NCR Corporation – The Interview

greg-mannNCR is the market leader in self-checkouts, which are rapidly being adopted by retailers on a global basis. Indeed, strategic research and consulting firm RBR predicts the numbers of self-checkouts installed globally will nearly triple to reach nearly 250,000 units globally by 2012. Greg Mann, NCR SelfServ Checkout solution specialist for Europe, the Middle East and Africa (EMEA), spoke to Wholesale Manager about the benefits the technology offers to shoppers and retailers.

Wholesale Manager – NCR is a vast global technology company. Before we focus specifically on your self-service checkouts, can you give us a brief overview the range of your solutions?

NCR is a global technology company and leader in automated teller machines, self-checkouts and other self- and assisted-service solutions, serving customers in more than 100 countries. NCR’s software, hardware, consulting and maintenance services help organisations in retail, financial, travel, healthcare and other industries interact with consumers across multiple kiosk, mobile and online channels.

In retail, our solutions include powerful POS workstations – with a full range of peripherals – which are designed for extended lifespans, to minimise downtime and reduce staff training requirements. We have also introduced the world’s first two-sided thermal receipt printer, which is not only more environmentally friendly as it uses less paper and energy, but also much faster.

In addition, NCR’s innovative, bioptic barcode scanners generate scan lines that are denser and longer than competing solutions on the market and can capture even hard-to-read barcodes quickly. These solutions are complemented by our information, ordering and bill payment kiosks and self-checkouts.

ncr-provides-retailers-with-a-wide-range-of-pos-solutions-including-two-sided-thermal-receipt-printers

WM – What are the main benefits of self-checkouts?

NCR SelfServ Checkout more than doubles the number of available tills within the same space as an assisted-service checkout which enables retailers to serve more customers. Research shows the NCR SelfServ Checkout reduces customer wait times by up to 40%, greatly enhancing the shopping experience and increasing loyalty levels.

As one assistant typically looks after four or more self-checkouts, retailers are able to re-deploy staff to meet demand from shoppers for additional services elsewhere in the store. The efficient use of labour is a key objective for any retailer. It’s especially important in smaller convenience stores, where fewer employees may be responsible for a greater variety of tasks. Whilst bigger supermarkets face the challenge of managing an expanding range of product lines as well as online and direct sales channels cost-effectively.

Around 40% of the European customers that NCR has surveyed have been able to redeploy 50-100 hours per store each week to provide more assistance elsewhere in-store. A further 30% have been able to redeploy between 100 and 150 hours.

WM – What consumer trends are driving demand for self-service checkouts?

NCR research shows Britons are now shopping three or more times a week to get fresh food as they need it. Customers tend to shop where they know they can get out of the store quickly and easily. Since self-checkout enables them to do just that, it can help retailers build customer loyalty in today’s competitive marketplace.

ncr-selfserv-checkout-enables-consumers-to-complete-their-shopping-and-leave-the-store-quicklyShoppers also demand more service in other parts of the store. Research by Buzzback shows nearly two thirds of European consumers want shelves fully stocked and would like help finding products. Self-checkout enables retailers to free up staff to meet this demand.

WM – What effect has the recession had on demand for self-checkouts in the UK?

NCR believes the current challenging economic conditions will provide a stimulus to the wider adoption of self-checkouts. Self-service helps retailers to optimise their labour usage, find new efficiencies and improve customer service capabilities. Also, in this tough economic climate, the technology’s rapid return on investment is attractive to retailers.

New NCR research shows the current economic climate has changed consumers’ purchasing habits, creating additional demand for self-checkouts. Bargain-conscious Britons are spending more time evaluating less familiar brands and switching between stores to capitalise on deals. People are spending more time making decisions in the aisles, but want to be able to get through the checkouts quickly and perceive self-checkouts as helping them achieve that goal.

WM – How easy are your SelfServ Checkouts for consumers to use?

NCR SelfServ Checkouts are very easy for consumers to use. They feature touch screens displaying animations, simple instructions and audio prompts that guide shoppers through each step of the checkout process. This is in addition to “follow-me” lights on the cash inputs and outputs which are conveniently arranged next to one another.

ncr-selfserv-checkouts-at-superquinnNCR self-checkouts are designed to support both expert and novice users through the use of “multi-pathing” software. For example, shoppers may wish to click on the ‘start’ button on the screen to start the transaction and follow the prompts, or they can scan and bag an item, input note and/or coins collect their receipt and go without any interaction with the user interface. The latest version of NCR SelfServ Checkout also enables shoppers to insert loose change in bulk into the machine as payment rather than feeding in individual coins.

WM – How much faster is self-checkout than conventional checkouts?

