current article from the IMS (Integrated Marketing Solutions) blog.

Armed with smartphones, consumers have literally become the new POS (Point of Sale). Yet, retailers are still trying to herd them through checkout lanes.

When the consumer can purchase anywhere and anytime, there are a multitude of reasons why retailers can and should rip out POS registers and checkout lanes in stores:

  • Checkout lanes take up considerable floor space.
  • Security and theft prevention could remain in place with sensor scan at the exit door.
  • Cashiers could be redeployed as associates helping consumers on the floor.
  • Associates can also check out consumers in-aisle with smartphones and card readers.
  • Consumers could checkout/purchase on their own smartphones with an app.
  • Electronic receipts can be e-mailed to consumers, or printed at portable printers.
  • Portable POS devices can still scan bar and QR codes for prices and inventory.
  • More sales might result if purchases were made in the aisle while looking at products.
  • How many consumers desire/need to pay in cash?

While the centralized checkout lanes have been a highly efficient system for stores, what are the actual costs in terms of lost sales? How many consumers abandon shopping carts because they don’t want to wait in line, especially during peak holiday periods? What is the cost in terms of consumer experience and satisfaction?

Apple’s store format is a case study in how an omnichannel retailer has changed the consumer experience by ripping out checkout lanes to enable purchase anywhere on the floor with no wait times.

One could argue that removing POS registers and checkout lanes will not work in a store like Walmart. Really? Why not? With more widespread adoption of RFID tags, an individual can scan a whole cart at once. RFID could also establish an added layer of theft prevention out of the front and back doors.

What retailers have not yet realized is that it will not be their choice to make. The consumer is now the POS, not the store or web site. Today’s consumer can now decide where to purchase, how much they are willing to pay, how to pay, whether they would like to ship to their home or pick up in-store.

Retail store survival will depend upon providing an experience that is consumer-centric and adds value to the customer first and foremost. The best place to start redesigning both the consumer experience and the profitable store of the future will be to rip out the registers and checkout lanes.

Should cash registers and POS terminals be phased out? Do you still see more value in keeping them rather than abandoning them? What obvious and less obvious hurdles do you see around widespread mobile self-checkout?

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26 Comments on "Why do retail stores still have cash registers?"


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Adrian Weidmann
Guest
4 years 9 months ago

Cash registers are an electronic dinosaur of the retailer planogram. The shopper is quickly becoming the mobile PoS. The rapidly falling prices of product RFID tag technologies in collaboration with the e-payment capabilities of mobile devices is the oncoming asteroid that will render the cash wrap as we’ve known it extinct. This is what shoppers expect. After experiencing the Apple Store, the frustration of the traditional cash wrap is painful.

I experienced a hybrid checkout recently at Costco. A number of associates were scanning items with a mobile scanner and the transaction was delivered wirelessly to the cash register to conduct the payment. The reaction to all the shoppers around me was relief and admiration that technology was actually helping them conclude their journey.

Paula Rosenblum
Guest
4 years 9 months ago

It sounds great in theory to say that there’s no need for registers or checkout stands, but it tends to ignore realities. Other things happen at checkout stands:

  • Items are bagged or hung.
  • Produce is weighed.
  • Security tags are removed.
  • If the person is paying with cash, change is made.
  • An “orderly” way to prioritize who gets checked out first is established.
  • Impulse items get sold.

I can see the cash requirement declining, but the other things need a central location. Doesn’t mean there aren’t certain sub-verticals that can do without them, but overall I just can’t wrap my head around a store without a centralized check stand.

Roger Saunders
Guest
4 years 9 months ago

Depends upon the merchandise assortment. A register atmosphere at an Apple Store where you might buy just one device makes sense. Likewise, a service-oriented retailer, like Nordstrom, understands how to tactfully follow/lead a customer through their aisles, select the soft goods of choice and check a customer out of the box.

