OM in the News: Wal-Mart’s “Checkout Promise” to Speed Queues
My mother-in-law recently commented that she won’t shop at Wal-Mart anymore, primarily because the checkout lines are too long. It turns out she is not alone. The Wall Street Journal (Aug.15, 2014) writes that “to lure more customers this holiday season, Wal-Mart is promising to staff each of its cash registers from the day after Thanksgiving through Christmas during peak shopping times.” The move, called the “checkout promise,” is aimed at addressing my mother-in-law’s very complaint.
“Taking the possibility of waiting in long lines off the table will attract more people into stores,” says the chief merchandising officer. The move comes as Wal-Mart has struggled to win back U.S. shoppers after 7 straight quarters of falling traffic. Many customers have ditched the chain in favor of quicker trips to smaller rivals. The company also has battled with complaints about too many out of stock items and empty shelves. Refilling shelves alone could bring back $3 billion in sales.
Wal-Mart’s supercenters typically have about 30 traditional checkout lanes—giving it more than 100,000 across the U.S.—but the number that are staffed varies throughout the day. It has made aggressive use of technology to cut back on labor costs and more precisely schedule checkout lanes based on real-time demand. But the drop in traffic and customer complaints have forced it to reassess the economics of that approach. After increasing the number of self-checkout systems across its 4,000 U.S. stores, longer lines began forming at its staffed checkouts to deal with customers with more complicated and time-consuming transactions, such as shoppers who use coupons.
The company also recently nixed “Scan & Go,” a program which allowed shoppers to use their mobile phones to scan items as they walked through stores and pay at self-service kiosks, skipping the cashiers’ lines. Wal-Mart said the process was too complicated for customers.
Classroom discussion questions:
1. How has technology complicated Wal-Mart’s queues?
2. What other approaches could the company try to speed up lines?