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Queue Science Helps Retailers Recover Revenue at Checkout

 

If you aren’t managing the checkout area of your stores, now may be the time.  The old adage, “You can lead a horse to water, but can’t make him drink” unfortunately proves to be true in too many retail situations. Retailers can lose hundreds of thousands of dollars each year per store from customer walkaways due to poor checkout management.

If an average transaction value is $35, for example, and you have 200 walkaways per week, then you could be losing $364,000 in sales per year in each store. One retailer was losing exactly that much using lane-per-lane queue management. After switching to single-point checkout with the help of Lawrence Metal Products, the retailer saved $345,800 in a year in incremental revenue from reduction of walkaways, according to Richard Prigg, president of sales and marketing, Lawrence Metal Products.

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“Retailers spend huge amounts of time and money creating pleasant shopping environments, yet they subject their customers to stress and uncomfortable experiences at checkout,” says Prigg. “It is the last touch point with customers — the last chance to make a good impression, and too often we allow them to leave the store feeling annoyed and frustrated.”

Giving up space to increase revenue
Many retailers overlook checkout because it is a “specialist” area, says Nick Byrne, vice president of sales and business development, Lawrence Metal. Retailers also believe dedicating extra space to checkout cuts down on profitable merchandising space in the store.

Recently Lawrence worked with an 800-store retailer, proving that allocating space for proper checkout reduced checkout time from six to 1.5 minutes. “Revenues went up and sales improved,” says Byrne.

For this retailer, Lawrence instituted single-line queuing with electronic call forward. The organized queue line created efficiencies that the retailer did not anticipate. In addition, Lawrence helped the retailer set up product merchandising in the queue area which added to the total average transaction value. Items that sell well as impulse purchases in the queue can experience uplift in sales of 400 to up to 1,000%, says Byrne.

 

In addition to reducing walkaways by 92%, the single-point cueing helped to eliminate “sweethearting,” a practice in which store employees give away items to friends by not ringing up every item. With the single-lane system, customers can not choose their cashier.

Single-lane queuing also eliminates the need for queue buster personnel – employees who help direct customers to the next available line. With efficient queuing in place, queue buster personnel can be redeployed to other area of the store, improving overall customer service.

In a recent test of single-point queuing with U.S.-based TJX stores, customers reported a 94% approval rating of the system. Since the test, the TJX company has committed to convert every one of its stores.

As little as $200 per store to implement
In many cases a retail store may already have retractable barriers in place, and by adding signage and receiving some organizational help, that retailer may be able to improve their queue management situation for $200-300 per store. In other cases, if a retailer wants to add electronic call forwarding, the price could be up to $10,000 per location.

U.S.-based Lawrence Metal has achieved business success working with companies like Virgin Megastores abroad, and the company is making inroads into the U.S. with TJX and other companies including Staples and CVS.

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