When it comes to multiple items (grocery), large or small items (home improvement), or a specialty merchant selling sporting goods, pharmaceuticals or costly merchandise, bringing consumers through an orderly process to address questions, engage associates and control shrink still remains the best alternative.

Dr. Stephen Needel
Guest
4 years 9 months ago

Is this technology in search of an application or a consumer-driven need? Are we really seeing that many abandoned carts and is the cost of those lost sales more than the cost of adding RFID to every product in a store? When was the last time you saw, on a regular basis, more than one person checking out in an Apple Store (or an AT&T store or a Sprint store)?

Zel Bianco
Guest
4 years 9 months ago

I don’t think the majority of customers are ready for cash registers and POS terminals to be phased out and most retailers aren’t employing seamless transitions. In my experience checking out at the Apple Store or in similar situations (AT&T was a particularly drawn out one) can take more time and be more overwhelming and frustrating than even the lines at the supermarket the day before Thanksgiving. Perhaps some stores should be testing this process and working out the kinks, but for now I would rather stick with the devil I know.

Tony Orlando
Guest
4 years 9 months ago
I’m sorry, but this pie-in-the-sky thinking from high-tech folks makes me laugh, and until they understand where the regular folks like me come from, then convincing them that checkouts are still needed is futile. Cash is still used and, yes, it always will be. Apple is always mentioned as a blueprint of a way to run your stores, and frankly there is no comparison between what I do and how Apple runs their stores, so the need for checkouts, especially in my business, will not phase out any time soon. Some envision a world where everything is ordered online and it is the only way business will be done, and it simply is not realistic. Shopping in stores with checkouts at least in my lifetime is not going away, and neither is cash, which many people prefer to pay with to avoid running up their credit cards. Yes I am a simple man who may be getting older, but outside of high-tech stores and many online services, checkouts will be around for many years to… Read more »
Dan Raftery
Guest
4 years 9 months ago

This question is posed as a simplistic either/or situation. In the real world, there are consumers walking the aisles of all stores except Apple’s without a smartphone. And some people even prefer to pay with cash! And some want service/help with the bagging and loading step. I’m pretty sure these behaviors won’t change in this century. So the question should be more like: When are other retailers going to invest in the hybrid method referenced by Adrian?

Cathy Hotka
Guest
4 years 9 months ago

The Apple Store isn’t a good case study of the “new store” until more retailers start carrying only 90 SKUs.

In some formats and at some times of year, traditional checkout lanes are a must. (When mom is pushing a cartload of back-to-school supplies and clothes, it doesn’t make sense to check her out in the aisle. And my $150 grocery runs require traditional checkout too.) I don’t know any retailers who think that checkout lanes are on the way out permanently. That said, mobility provides a lot of flexibility that didn’t previously exist, and everyone’s interested in remaking the store experience.

Ed Rosenbaum
Guest
4 years 9 months ago

All one has to do in response to this is read the comments from Paula and Tony. They tell more of the reality of the story than the “what could happen in a perfect world” theory. Sure it would be good if this could happen. But we do not live in a world where this is realistic because of the demographics of the consumer. Not everyone with buying power is in their teens and 20s. Some still use that green paper stuff called cash. Others want options that this hypothesis does not afford us. Does this remind anyone other than me of the song “In The Year 2525” that may be about 30 years old now?

Gordon Arnold
Guest
4 years 9 months ago

There simply are not enough smartphone users to support the total transition at the present time. Among the smartphone users themselves the aptitude for this same evolution is not in a position to provide security and business continuity to the levels required for safe and secured transactions.

We may see gas-and-go convenience stores give it a go in the demographic areas that can support the still-needing-refinement apps that are out there. This might also be the energy boost needed for the return to the malls everyone is waiting for as well. And then there is the IT infrastructure that may not be able to provide the needed wireless speeds and security. In five years we will see the realization of this technology but the abandonment of checkout for the smartphone will need much more time and greater user capabilities.

