Saturday, November 23, 2019

The Economics of Self-Checkout

Image result for self checkout machine

With technology advancing so fast in the world, it is difficult to imagine jobs that aren’t going to be taken over by robots. Already at our local Safeway, you can see evidence of this in the form of self-service checkout machines. It seems like a simple concept; robots don’t need breaks, the high pay, or the insurance that people need when it comes to the job of a cashier. While the self-service technology does have these benefits since it reduces the front-line staffing costs and increases the store's efficiency by redistributing the former front-line staff to other service-dominated areas of the business, it has many negative aspects that are reasons that stop every store you see from having robot cashiers. 
These self-checkout machines have direct business costs, such as cost. Since they are very high technology machines, they cost about $125,000 since the business not only has to pay for the machine but create a software system that tracks inventory and sales. The most significant cost that self-service machines have are they increase the rate of theft. People are much more likely to steal from a store when they are going by a robot that they are controlling than a human that they have to talk to. Additionally, there are indirect costs of business when dealing with self-checkout machines. Without human interaction at the end of a purchase, many studies have shown that it reduces customer satisfaction and loyalty, which only hurt the business’ long-term revenue. 
People are trying to combat these business costs of self-service machines by having moral reminders about stealing and making them more human-like. These moral reminders are in hopes to elicit empathy from the person about to steal and remind people to be honest. The humanization of the machines would also help theft since people are less likely to steal from something, like a machine with human characteristics, that triggers empathy.

3 comments:

  1. This was a very interesting read. I actually prefer self-checkout machines over a human cashier because I find them more convenient and fast. But the cost of a self-checkout machine is indeed, very expensive, and they are prone to breaking down too. Their algorithm only covers so much, and sometimes at Safeway, the monitor displays a "wait for assistance" screen, which is annoying. As for theft, the self-checkout machines have security cameras, and usually there's a person watching over the self-checkout area as well.

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  2. I never realized the actual costs of these machines. I'm surprised how expensive they are! Although you do address a lot of issues with the machines, I do think they have many benefits. Like Carrie said, as a customer I really enjoy these because it's convenient and it makes my trip fast. I know lots of people who just like to get what they want and leave, avoiding human interaction, so this makes it better for them. I think that for some people the machines can actually increase demand for the store's products, because they would be more likely to go to the store and buy from it if it's really easy for them. I also think that many stores have to compete with other stores that have this self checkout, because it really does make the shopping experience easier for those who like self checkout, and may contribute to a more successful business for a store.

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  3. Is it true that self-checkout machines increase the frequency of theft? It sounds plausible but I wonder if there is credible data to back up the statement. I am a supporter of self-checkout. I think that the idea that "robots are replacing jobs" is a bit paranoid. In the age of technology, many roles that previously required a human can be filled by tech. Technology may be able to accomplish those tasks more efficiently than a human. I don't think this should be a major cause for concern because technological advancements could mean that in the next few decades there will likely be jobs created (for humans) that don't even currently exist. It is interesting to see a figure for the cost of self-checkout as I never considered what it costs the stores. I wonder if any benefits outweigh that cost, though I suppose they must or else stores would not continue using self-checkout machines.

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