IKI, Lithuania’s second largest grocery retail chain with more than 250 stores in Lithuania and Latvia, become the first retailer in the Baltic states to trial self-checkouts that enable shoppers to scan, pack and pay for goods themselves in February 2008.
One year on and 100 NCR SelfServ Checkout units have been rolled out to 16 stores and customer popularity has exceeded all expectations – an astonishing 4.5 million IKI customers have used the self-checkouts in just a year.
Around 42 per cent of customers now opt to use self-checkout rather than the assisted-service tills. Significantly, customer throughput at peak times has risen by 8 per cent.
In 2007 the story was very different. IKI was suffering from queuing problems at its checkouts which were affecting customer service, loyalty and sales levels. Lithuania’s population has declined by 0.6% to 3.6 million since 2004 when it joined the European Union. This has led to recruitment challenges in many sectors, including retail, although the supermarket stores themselves remain themselves very busy with shoppers.
The IKI board decided that a solution that reduced dependency on staff availability was urgently needed to ensure IKI could continue to live up to its ‘brand promise’ of being a fast and convenient place to shop.
Self-checkout technology was chosen as the solution to this challenge. Typically just one member of staff is required to look after four or more self-checkouts. The self-checkout assistant is out on the shop floor helping customers use the solution, whilst colleagues man the assisted checkouts and help to keep the shelves fully stocked.
The process of finding the right technology provider started in January 2007. IKI evaluated all the vendors on the market. After five months of evaluating the comparative technologies, IKI chose the NCR SelfServ Checkout solution.
Marcel Haraszti, IKI CEO said, “NCR, as the global market leader of self-checkout technology, excelled against its competition. NCR and its local partner NEW VISION focused on our business needs and challenges. NCR’s consultancy approach involved all levels of our business from store staff to senior management and ensured that they really understood how we needed self-checkout to work for us now and in the future.”
Haraszti added, “Furthermore, the technology was far superior. NCR’s $100 million investment and human factor engineered design makes it a much easier self-checkout system to use.”
As IKI was introducing a totally new shopping concept to Lithuania, a communication strategy was prepared, targeting customers and staff alike. Having launched self-checkout in 16 different countries, NCR’s business and communications consultancy team was on hand to help advise IKI on different approaches to raise public awareness and drive usage levels.
By branding the self-checkouts ‘IKI Bitute’ or ‘little bee,’ the retailer expressed the fact this service channel is designed to be fast to use, enabling consumers to fit in shopping trips around their busy lives.
During the first self-checkout trial, IKI ran TV ads which included a new company slogan, ‘Just a minute – it only takes that long to shop at IKI’. This was an important message to get across. Rising salary levels, longer working hours and more leisure choices mean that IKI’s customers are increasingly time-pressured.
Customers and staff always refer to our self-checkouts as ‘IKI bees’ and consequently the term self-checkout is relatively unknown in Lithuania.”
National and local media coverage of the store launches, an online video and in-store promotional marketing, ensured the retailer could explain to the self-checkout ease-of-use features to customers.
Vaisvila concludes, “The aim of the different campaigns was to try to change the way people shop, encouraging shoppers at IKI with a small number of items to use our fast and easy self-checkouts. In fact, customer acceptance exceeded all expectations.”
The first trial of NCR SelfServ Checkout took place at an IKI store in Vilnius, Lithuania’s largest city and capital, in February 2008 to resounding success. Customer research highlighted that 96 per cent of first time users of the technology would use it again and 88 per cent enjoyed the experience.
Haraszti comments, “Our customers really enjoy using NCR SelfServ Checkout. This technology has helped us overcome staffing problems and long queues while improving customer service levels significantly.”
Two thirds of shoppers had immediately become repeat users of the self-checkouts across all demographic groups, particularly the 25 to 49 age range. The survey also revealed that self-checkout is most popular among women with young children, women that shop on their own and students – key target groups for IKI.
Haraszki concludes, “We started our self-checkout rollouts over a year ago and are still benefiting from the competitive advantage of being first to market. It even created an opportunity for us to adopt new company slogan – ‘just a minute, it only tales that long to shop at IKI’. No wonder it’s so popular – in one day alone in January 2009, a massive 26,000 IKI customers used self-checkout in 15 stores. We expect many more to do so in the future.”