With NCR SelfServ Checkout, the shopper is fully engaged in the checkout process and perceives that the time goes more quickly. Self-checkout is typically faster for a basket of up to 20-25 items, but for a trolley with more items, a trained cashier is quicker. NCR targets smaller basket customers for self-checkout to free up cashiers to deal with trolley customers. This ties in with the trend indentified by Buzzback for consumers to shop for less but more often, buying fresh food as they need it.

WM – What is the ideal proportion of self-checkout to traditional checkouts?

It depends heavily on the store’s transaction patterns. NCR’s Store Business Consulting team uses our unique TOUR process, taking a data-driven approach to defining the retailers’ business Targets, Optimising the way in which the technology is deployed and maximising customer Utilisation rates. This helps NCR to ensure the technology delivers a quick Return On Investment.

NCR looks at each store’s transaction log, the basket/trolley mix and any unique queuing challenges to define the optimal mix of assisted lanes to NCR SelfServ Checkout lanes. We run scenarios, looking at how many self-checkout units can be deployed, of which size and where they should be placed for the convenience of shoppers, providing retailers with ‘what if’ answers.

WM – How do you assess the best self-checkout set up for a particular store?

As touched on briefly, NCR’s TOUR process uses a number of modelling tools – drawing on transaction log, POS and other data – analysed by time period for standard weeks and busy weeks. NCR models different checkout configurations to highlight likely capacity issues or opportunities and propose optimum scenarios, including projected labour savings.

NCR takes its data-driven approach very seriously and has a dedicated team in Europe to support its customers. The process that has been developed is continually refined by its in-house experts as they continue to gather data and learn from the expansion of NCR SelfServ Checkout installations around the region and globally.

WM – Are there any UK stores you know of that are totally self-checkout?

There aren’t any 100% self-checkout stores in the UK but this service model has been adopted in the US by fairly small format stores – roughly 15,000 sq ft. Customers can request help at any time, if required, from ‘floating’ attendants by pressing a button on the touch screen. NCR has had very positive feedback from these stores: customers are very happy, and the assistants’ support is contributing to the technology’s success.

WM – Which particular UK multiple grocers are the foremost adopters of self-checkout technology?

Grocery retailers such as Tesco, Sainsbury’s and Marks & Spencer are foremost adopters of self-checkouts in the UK. Tesco announced in its annual results for 2008 that a quarter of transactions are going through self-checkouts. Around 6.5 million Tesco customers are opting to use the technology each week – a five-fold increase in just two years. NCR self-checkouts are now available in almost half of Tesco’s UK stores.

WM – How does self-checkout adoption here compare with the picture in Europe?

The UK has been particularly enthusiastic in adopting self-checkouts as the retailers here saw the immediate benefits in terms of meeting their need to reduce queues and increase service capacity. They have launched the technology in a way to drive customer engagement, ensuring attendants are on hand and doing regular surveys to gauge people’s reactions and refine the solution.

ncr-logo_pantone_no_taglineAdoption is also beginning to accelerate elsewhere in Europe. Half of the ten leading European retailers we questioned plan to have self-checkouts in all stores and 40% expect to have them in half their stores within the next 5 to 10 years.

WM – How easy are self-checkout systems to install? How long does it take to install a self-checkout system in a store?

Installation is very straightforward and typically takes place at night. Four self-checkouts take a maximum four hours to install including placement, power and communications connections and software loading. NCR SelfServ Checkouts have wheels so they can be move easily into place before power and communications are connected and the NCR software uploaded. Typically, the self-checkouts are connected by LAN cable to the store’s network but they can be wireless.

WM – How compatible are your self-checkouts with EPOS and other technologies?

NCR SelfServ Checkouts are fully compatible with other EPOS systems. To date we have integrated SelfServ Checkouts into over 125 different EPOS environments globally.

WM – How green are your solutions?

To support retailers’ environmental initiatives, NCR’s self-checkout software now offers an optional “Own Bag” button – a feature that identifies the weight of the customer’s re-usable bag on the security scale. It also features a low power consumption processor, low energy LEDs and light bulbs to save energy and a two-sided receipt printer that uses up to 40% less paper and between 35% and 50% less energy than competing solutions on the market.

WM – What are the different elements in a self-checkout system?

The latest generation NCR SelfServ Checkout includes a touch screen with integrated speakers that gives audio and visual prompts to the shopper. This is complemented by NCR’s latest bioptic scanner/scale and an integrated two-sided thermal receipt printer, which as I mentioned previously is unique to NCR. Our self-checkouts support almost any Chip and PIN or contactless payment terminal and feature coin and note recycling technology, including bulk coin acceptance to provide a simpler transaction for the shopper. The two-sided receipt printing uses up to 40% less paper and, together with the cash recycling technology, helps to reduce the retailers’ replenishment requirements.

WM – What different self-checkout units are there?

