Exploring Shopper Profiles at Check Out – What Are the Distinctions and How Can Retailers and Brands Leverage Them?

A quick Google search of the phrase “self-checkout (SCO) lanes” will return myriad results – mostly negative – about consumers’ perceptions of this ever-increasing self-service retail option. The data, however, tell a different story.

Indeed, while consumer surveys also seem to suggest no one likes SCOs, data from Catalina’s Shopper Intelligence Platform shows consumers prefer to use both checkout options, depending on their shopper profile and purchase occasion, and those who do so consistently have the highest retention rates and best customer value.

The number of SCOs in the U.S. has increased 10% in the last five years, driven by growth in grocery chains where they make up 38% of lanes. CNN reports Walmart, Kroger, and Dollar General are pilot testing stores that offer only SCOs, which gained more importance during the pandemic. We see this trend happening globally as well.

With retailers continuing to make sweeping shifts from manual to self-checkout (SCO) lanes in an effort to offset shrinking margins from inflationary labor costs, respond to social distancing protocols, and take advantage of automation technology, our data indicate that a hybrid model – of self-checkout and manned checkout – will improve customer experience enabling cost efficiency over the long-term.

Assessing data from 4.5B transactions by 245M consumers that accounted for $222B in sales, Catalina segmented shopper IDs into three segments: SCO-only, manned checkout-only (MCO), and a hybrid of SCO and manned lanes. We then delved into UPC-level purchase data insights to discover what these shoppers were buying (and when) - and how that impacted retailers’ revenue.

How lane choice links to purchase behavior
Catalina data shows that, although SCO lane penetration accounted for 38% of transactions, it produced only 24% of sales. SCO-only shoppers had smaller baskets and bought less than hybrid and MCO fans. One consideration is that SCO-only customers likely either do not pantry load – or they pantry load in other channels, such as mass retailers or online. Another is that some retailers limit the number of items a shopper can purchase in SCO lanes.

Shoppers were more likely to use SCO lanes during off-peak hours, but that timeframe accounted for less than 5% of daily transactions and sales.

Hybrid shoppers produced the highest customer value ($1,720) and made 36 trips per year (2021). So, how should retailers evolve to create a balance of SCO and manned lanes to accommodate different shopper profiles?

Creating multi-dimensional shopper profiles
Shopper profiles generally group consumers by demographics and where they are on the purchase funnel – researching, browsing, price comparing, and ready to buy. Now, retailers can layer in check-out preferences and shopper affinities to create a more personalized shopping experience.

Catalina’s analysis shows MCO-only shoppers are primarily Baby Boomers and Silent Generation consumers with lower household income (under $100K) and a high school education. SCO-only shoppers also attract the Silent Generation as well as 19 to 24 year-olds. Those who use both SCO and MCO lanes are a mix of different demographics, but they typically have a higher household income ($100K+/year) than the shoppers in the other segments.

For each checkout segment, Catalina analyzed which shopper personalities and affinities rise to the top. For example, Natural Flavor Seekers and Tree Nut Avoiders use SCO lanes more than other segments while Caffeine Seekers and Partially Hydrogenated Oil Avoiders choose MCOs. Those that toggle between both options tend to be Ingredient Conscious Seekers.

Coupon use at SCO lanes
Conventional wisdom in the industry says that shoppers won’t take the time to use coupons at SCO lanes. To confirm that notion, a regional grocery retailer compared the six-month performance of SCO shoppers that received ads with SCO consumers who did not. They then measured post-campaign redemption rates to the previous year by region and type of checkout lane.

They were surprised to learn SCO lane shoppers who received coupons drove 4X more sales growth than the SCO checkout lanes with suppressed incentives. When compared with the six-month pre-period, these coupons accounted for an 181% in sales growth versus the control group, which posted a 40% increase. Data analytics show that incentives attracted new shoppers, engaged lapsed buyers, and contributed to increased store visits.

The retailer is now adjusting their in-store marketing strategy based on shopper profiles and lane mix and will look next to link it to the trip’s purpose.

As retailers plan their long-term automation strategies for checkout lanes they should:

• Think carefully about the balance of SCO and MCO lanes to maximize sales.
• Use UPC-level data to better understand how lane choice links to purchase behavior.
• Create multi-dimensional shopper profiles that include checkout preferences to entice new shoppers, woo lapsed buyers, and boost store visits.
• Work with brands to personalize offers and finesse their marketing mix based on when and how they purchase their products in-store.

Next steps
To leverage Catalina’s proprietary shopper intelligence insights– and learn how to maximize shopping lane preference data to target shoppers by their personality, shopping occasion, and lane preferences – reach out to Catalina at results@catalina.com.