January 16, 2013, 10:38 AM — Automated self-checkout is appearing in more and more retail stores, with Walmart this year installing 10,000 self-service kiosks in hundreds of stores. But self-checkout is a technology direction with risks -- and even as Walmart moves ahead with its plan, other companies are already abandoning it.
Retailer Albertsons LLC, for instance, has already pulled its self-checkout systems, as did Big Y, a New England grocer. Ikea is moving to do the same thing.
At the heart of these reversals: Customer rejection.
Even so, stores like Walmart say automated self-checkout kiosks can increase customer convenience and choice. But what does a checkout kiosk system actually fix?
Vendors argue that having more checkout options means shorter lanes and speedier customer transactions. But there are concerns about the impact on jobs, since stores that roll out the technology can steer customers to self-checkout systems -- and cut back on human cashiers.
That later issue is a flash point.
Tech vs. jobs
"People are not getting enough hours now, and when we have the self-checkout, people are going to be getting even less hours," said Janet Sparks, a Walmart customer service manager at a store in Louisiana who is also involved with Organization United for Respect at Walmart, a group supported by the United Food and Commercial Workers union. She believes understaffing creates demand for self-checkout systems.
Automated self-checkout "does eliminate jobs, there's not much question about that. The question is how many?" said Frank Levy, an MIT professor emeritus of urban economics.
Levy sees self-checkout automation as the next wave of technological change in this area, the first being barcoding. Barcoding improved the volume of work a cashier could handle. The question is whether there is offsetting job creation to make up for job losses due to automation.
In general, if computerization enables you to lower prices to stimulate more demand, employment will rise, he said.
But checkout cashier salaries are just a small part of the cost of groceries, said Levy, who doesn't believe the labor cost savings will have much impact on prices.
"What kinds of job creation is the economy going to see in other areas that might soak up labor, as opposed to just driving down the wages so cheap so that you get more jobs created that way?" said Levy.
Producing the automated systems will create jobs, but Levy said that the net overall effect may be job loss. "We should be thinking about it as a big problem," he said.