Total Set of Thirty Observations

¶ … total set of thirty observations of shoppers using automated checkout lanes at Home Depot, concentrating on twelve of them that illustrate the highest levels of variation in customer service levels. The use of automated checkout systems in Home Depot is a technology-driven strategy the Do-it-Yourself (DYI) retailer has pursued to free up more staff to help shoppers find solutions to their home improvement problems using the products offered in the store. To capture the maximum amount of data possible both a self-service checkout at the Builder Desk and the self-service checkout next to regular or standard registers were monitored, in addition to classifying service by how fully automated, partially automated or manual the transaction became. The method of payment was coded as the transaction classifications, with payment being made by credit cards, cash into the automated system, personal check, and gift card captured in the analysis. Finally the need for personal service to complete the transaction was also tracked. Appendix a provides an overview of all transactions by date and the legend of values used to code the results. SPSS Version 13 for Windows was used to analyze the data, specifically looking for insights into the twelve most complex transactions.

Key Findings from the Analysis

Automated self-service check-out lanes are becoming increasingly prevalent throughout many retailers as this technology has the potential to significantly reduce costs of providing additional attendants to staff checkout lanes with cash registers, in addition to freeing up staff to work the isles of the store and provide greater customer service. The analysis of twelve specific transactions however out of a total set of thirty shows that the ability of these self-service checkout lanes to manage anything but the most simplest of transactions causes a greater level of manual intervention from customer service representatives working at the store. The greater the complexity of the transaction, the more difficult the task of completing the transaction through purely automated means. The challenge for retailers is to anticipate the high level of variability in the transactions completed and program the self-service checkout lanes to manage for the variability in their processes. As can be seen from the frequency distribution of the variable shown in Appendix B of this paper, personal assistance was needed for completing 43.3% of transactions. As automated checkout systems are known for not being able to accept alternative forms of payment, it would be reasonable to assume that this was due to a high number of customers (13 of the sample is 43% of total respondents) using some form of payment other that credit cards. From the observations completed, 53.3% of the total respondent base of thirty transactions observed was paid for using a credit card and 5, or 16.7% paid using cash and 26.7% paid using a personal check with only 1, or 3.3% of the total respondent base using a gift card. Isolating down to the twelve most complex transactions that involve the purchase of higher-end products including paying for a water heater through the scan checkout line, in addition to paying for custom-cut draperies, blinds, glass, and lumber, a pattern emerges of the cut-to-order, build-to-order, and higher-priced items requiring a high level of manual assistance despite Home Depot employees urging their customers to purchase the products through the automated checkout systems. Clearly the most customized the product and higher-end it is, the boundaries of the processes that self-service checkout systems can manage stretches the abilities of these systems.

After observing self-service checkout experiences of customers in both the builder desk and regular registers to see if there was a significant difference in the level of experience each type of customer who would choose based on previous experience, the results showed that those choosing the builder desk did not need as much personal assistance. Only four of those purchasing through the self-service builder checkout required assistance, yet nine of those purchasing through the regular registers required more assistance. The use of the self-service builder checkout lanes weren't so easily segmented by the types of goods being purchased; in fact both consumer-based goods in addition to those used by contractors were purchased through that specific lane. The self-service builder desk checkout however rarely had a line, and it was out of the main outbound traffic flow of the store. It could be assumed that given the lower levels of anxiety and pressure to rush through the checkout process in this location off the main store checkout traffic that customers took more time to complete the transactions, resulting in fewer errors being created. This is certainly an area that needs further research.

After evaluating those twelve transactions that involved custom-ordered and cut-to-order glass, lumber, blinds, draperies and the attempt of consumers (at store staff request) to check out using the self-service checkout for big-ticket items it became immediately apparent that these kiosks could not interpolate the custom amount by the per unit cost. As customers continually worked to enter their product ID numbers, sometimes continually scanning plywood, glass or the invoice for a high-ticket item and keying in the quantities they wanted to purchase only to find the self-service checkout system not completing the calculation correctly began to show how disconnected these systems were from the more complex quoting, pricing and fulfillment processes in the store.

Take for example the customer who wanted to purchase five custom-cut pieces of plywood, and had been provided with a checkout slip that showed the stocking unit number, quantity, and had a price on it. The plywood itself had a bar code on it to make it scanabale. As the customer worked to continually scan and place in the number "five" into the self-service kiosk only to have the system beep back and ask for the items to be placed on the scanner one by one. The result was that the customer became very frustrated, took all the materials back to the department he had been to have the pieces cut originally, and asked for a receipt to check out through the regular lines, staffed with people. He also explained that the self-service checkout could not include quantities being typed in as he had been told. At first the lumber associates argued with the customer, and then were shown how the quantity could not be entered for custom-cut products, only standard off-the-shelf products. They mildly apologized as the customer stormed off to a line of people waiting to check out.