NCR SelfServ Checkouts come in a range of sizes of unit, accommodating one bag, two bags, three bags and options for input and output belts for larger trolley shops. The modular design of NCR SelfServ Checkout partitions the core scanning and tendering function from the unloading and bagging function, enabling retailers to upgrade and modify the configuration after installation with little effort for built-in investment protection. They can be changed from left to right-hand configuration enabling retailers to change the way in which the self-checkouts are grouped together in-store as required. Retailers can even select a specific colour for the NCR SelfServ Checkouts to match their stores’ décor. The unit can also be recoloured simply by replacing its external removable panels.

WM – How secure are your self-checkouts?

A number of psychological and physical theft deterrents are included in the NCR SelfServ Checkout, including an integrated security scale, a sophisticated self-learning and adjusting weight database, intervention lights and sounds, and attendant-monitoring tools. The sophisticated self-learning weight database ensures the items shoppers scanned are the same as the items they add to the bagging area.

WM – Can self-checkouts detect goods that are not scanned? Do they include surveillance and alarm functions for these situations?

Yes, if an item is placed into the carrier bag without being scanned, this is detected by the security scale and shoppers are notified via on-screen and audio messages. Discrepancies between basket and bag show on the assistant’s screen, so the person monitoring the self-checkout area can see if a customer is scanning and bagging the correct items. The self-checkout screen also displays a message to the customer first to allow them to rectify any error. The approach to alarms and surveillance depends on the retailer’s security policy.

WM – How are the NCR SelfServ Checkouts maintained?

NCR offers a full suite of managed services ranging from break fix and remote monitoring, right through to enterprise reporting and proactive alerts for its NCR SelfServ Checkouts. NCR understands the need for lane availability and has engineered the system to support maximum up-time and identify preventative measures that need to be taken to avoid potential down-time.

WM – Where do you develop your self-checkout technology?

The majority of the R&D for NCR SelfServ Checkout is carried out in Atlanta, Georgia. NCR’s Store Business Consulting team comprises psychologists, ergonomists, statisticians, industrial engineers and designers, user interface and graphic designers, as well as IT and business consultants. They undertake a variety of research programmes around the world, including video-based time and motion studies of consumers and staff using retail checkouts to identify ways in which vital seconds can be shaved off each element of a transaction. This research has led to continuous enhancements to NCR SelfServ Checkout in the ten years since it was launched.

WM – How do you pass customer feed back from Europe to Atlanta?

As NCR SelfServ Checkout Solution Specialist for EMEA, I lead the process of gathering and feeding back insights and requirements for solution enhancements from the EMEA SelfServ Checkout user community and the local account teams in the UK to our product management team in the US.
For example, because space is at such a high premium in UK stores we identified the need for a self-checkout with a much smaller footprint than NCR had previously offered. Over six months we developed and introduced a system taking up half the usual area, including cash payment facility, which is ideal for small format stores.

We continue to advance the technology used in the NCR SelfServ Checkout and today are offering the latest in currency recycling. This was a requirement driven primarily by our EMEA customers.

WM – What technical standards are your self-checkout units made to?

NCR products comply with the European Union’s Waste Electrical and Electronic Equipment (WEEE) Directive, which aims to encourage the reuse, recycling and recovery of electronic equipment at its end-of-life. This is in addition to the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment Regulations 2008 (RoHS) and disability regulations – such as the Americans with Disabilities Act and UK Disability Discrimination Act.

NCR also sets its own targets and has designed its self-checkouts to the highest human factors and ergonomic standards. For example, NCR introduced the first barcode scanners 35 years ago and continue to be in the forefront of this technology with our latest bioptic scanners. NCR’s current scanners can read the new GS1 data barcodes, which suppliers will start using in the next couple of years.

WM – Do you have any showcase stores with self-checkout units that people can visit?

NCR has demo centres in Atlanta, where the majority of its product development is carried out, and New York. In the UK, we also have demonstration units in our offices in Marylebone, London, and also take customers on tours of stores in the capital. In addition, our technology is also available in most of the large supermarket multiples nationwide.

WM – Which other countries do NCR distribute SelfServ self-checkouts in? Do you distribute and install them directly or through third parties?

NCR has a 60% share of the global self-checkout market. Two out of three self-checkouts shipped in the last five years are from NCR. NCR distributes NCR SelfServ Checkouts in the majority of countries, but also work with local expert partners, such as NEW VISION in Lithuania and Printec in Central and Eastern Europe.

WM – Where do you see your self-checkouts going from here?

Self-service is a key area for NCR and self-checkout is a crucial part of that. NCR has invested over £100m to date in developing its self-checkouts, and it will continue to seek further ways to improve the technology for its customers. Strategic research and consulting firm RBR predicts that the installed base of self-checkouts is due to triple by 2012 to reach nearly 250,000 units globally. This certainly ties in with research NCR has done amongst its large customer base in Europe.

NCR Corporation   tel: 020 7723 7070   email: retail@ncr.com www.ncr.com/retail