Smart retailers fight walk-aways at the checkout

Retail sales are down, and the slumping economy might not turn around for some time. Retail giants, including Circuit City, Linens 'n Things, Sharper Image and KB Toys, are liquidating inventories. Others are on the verge of doing so. But smart retailers are digging in and making the necessary investments to boomerang out of this recession and, hopefully, win over the customers of their struggling competitors.

One of the largest areas for investment among winning retailers is the checkout queue. The checkout queue is the area that represents perhaps the greatest pain point for retailers and customers alike. It is, in the opinion of many industry experts, the most significant area where sales ultimately are either made or lost.

Research suggests that retailers experience an average of 1.6 percent of customers leaves the checkout queue — and the store — without completing the purchase. While the percentage seems relatively small, consider a retailer with 500 stores throughout the U.S. that averages 500 transactions per store, per day with an average customer purchase of $30. That small percentage adds up to $280 per store per day, or, $100,800 per year. Multiply that by the retailers 500 stores and this retailer is losing $50,400,000 each year because its customers are opting to walk out of the store without completing the purchase. They're dropping the items and are walking away. We call them walk-aways.

Why do walk-aways happen? It's simple, really. In today's fast-paced world, consumers are short on time and money. When shopping, consumers can navigate the store at their own pace, selecting the items they'd like to purchase; however, when moving toward the checkout queue there is an ingrained perception that there will be an inefficient and slow-moving line. It's when perception meets reality that many consumers opt to walk away without completing the purchase.

Smart retailers recognize this pain point. They know they're losing revenue, and worse, they're losing customers. They also understand their failing competitors have experienced this walk-away problem. Not wanting to meet a similar fate, responsible retailers are addressing their checkout queues.

Retailers are turning to queue management experts and are investing in new technologies and strategies to solve this problem. They're finding that emerging queue management technologies, when applied correctly, are greatly reducing walk-aways, improving customer satisfaction and increasing the average customer purchase.

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Queue management experts work with retailers to determine the best checkout solutions for each store, whether this be a lane-per-lane checkout, virtual queuing or single-lane queuing. While each solution is efficient in the proper environment, queue management experts can identify which system is best for a uniquely designed store. Whichever checkout queue solution is implemented, retailers are experiencing reduced walk-aways and happier customers.

Properly designed checkout queues can lower customer wait times by 25 percent and reduce walk-aways by as much as 90 percent. Checkout queues enhanced with in-queue merchandising products generate impulse purchases from up to 10 percent of customers. For the example retailer used in the walk-away model earlier, additional impulse sales of $1.50 to 10 percent of its customers would generate $10,500,000 of incremental revenue. Queue management experts help retailers capture this lost revenue with in-queue merchandising panels, baskets and bowls.

In-queue merchandising systems enable retailers to turn customer flow into cash flow by replacing traditional checkout queue barriers with merchandising panels and accessories. Modular slat wall systems promote and display products and include interchangeable graphic headers for displaying promotions, sales or corporate branding. Accessories including merchandising baskets and bowls allow maximum merchandising capacity per square foot of floor space, thus optimizing revenue per square foot performance.

Queue management solutions are unique to each retailer, and can even be customized for individual stores. When implementing a queue management system certain elements should be considered.

• Design: Queue management experts can help identify which checkout queue is best for a store. They can determine where the checkout queue should be located and if it should be a lane-per-lane checkout, virtual queue or single-lane queue. They can improve the flow of traffic and guide customers toward featured products or marketing materials.
• Technology: As a central element of the checkout queue, technology plays many roles. Electronic call forward systems speed customer flow by directing the person at the head of the line to the next available cashier. The system can keep customers advised of transaction speed giving visibility as to the wait time. Electronic queue ticketing allows multiple transaction profiles to be handled fairly and equitably for all waiting customers.
• Customization: Retailers can customize the checkout queue to meet specific needs. Whether it is for crowd control, to increase impulse purchases and move sale items, or to improve the store's revenues per square foot, queue management experts bring together combinations of crowd control solutions with merchandising add-ons best designed for the store. Modular merchandising panels and product displays built into the crowd control barriers can be designed to meet any retailer's needs.

A well-designed checkout queue produces nearly immediate results. When the checkout queue is customized to meet a retailer's needs, and is supported by technology, benefits will be realized in the following areas:

• Increased revenue: A well-designed queue will increase revenues per square foot by turning the dead space of the queue line into a revenue-generating area. Checkout queues modified with crowd control merchandising panels and add-on product displays will generate impulse purchases from up to 10 percent of customers.
• Customer satisfaction: A better organized checkout queue provides a fair and equitable "first come first served" process that can generate up to a 94 percent customer approval rating. Checkout queues complete with electronic call forward technologies allow retailers to connect with their customers. The customers are more aware of their wait time and the pace at which the line is moving. Including signage and electronic displays communicates corporate messaging, store information and sales.
• Impulse purchases: Checkout queues modified with crowd control merchandising panels and ad-on product displays will generate purchases from up to 10 percent of customers. Strategically placed feature and sale items near and within the checkout queue increase the customers' awareness of the products and drive them to purchase.
• Reduced walk-aways: Properly designed checkout queues are proven to reduce customer walk-aways by as much as 90 percent. When customers witness the efficiency of a checkout queue they are less likely to walk away. These customers leave the store satisfied with their shopping experience and eager to return.

Retailers implementing queue management and in-queue merchandising are moving customers through the checkout queue more efficiently and are increasing impulse purchasing behavior. Customers are happier and are spending more. And with a better shopping experience, they just might become customers for life.

Richard Prigg is vice president of commercial operations for Lawrence Metal Products, Inc.