Labor shortages are negatively impacting shoppers’ in-store experience and revenues; most retailers are looking to tech as the cure
New research commissioned by Zippin, a leading provider of checkout-free technology, reveals that the real cost of waiting in line at the store goes far beyond time wasted, with 92 percent of retailers admitting that wait times at busy periods have had a negative impact on their companies’ revenues. Based on these findings, designed to reveal the state of retail post-pandemic, Zippin calculates that retailers are facing a $555 billion headwind as a result of shoppers leaving checkout lines.
In a parallel consumer study conducted simultaneously, more than half stated that in the last 12 months they have left a store without buying anything because the line was too long. Of those, 84 percent said they have done so at least twice in the last year alone. The culprit? 80 percent of shoppers said since the pandemic they have had to stand in line more often when shopping in a retail store.
Labor Shortages Cause Long Checkout Lines, Driving Down Revenue
Another major outcome of the pandemic has been the labor shortage caused by hundreds of thousands of frontline workers abandoning their jobs in favor of more rewarding, better paid work. Hiring challenges have been largely responsible for unacceptable wait times at checkout.
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Brick and mortar retailers still account for 85.2 percent of retail transactions according to the U.S. Department of Commerce, and their success or failure can have a huge impact on the economy. Over two-thirds of brick and mortar retailers said that the current tight labor market (where many find it hard to hire retail crew) is negatively impacting their revenues. This, combined with the resulting long wait times at the checkout line, is causing a double whammy for retailers’ bottom line.
“As we face a highly unpredictable macro economic climate, it’s crucial that retailers don’t leave money on the table, especially after they’ve done the hard work of bringing shoppers through their doors,” said Alice Chan, senior vice president of marketing at Zippin. “We’ve all asked ourselves: ‘shall I stay or shall I go?‘ when we see just how long the checkout line is. The good news is that using tech to eliminate checkout lines will immediately unlock additional revenue and restore customer satisfaction. The frictionless economy is here.”
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Only 14 percent of retailers are planning to address the issues with additional hiring. Technology is the most favored solution with 79 percent planning to implement either self-checkout (47%) or checkout-free (32%) to win back consumers who are tired of friction-filled in-store experiences.
However, retailers have been slow to adopt retail technology to address these problems and instead, implemented closures and other restrictions that have further hit their bottom line, including:
45% have reduced opening hours (e.g. eliminating early or late shifts) on an ongoing basis
41% have executed a short-term temporary closure (e.g. at least a few hours) of at least one of its stores
26% have canceled expansion plans (e.g. the opening a new store)
21% have permanently closed stores including 9% who have closed multiple stores
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Not all lines are created equal
While consumers largely agree that long lines are unacceptable, Gen Z is more likely to quit because of a long line, with nearly three-quarters sharing they have left a store in the last year, compared to less than one-third of Baby Boomers.
And there are certain purchases shoppers are less likely to wait in line for. Locations that need to serve consumers quickly, including stadiums and arenas, movie theaters, theme parks and ski resorts, are regularly missing out on valuable revenue from concession stands:
- 31% are least likely to wait for drinks and snacks at places like movie theaters, theme parks, ski resorts, casinos and hotels
- 27% are least likely to wait for refreshments at a sporting event
- 26% are least likely to wait for food/drink at a quick service restaurants
There’s also bad news for drug and convenience stores as over 36 percent of consumers say they are least likely to stand in line for non-edible everyday products such as non-edible everyday products e.g. sunscreen, shampoo, and batteries.
“Retail technology has been proven to increase customer satisfaction, alleviate labor shortages and increase profits, and yet, retailers have been slow to adopt and in the process watched their revenues decline,” said Krishna Motukuri, CEO and co-founder of Zippin. “Our research found that 100 percent of retailers have heard of checkout-free technology, with nearly three-quarters being very familiar with the concept. One third say their company is going to introduce checkout-free to reduce in-store customer wait times. While this is great news, time is of the essence. Those who adopt frictionless retail now, will reap the competitive advantages and have staying power in this tough economy.”
Zippin invited Drew University’s Associate Professor and Chair of Sociology Christopher Andrews, and author of “The Overworked Consumer: Self-Checkouts, Supermarkets, and the Do-It-Yourself Economy,” to review its research and comment on the findings. He noted, “The fact that almost 30 percent of consumers stated they dislike self-checkout is an important message for retailers to hear. With so many deploying self-checkout kiosks to address long lines, they should realize that they are effectively turning away this group of shoppers and saying goodbye to yet more revenue.”
There is a cure for retailers’ post-pandemic hangover, and it’s within their grasp: technology designed to alleviate the pressure on the bottleneck caused by checkout. Consumers are voting with their feet and their wallets, and leaving stores built around the tyranny of barcode scanning devices and cash registers.