Andy Casey
Guest
Andy Casey
4 years 9 months ago

This doesn’t have to be an “either/or” situation any more than self-checkout has been. What is needed is a system which allows the customer to decide how to check out rather than forcing them into one method or another.

David Dorf
Guest
4 years 9 months ago

Whenever the example is the Apple Store, you know the argument is not grounded in reality. Apple Stores are a specialized corner case, not the new model for retail. It’s great to reclaim space from the checkout, but there’s no need for an either/or solution. A combination of traditional registers, self-checkout and mobile devices is likely the best solution for many retailers.

Herb Sorensen
Guest
4 years 9 months ago
This article makes perfect sense, EXCEPT it ignores how retailers make their profit, and the impact of removing checkout on that profit. Retailers typically operate with close to zero net margins, and make their REAL profit from selling access to their in-store AUDIENCE. This means they are media companies, cleverly masquerading as sellers of merchandise. They are true sellers when it comes to service departments, but for the rest of the store, they are MERCHANT WAREHOUSEMEN, simply maintaining the facility where shoppers serve as unpaid stock pickers, who come and select what they want, and who cares what THAT is, as long as they hopefully select a LOT. What is missing from this article is ANY recognition of the reality that the money major brands pay retailers to allow them to display their stuff RIGHT AT THE CHECKOUT is not an insignificant share of the stores’ total net profits. Take a look at all the brands on display within six feet of the cash register! There are very few people who exhibit ANY realistic recognition… Read more »
Martin Mehalchin
Guest
4 years 9 months ago

Yes, the Apple Store is an outlier and grocery may be one of the last categories where mobile POS makes sense, but I still support the article’s overall conclusion. In most specialty retail formats (especially apparel), mobile POS can significantly improve the customer experience at busy times. Two years ago at Christmas I literally dumped hundreds of dollars worth of merchandise on a display table at Anthropologie after I saw how long the checkout line was. This year Anthropologie had mobile POS and they regained their share of wallet in my holiday shopping.

Another disadvantage of traditional POS is that it’s typically built on older systems that are expensive to upgrade and difficult to customize. Mobile POS is often built on a retailer’s eCommerce platform which allows more transactions to run through a modern order management and CRM infrastructure.

Ralph Jacobson
Guest
4 years 9 months ago

For big-box retailers, grocers and other large-format stores, POS presents quite often the only opportunity to interact with the shopper with a LIVE human…the last great differentiator. Whether that human grabs the opportunity to speak with the shopper is a whole other topic. Additionally, it will be years before RFID covers the assortment in these stores down to the SKU level, so POS will be around for a long time to come.

Vahe Katros
Guest
Vahe Katros
4 years 9 months ago
Let’s use the consultant’s tool, the 2 x 2 matrix to analyze this. The X dimension has item count (in a transaction) low/high. The Y dimension has digital-ness (includes ability to pay electronically) of customer low/high. In the low transaction/high digital, phasing out the POS is a brand statement that says, we are not part of the old—these are new concepts and are currently using tablet POS. The important piece here is that some of the categories/customers/shopping patterns may already be visiting your store so you could have this type of experience mixed in. The low transaction/low digital will follow a crossing of the chasm. Of course, low transaction formats have higher seasonal transaction counts. That will require some figuring it out. The high transaction/high digital might be a demographic that doesn’t have a car, wants to have a multichannel transaction (buy in store and deliver) so that has it’s own characteristic. And for high transaction/low digital, it’s the status quo with perhaps some chipping away on activity time to help improve service levels. Thirty years… Read more »
Ed Dunn
Guest
4 years 9 months ago

Retail without POS terminals is not possible—perhaps POS terminals are retail itself. The purpose of a point of sale is to create a station to handle the transaction phase and last mile delivery, and this should always be incorporated in retail design.

Cash registers are obsolete, but there needs to be a place to check out, ask about the service and follow up with the customer. Asking the customer to do all of this via their mobile phone is removing the essence of retailing.

