Retail leaders see self-checkout as central to the Middle East retail revolution

In the Middle East, physical retail is an inseparable and defining part of life. Shoppers seeking more enriching experiences look to malls, local shops, and markets as the main hubs of activity in the region. However, the recent pandemic forced consumers and retailers to adjust, causing a wave of new technologies that bring convenience and fluidity to their shopping experience.

Young consumers are quicker to adapt to these changes. As such, they have more varied needs; they want diverse, global products, personalised promotions, and cashless, seamless checkout.

Retailers in the Middle East know they have numerous hoops to jump through to be successful. The region has a long history of customers expecting luxurious experiences in stores. At the same time, inflation is a constant concern, the pressure on margins is ever-increasing, and labour shortages are causing disruptions in stores.

Retail innovation is a never ending dance of trying to balance customer experience and operational efficiency. MishiPay doesn’t have all the answers. However, it has solutions that can solve a multitude of the issues facing many retailers in the region.

How? Self-checkout technology.

Self-checkout is an umbrella term. It can mean everything from the familiar kiosks in a grocery store to a scan-and-go app on a mobile device. Here’s how all of the various options are impacting different sectors and how retailers are finding ways to adjust to realize a plethora of benefits.

Customer Experience and Self-Checkout

We spoke to six industry leaders in the area to find out where they are in this journey, how they’re adjusting, and how ROI is improving. It turns out customer demand is leading the charge.

“One of the things that is very important to us is the in-store experience, both in terms of environment and customer service. We invest heavily in ensuring exceptional customer service, and self-checkouts are an extension of that,“ added Tom Harvey, commercial general manager of Spinney’s Dubai.

Consumers value speed and convenience above all in their shopping experience. Self-checkout delivers on both fronts, offering a swift transaction process that is highly appealing to the modern shopper.

While self-checkout prioritises efficiency, the human element of retail — the personalised touch and assistance — can’t be sacrificed. Thankfully, a well-designed self-checkout flow considers customers' varied needs and preferences, ensuring that human interaction, when needed, is informative and pleasant.

“As a retailer, if I want to stay ahead and develop a competitive advantage, I have to think ahead and anticipate what customers expect. I need to be the first one to implement something like self-checkout. The revolution we see today is coming from the customer,” said Zied Hammami, executive director of Retail at Sharjah Co-op.

Self Checkout Is Shown to Lower Operating Costs and Improve Store Profitability

Beyond enhancing customer experience, an efficient self-checkout system can dramatically cut operational expenditures, thereby elevating a store’s profitability.

Labour is one of the highest costs in the retail industry. Self-checkout helps slash this expense by allowing a single staff member to monitor multiple terminals instead of a cashier for each point of sale. Staff can be redeployed to more value-adding activities such as helping customers with product discovery or restocking shelves in grocery stores.

Self-checkout is not just about reducing labor costs, though. It can optimize a store's overall operation by requiring a small footprint and less expensive hardware that, in turn, maximizes retail space and drives lower energy costs.

Frederic Levy-Perault, CEO of Alraya, mentions, "We don’t need heavy hardware. We are based in the cloud. We’re consuming 67 per cent less energy."

This, in turn, positively impacts shopping flow, minimises bottlenecks, and has a cascading effect on storewide efficiency. People who want to get in and out fast may opt for a kiosk, which reduces wait times at the cashier. Longer lines at the cashier will incentivize more people to use the kiosks. It all works together harmoniously.

Self-Checkout Enables Data-Driven Decision

With every transaction processed, self-checkout systems generate a tidal wave of data. Retailers that harness this information can drive strategic decisions and outperform the competition by giving consumers more personalised recommendations and promotions.

Accurate and timely inventory management is vital to retail success. Self-checkout data can provide real-time insights into buying patterns, popular products, and stock depletion, allowing for proactive inventory control and better stocking decisions.

Ashish Panjabi, COO of Jacky’s Retail, said: “The big advantage of self-checkout is the access to more data about the customer. We can now map out the buyer’s journey in more detail. As a retailer, it was extremely difficult because the customer wasn't willing to share that level of information.”

Self-checkout provides the platform to collect customer data, enabling retailers to precisely target their marketing efforts. By analysing purchasing behavior and demographic information, businesses can tailor promotions that resonate with their core customer base, thereby increasing sales and customer satisfaction.

“We want to look at what people are spending on and figure out how customers spend their money. What kind of products? We can plan marketing and promotions around it if we have enough data. Also, we’re looking at how you’re getting users to use their customer data more meaningfully. I think that data helps us market better,” stated Rajiv Warrier, CEO of Choithrams.

The bigger picture for self-checkout data reveals trends that help identify growth opportunities. Understanding which areas of the store are underperforming or which product lines are experiencing increased demand allows retailers to enhance store layouts, product placement, and overall performance.

Is Self-Checkout Worth the Cost?

Self-checkout terminals have transitioned from a novelty to a ubiquitous feature of modern retail. Despite a late start, recently changing demographics and consumer patterns have accelerated the adoption of such devices.

Any technological implementation must justify the investment to gain traction. The cost of implementing and maintaining self-checkout has come down significantly in recent years due to innovative new solutions like MishiPay that come at lower costs, fast implementation times and quick payback periods.

Any new technology should make the status quo 10x better, as just marginal, incremental improvements are not enough. When executed with precision, self-checkout systems can foster brand loyalty, enhance data analytics, significantly increase store revenues, and improve bottom-line figures. Early retailers are reaping the rewards, and now others are racing to get on board.

A Smart Investment for Middle Eastern Retail

The Middle East has always been quick to embrace innovation and technology. Self-checkout has already seen large-scale global adoption, with 80 per cent of the top 100 retailers in the world offering some form of self-checkout in-store. The accelerated adoption of self-checkout systems in retail now marks a significant step towards digitization in all aspects of life in the Middle East.

We’re sitting in the eye of a perfect storm. All of the factors at play, from a young consumer mindset to the use of digital wallets and the rising pressure of inflation, are prepping retailers for an inevitable shift. Self-checkout technology will prove to play a pivotal role in changing the face of retail in the Middle East. At the forefront of this change are retail partners like MishiPay, leading this self-checkout technology revolution and helping make this transition seamless for the retailer and the consumers.

• KT Network