Retail self-checkout kiosks have seen rapid adoption in recent years — making up 30% of all grocery store transactions in 2021 — up from 18% in 2018. Whether you like ‘em or not, they’re sticking around — and you might even see more in the future.

Awful experience; why keep them around?

The answer to why companies keep most things we hate — is cost savings. Two to three cashiers can manage a lane of ten machines — a strong selling point as stores struggle with hiring. But they also provide a terrible experience for shoppers:

• 67% of 1,000 consumers surveyed say they’ve had a self-checkout fail on them (Raydiant).
• The tech hasn’t improved much since the first machine launched in 1986, per food-retail analyst Jim Hertel (WSJ).

At the start, the tech was so bad that many avoided it, but COVID forced us to rethink. In 2019, Costco brought back self-checkout options after stopping them in 2013.

The solution is better tech…

Only 1% of grocery stores have cashier-less tech (see: Amazon Go), while smart carts that automatically count items make up 3% of stores.

In 2020, Amazon began selling its cashier-less tech “Just Walk Out” to other retailers. It costs an estimated $1 million to open an Amazon convenience store with a payback period of two years.

• Amazon had originally planned to install its cashier-less tech in its Amazon Fresh grocery stores.
• Last month, Amazon put those plans on hold as sales disappointed and costs were much higher than convenience stores.

Investors: Drop the spoiling goods

130+ year old NCR (NYSE:NCR) is the leading provider of ATMs and self-checkout kiosks — servicing a wide range of industries like retail, hospitality and more.

But NCR has struggled in the public markets with a 10-year return of -5%. They’ve repeatedly tried to sell the company with little luck:

• In July, WSJ reported that Veritas Capital was in talks to buy NCR and take it private.
• But last Friday, NCR said it would opt to split its business into two — separating its ATM and digital commerce business.

Investors clearly weren’t happy — sending its stock down 20% on the day of the announcement.