Self-service here to stay, ready or not
Self-checkout technology is knocking on SA’s shopping aisle. But will it cause a retail jobs apocalypse?
New technology and shifting customer behaviour may be the source of ire for banking unions, but it won’t stop local firms from unveiling tech that has the potential to take away the customer-facing role of workers.
Last month, JSE-listed Altron became the only SA company accredited to sell NCR self-checkout terminals for SA retailers, through its subsidiary Altron Bytes Managed Solutions (Altron BMS). NCR is an Atlanta-based tech firm which manufactures these self-checkout kiosks.
Self-checkout, introduced to customers more than two decades ago, has become something of the norm in European and North American markets. Resistance to its introduction in SA is a valid one: automation will replace jobs at checkout aisles, in a country which has structurally high unemployment. SA’s jobless rate reached 29.1% in the third quarter of 2019.
Three years ago, Pick n Pay piloted self-service terminals at a store in Cape Town. But the move was met with sharp resistance from workers, and later abandoned.
Pick n Pay tells the FM that in spite of its 2016 trial, it has "no plans to roll these out". Woolworths will say only that it will review in-store customer experience in the context of trends and convenience.
"CCTV, point of sale and other technologies are an important part of this landscape," it says.
Still, Altron BMS MD Chad Baker says the firm is in discussions with retailers including Pick n Pay, Shoprite, Spar, Makro, Builders Warehouse and Woolworths.
As a concept, self-service machines are not foreign to SA. In 2007, the Airports Company SA introduced them at airports.
NCR’s "FastLane" self-checkout technology lets a customer scan items at self-service tills then pay using a speed point.
Altron BMS says the terminal can help reduce checkout waiting times by up to 40%.
It also says retailers can redeploy workers from front-end checkout duties to provide services elsewhere within the store — from answering in-aisle questions to restocking shelves.
But with retailers under pressure to produce returns in a strained market, this "redeployment" seems unlikely.
Gryphon Asset Management portfolio manager Casparus Treurnicht says: "The reasons mentioned for upskilling and transferring labour to other more value-enhancing areas carry little weight."
DIY and fashion retailers are probably the only stores where customers can benefit from direct assistance, says Treurnicht.
In the internet age, self-service has taken the form of phone apps that have replaced the need for consumers to go into a bank to transact, pay bills, buy airtime and even apply for loans.
And those changes have prompted threats of strike action. Bank employees were interdicted from embarking on a countrywide protest in September. Their beef is with retrenchments in the sector directly linked to the greater adoption of tech.
Cosatu parliamentary co-ordinator Matthew Parks says banks can’t be allowed to retrench while they are still making profits, even though workers are being let go because of changes in technology. He says solutions must be found to keep people employed.
But banks say retrenchments are not about profitability but more about shifting consumer behaviour, which has resulted in more people choosing to do their banking online rather than in branches notorious for long waiting times and poor customer service.
"Self-service in SA will happen no matter how customers, labour, government and the private sector feel about it," says Treurnicht.
"In simple terms, Takealot is already bypassing cashiers. Look around you and you will see that queues are becoming a thing of the past. Fast food already has self-service.
"People tend to be worried about how many jobs will be lost. But the reality is that unfriendly cashiers are another reason to cut the fat out of company expenses," he says.
The contagion has even spread to other types of consumer-facing operations, such as the customer care centres of pay-TV operator MultiChoice. DStv earlier this year said it has started a retrenchment process that could result in up to 2,194 employees losing their jobs at its customer service operations. The company said changes in customer service were a response to evolving behaviour as subscribers opt for digital platforms instead of telephone or walk-in services.
MultiChoice now has self-service kiosks at its customer care centres. Subscribers are more likely to use its website and chatbots to resolve queries that would have previously necessitated a store visit.
But Baker says the ability to make better use of space in retail locations is another benefit of the kiosks. The small footprint of Altron’s terminals allows for three or four terminals in the same space as one traditional till terminal.
Self-checkout could also be a complementary offering to traditional check-out lanes. And in its pilot projects, Baker says Altron has experienced no theft using the system, which can track weight and prices and also has cameras and indicator lights to clear a transaction.
In its recent robotics forecast, the International Data Corp predicted that by 2024 half of structured, repeatable tasks will be automated and 20% of workers in knowledge-intensive tasks will have artificial intelligence-infused software or other digitally connected technology as a "co-worker".
The extent to which this will apply to SA, and when, is debatable. The local market may not be totally ready for such a development yet, but the shifts in consumer behaviour that drive such changes have already taken place.
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