This was also the case for a person who had bought a hot water heater through the front desk and was told to go through the self-service kiosk to pay for both the water heater and the service plan. Both the hot water heater and the service plan were on the same invoice, and the customer went through the self-service kiosk line at the instruction of the front desk staff in the store. The customer scanned the invoice and was told it would be 20% more than the invoice said. Quickly the customer cancelled the transaction and tried to scan the invoice again. Again, the automated voice response system for the self-service check-out told him it would be 20% more and showed the amount on the small screen. Agitated and angry, the customer stormed back to the front desk and told them he would not be paying 20% more and asked in a loud, angry voice is there was some kind of "bait and switch" going on. It was the by far the most dramatic observation, yet also showed how disconnected the bidding and quoting systems for outside contractors are with the checkout process. The store manager eventually and to sort out the mess and calm down the customer, and was told that the self-service checkout systems assumed that all service performed was from the store itself. In the case of installing a hot water heater the store charged 20% more than the contractor the store's front desk had a contract with. No one had ever put the specific vendor code and discount in for the contractor and as a result the automated system automatically charged the customer the correct price of having the work done by Home Depot crews.

What also became clear that was bulk items measured by the yard which are typically process goods also do not have a reliable integration to the self-service checkouts either. Another customer, checking out with a custom-cut sheet of linoleum and adhesive again was asked for the per yard amount and also the total yardage, two figures the sales associates had given him. He typed them both in and the incorrect price came up. The linoleum had in fact been on sales for 10% off, yet the self-service checkout systems had not bee updated with the latest price. Instead, the regular price was being used. This customer was not as irate as the one replacing his hot water heater, yet the confusion was evident again how much of a "digital island" these self-service checkout lanes were in this specific Home Depot.

Customer Service Triage at Home Depot

Despite the self-service checkout lanes being staffed by an associate to manage all four of the self-service locations, with custom orders and big-ticket items they had to inevitably get the store manager involved to alleviate the conflicts with customers. The time required to resolve both the custom orders and big-ticket purchases actually took more time for customers than it would have taken to just go through the traditional checkout lanes. The lack of information workflow, process, pricing, and employee knowledge of the processes was evident by watching the series of transactions completed. The triage or problem solving of the store manager took an inordinate amount of time to troubleshoot the pricing discrepancies on the service contracts alone would have made it much simpler to have also gone through the traditional check-out lanes. The more complex the transaction the greater the need for Home Depot to have managers and senior sales people involved. It appeared that navigating the many exceptions to these processes was the most critical step the senior managers in the store had to contend with, in effect learning about gaps in the self-service checkout through trial-and-error of finding problems and correcting them. This triage was present on the most complex transactions that Home Depot associates pointed customers to self-service checkouts to complete. Conversely, the ability of the self-service checkout lanes also greatly expedited the sale of the more common packaged products that did not require exceptions to complete the transaction. The occasional question of how to use a payment method besides cash, the use of a gift card, and confusion of where change was provided were all questions customers had as they completed their transactions through the self-service checkout lanes.

Despite these efficiency gains however for simpler transactions, the loss of customer goodwill as a result of the many apparent process and system disconnects that plague the self-service checkout lanes was not quantified as part of this study. Yet it was clearly apparent with the customer being charged 20% more than they expected for the water heater and its installation, and the many problems buying cut-to-order products including process goods like rolls of linoleum. The lack of pricing consistency caught on the linoleum also will make customers trust these systems less than in-person counterparts.

Balancing Automated and Personalized Service

The retailing strategy of higher-end stores that provide personalized assistance and service for higher-ticket items seems to be required for Home Depot as well. The legendary personalized service of Nordstrom's, a higher end department store headquartered in the Pacific Northwest, is a case in point. For those customers purchasing products over $300, for example, need to have a high level of personalized service to complete the transaction. Home Depot's front desk staff did this to an extent; yet did not completely finish the transaction, leaving the automated system to enter and charge for the order. Home Depot needs to intermediate their use of automated service for highly standardized transactions while providing personal assistance for the higher-end, more complex transactions. It would not be feasible for Home Depot to pursue a high service model as Nordstrom's does, yet it would be advisable to at least balance the cost reduction strategies that drove the use of self-service lanes in the first place with a focus on customer service.

Clearly it was not possible to measure customer satisfaction from those transactions that required little if any time to complete, mostly involving off-the-shelf products. From the transactions observed however there is a fair degree of frustration on the part of customers who don't like necessarily having to pay to replace a water heater in the first place, much less go through the frustration of being overcharged for it. The challenge for Home Depot is to work out selling and service strategies in their stores that allow customers the flexibility of how they want to buy. The self-service checkout at the builder desk, much less visible and much less rushed due to no lines, had less requests for assistance from staff. Possibly the customers using the self-service check out at this location in the store knew it was best for those items they needed to pick up quickly. In any case, the self-service checkout systems, designed to reduce the costs of operating the store while freeing up associates to better serve customers, didn't actually lead to a higher level of efficiency in checkout times. As the more complex transactions continually failed to deliver the right results through the self-service checkouts, customers wanting for the systems either would put down their merchandise and leave or go to the checkout lines staffed with people. It was very clear from this observation exercise that customers dislike waiting in line to check out quite a bit, as the stares and exasperated sighs showed. It was clear that that this reaction to the checkout delays for complex transactions further caused stress for those checking out. The impatient body language and stares just made these customers of customized products and a water heater all the angrier at Home Depot for directing them to these lanes in the first place. In short, the lack of integration of the self-service checkout lanes actually contributed to both the customers and the waiting lines more than the efficiency of these automated checkout systems.