X5 Retail Group, a leading Russian food retailer that operates the Pyaterochka, Perekrestok, and Karusel retail chains (LSE and MOEX ticker: “FIVE”), has begun installing self-checkout (SCO) machines developed in-house at Pyaterochka proximity stores across all of its geographies. Through mass implementation of self-service technologies, X5 seeks to minimise contact between customers and store personnel. With 1,435 self-checkouts already installed at 369 stores, the plan for 2020 is to have a total of 12,000 units operating.
The self-checkout system is the first hardware and software product developed entirely in-house by X5’s innovation lab. Compared to similar self-service systems, X5’s machines cost four times less to mass-produce while offering superior functionality. Five Russian enterprises are engaged in the assembly process, which creates additional jobs for the local population.
Following pilot testing in August and September 2019, the SCO rollout was given the go-ahead. Thanks to bulk purchases of components, the cost of self-checkouts was brought down by a further 25%. Technical support and maintenance are fully integrated into stores’ existing IT system, which makes these devices five times less expensive to operate compared to counterparts. In a poll of 32,000 customers, the machines received an average rating of 4.8 out of 5.
The pilot testing results showed that sets of four self-service machines taking up the space of one regular checkout can cover up to 40% of store traffic. Certain pilot stores reported up to 7% traffic growth thanks to faster checkouts. The average purchase using a self-checkout unit took just 44 seconds. Self-checkouts help increase stores’ retail sales by several percentage points, shorten queues, and boost NPS.
X5 Retail Group CEO Igor Shekhterman said: “Mass implementation of self-checkouts across our retail chains has been overdue for several years. However, high procurement and maintenance costs made the investment unattractive and inhibited the rollout to thousands of our stores. The new self-checkout systems that X5 has developed entirely in-house represent a major breakthrough for the Russian retail market. They are already transforming the shopping experience for millions of our customers and improving our NPS, retail sales and traffic.”
Self-checkout units will be installed at both new-concept and some existing Pyaterochka stores. Starting April 2020, these machines will be piloted at Perekrestok supermarkets.
X5’s innovation lab continues to improve its self-checkout solution, taking into account feedback from customers and store personnel. The new version features a weighing platform and an optimised internal layout, with some components being standardised. This solution is the first step towards implementation of a comprehensive self-service system encompassing SelfScan, Scan & Go, faster payments (QR code), and facial payment systems. The self-checkout can be adapted to accommodate new usage scenarios and payment methods thanks to its 3D camera for Face ID purchases, as well as a microphone and speakers for voice services.