Examining Self-Checkout System & its Impact on Customer Satisfaction

Dissertation
(Examining Self-Checkout System &
its Impact on Customer Satisfaction)

Table of Contents
CHAPTER 1: INTRODUCTION..................................................................................................1
1.1 Overview of research.........................................................................................................1
1.2 Rationale of the study........................................................................................................2
1.3 Research aim and objectives...........................................................................................2
1.4 Research questions...........................................................................................................3
CHAPTER 2: LITERATURE REVIEW.......................................................................................4
2.1 Overview..............................................................................................................................4
2.2 Self-checkout system.........................................................................................................4
2.3 Self-service information technology................................................................................6
2.4 Customer satisfaction........................................................................................................6
2.5 Theories related to customer satisfaction.......................................................................8
2.6 Multi-channel self-service experience.............................................................................9
2.7 Impact of self-checkout system on customer satisfaction level................................10
2.8 Literature review...............................................................................................................10
2.9 Conclusion.........................................................................................................................11
CHAPTER 3: RESEARCH METHODOLOGY........................................................................12
3.1 Overview............................................................................................................................12
3.2 Research design...............................................................................................................12
3.3 Research method.............................................................................................................12
3.3 Data collection technique................................................................................................13
3.4 Sampling method..............................................................................................................15
3.5 Data analysis.....................................................................................................................15
3.6 Ethical considerations......................................................................................................16
3.7 Limitations of study..........................................................................................................17
CHAPTER 4: RESULT AND ANALYSIS.................................................................................18
4.1 Overview............................................................................................................................18
4.2 Thematic analysis.............................................................................................................18
4.3 Conclusion.........................................................................................................................28
CHAPTER 5: DISCUSSION AND CONCLUSION................................................................29
5.1 Overview............................................................................................................................29

5.2 Discussion.........................................................................................................................29
5.3 Conclusion.........................................................................................................................32
5.4 Recommendations...........................................................................................................33
REFERENCES............................................................................................................................34
APPENDIX...................................................................................................................................37
A. Semi-structured interview.................................................................................................37
B. Sample of the online survey.............................................................................................39

ACKNOWLEDGEMENTS
I would like to express my gratitude to my parents who have supported me all the
way and have always offered encouragement throughout my educational years. I would
also like to thank my supervisor, Yuan Huang, for her assistance and finally my younger
sister Augustina and all the participants who took part in my research.

ABSTRACT
Self-checkout systems are rapidly changing the way in which supermarket makes
transactions with their customers. Supermarkets have started adopting SCS as a
mechanism to reduce the cost as well as provide high quality customer service. The
process transforms customers into co-producers. This paper examines if self-checkout
system is a reliable mechanism for cost reduction and improvement in customer
satisfaction within the retail market.
The study adopts a multiple methods approach by initially using an online survey
of 120 supermarket shoppers for empirical research. A semi-structured interview was
conducted on the managers of TESCO with an aim to identify the effectiveness of self-
checkout system as well as for identifying management’s view of customer behaviour.
Finding from the research suggests that Self-Checkout Systems are very
advantageous for supermarket. The online survey revealed that people of young age
prefer to use SCS as compared to old age groups. Speed of service and convenience
as the major factors that affect customer satisfaction are also identified. The semi-
structured interview also revealed that management views SCS as a long-term
investment which in the long run will result in cost reduction. Data from Tesco and NCR
showcases that SCS adoption is on the and due to this customer’s satisfaction is also
get enhanced. After adopting this Tesco received some benefits like high revenues and
through this they will be able to attract number of customers towards their services.

CHAPTER 1: INTRODUCTION
1.1 Overview of research
In today’s era, there is rapid advancements in technology and increased global
competition. Due to such kind of competitive environment, retailers develop new
services and machinery in order to reduce cost so that customer satisfaction can be
enhanced. Supermarket chains have chosen to employ Self-Checkout System (SCS) in
order to reduce the cost and improve customer experience while trying to resolve the
issues which are faced by industries at the time of adopting new technological
advancements on the place of traditional systems (Hernon and Altman, 2010). There
are various factors which help the company in order to bring out some changes like self-
service technology and due to this technological, scientific and environmental changes
are take place at the work environment. It has also become the prime cause of erosion
of human capital, need for fewer men on the jobs and spiked supermarket
redundancies.
Customers are now frequently using Self-Checkout Machines while visiting their
local retail stores. In the traditional system, consumers are get frustrated or dissatisfied
as they have to wait for purchasing the items from local stores and then for their
payment. So, due to which firm will not be able to convert their regular customers into
brand loyal people (Lee and et. al., 2010). It results in poor customer services as
number of purchases are get decreased to some extent because people are not
satisfied with the current services. Self-Checkout System (SCS) is a self-service
technology that aims at addressing these problems whereby customers can skip long
queues and make quick easy purchases via a computerised interface. So, the new
system helps the company in retaining their consumers and staff members.
The present report is based on Tesco which performs its operations in
supermarket or grocery. They are offering their services throughout the world so their
global image is good as compare to other market players (Orel and Kara, 2014). It is the
third largest retailer as this is measured on the basis of their profits and revenues. They
have their outlets in approx. 12 countries and listed on London Stock exchange. Thus,
firm is having a strong customer base. Supermarkets are constantly trying to reduce the
cost and increase customer satisfaction. To do this, they’ve adopted the use of Self-
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Checkout System. The purpose of this study is to verify if use of self-checkout system
can actually result in minimalizing the cost, increasing sales and improving customer
satisfaction in more efficient or valuable manner as compared to the traditional method
where manned checkout systems were used.
1.2 Rationale of the study
What is the research issue?
The business organizations have to some technological advancements so that
they can attract more customers from all over the world. The current research is
focused on an issue of self-checkout system and its impact on the satisfaction level of
customers.
Why it is an issue?
The issue has been arising due to the changing environment and the changing
requirements of people. In the competitive world, an enterprise has to adopt such kind
of innovation so that they can achieve their competitive advantage.
Why it is an issue now?
Now, the issue is arising due to high competition in the market as each and every
firm is performing better so that they can get success.
What could this research shed light on?
The present study is focused on the effectiveness of self-checkout system and the
way in which customer satisfaction can be increased. By conducting this analysis,
researcher will be able to achieve the specified research aim and objectives.
1.3 Research aim and objectives
Aim: To examine the self-checkout system and its impact on cost reduction and
customer satisfaction- A study on Tesco
Research objectives: Some objectives have been formed by the researcher so
that current study can be conducted in a significant manner. These should be clear so
that all other members who are associated with the study will be able to understand the
guideline in which project needs to be completed. Some of these objectives are as
follows:
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 To identify the effectiveness of self-checkout system which is adopted by retail
industries.
 To determine the current satisfaction level among customers of TESCO.
 To investigate the impact of self-checkout system on satisfaction level of
consumers and cost reduction
 To recommend some approaches and strategies so that firm can achieve the
competitive advantage
1.4 Research questions
Some research questions are there which are formed on the basis of aim and
objectives. On the basis of these, overall evaluation can be performed in an effective
manner so that the way in which customer satisfaction level can be enhanced through
self-checkout system will be identified. These are stated as below:
Q1. What is the self-checkout system?
Q2. What is the current level of customer’s satisfaction?
Q3. What is the relationship between self-checkout and consumer satisfaction
level?
Q4. What are the different ways through which TESCO can achieve
competitiveness?
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