Kenneth Leung
Guest
4 years 9 months ago

I think you still need a central location/area for checkout for most retail formats. You need bagging, packaging and basket/cart assist in many store formats. I have been to Nordstrom rack where they have mobile checkout plus traditional. I think that works the best because I think most consumers don’t want to check themselves out even if they have the app, especially if they are with children or dealing with distractions.

Steve Montgomery
Guest
4 years 9 months ago

My very short response is I agree with Tony.

I addition, there are markets such as convenience stores with gas where the POS is also the pump controller. It also functions as the credit/debit card device, etc. It’s great to say all that might be possible, but it’s sort of like the Jetsons. There could be flying cars in the future, but certainly not in the near future.

Tom Redd
Guest
4 years 9 months ago

All of you Millennial types no matter your age, listen up. Not all retail is like Apple. Bagging 2 carts of groceries, weighing produce, etc., is not all that easy and I would love to see your Apple store kids do it. The shopper would never return. Sure, let’s see you run an operation the size of Walmart on just RFID or wait—your latest hype mode topic—IoT!

Sorry to be so blunt, but some elements of retail still need a process to help maintain efficiency and continue the selling process (POS items) until the shopper’s wallet is closed.

Just sit back and be calm. POS and the aisles will change over time, but now is not the right time for the retailers and for a majority of the shoppers.

T.Redd…An ex-POS developer and designer.

Craig Sundstrom
Guest
4 years 9 months ago

Not much to add here, except that Mr. Peterson could have saved space himself by whittling his list down to just the final point: as long as that number is materially above zero—and I would include credit cards in with cash for this purpose—POS should remain.

Next in line….

James Tenser
Guest
4 years 9 months ago
Phased, perhaps, but not eliminated so soon. All the reasons are well identified by commenters here. We need POS for the subset of transactions that still use cash. The appropriateness of conducting transactions on the store floor will vary with the product type and quantity of items. Some shoppers are willing to use their own smart devices as shopping tools. Others aren’t. I agree with several folks here that the cash wrap can be an important positive part of the customer experience and even a profit contributor. The thing is, it’s situational, so sweeping changes should consider both what is gained and what is given up. But nobody here is mentioning the rhinoceros standing beside the elephant in the room – transaction security. There is decent progress underway with regard to protecting credit card transactions on wired POS terminals (the so-called EMV standard). Once you go wireless and cloud-based, however, there is far less certainty. Process and technology will no doubt address and secure these exposures, but the change won’t be instantaneous. Which leaves me… Read more »
Robert DiPietro
Guest
4 years 9 months ago

The only positive reason I can think of for keeping cash registers is the ability to queue up customers and sell them high-margin impulse items while they wait.

The register and cash wraps are going away and the benefit of redeploying that labor cost will generate sales gains for the retailer if they reinvest it, or margin gains if they don’t.

Lee Peterson
Guest
4 years 9 months ago

Phasing trad cash wraps out will not be very easy. Customers have a bad taste in their mouths from poor experiences with self or on locale checkout, at least from mass retailers. The key, IMO, will be to phase in mobile checkout the way the airlines phased in their kiosks—it took years of someone looking over people’s shoulders to get us to where we’re at now. Retailers need to keep that success story in mind.

Tim Moerke
Guest
Tim Moerke
4 years 9 months ago

As others have noted, Apple stores are a niche case, and what works for them won’t necessarily work for other retailers (just ask Ron Johnson). Mobile checkout has a future in some types of stores, but the traditional POS isn’t going away anytime soon.

Onn Manelson
Guest
4 years 9 months ago

I believe it’s just a matter of time until cash registers fade away. Let’s remember we have been going through a technological spree these past few decades with all the technology surrounding us.

With all that said, my grandmother (god bless her) would not be able to manage without walking up to a cash register. There’s still a whole generation out there that cannot adapt so quickly to all these technological changes.

As generations change it might be more feasible, but until then I doubt we’ll see these disappear.

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