Benefits and Suggestions for Self-Checkout System Implementation for ALDI in Australia

This report analyzes the benefits and suggestions for the self-checkout system implementation for ALDI in Australia. It examines the Australian industry and technological landscape and lays down the benefits and suggestions for the same.

Running head: SELF CHECKOUT SYSTEM
SELF CHECKOUT SYSTEM
Name of the Student
Name of the University
Author Note

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Executive Summary
With the changing technological landscape, the Australian supermarket sector has advanced
considerably and there have been various developments in this domain. The given report is based
on the Germany based supermarket, ALDI in Australia. As the competition in the given industry
is quite fierce in nature, there have been various steps and measures as adopted by the
competitors to assure they have the maximum market share. Hence, in this report the business of
ALDI has been analyzed and it was examined that unlike its Australian competitors, ALDI
lacked a self-checkout system which would be beneficial for its operations. Hence, the report has
examined the Australian industry and technological landscape and laid down the benefits and
suggestions for the self-checkout implementation for the same.

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Table of Contents
Introduction......................................................................................................................................3
Background of ALDI and supermarket industry in Australia.........................................................3
Current business and technology landscape....................................................................................4
Issues with regards to conducting business internationally involving the Supermarket industry
with respect to ALDI.......................................................................................................................5
Brief description and capability of Self-Checkout System..............................................................6
Impact on Self-checkout system on ALDI......................................................................................9
Strategy moving forward...............................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

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Introduction
International business is considered to be an essential aspect of the trade and various
organizations have been developing considerably by developing their technologies and ensuring
that they are successfully able to engage in trade and thereby make efficient use of all the
resources in order to gain a competitive advantage in the long run (Wu et al. 2016). As the
competition in business has become increasingly fierce, it is important to innovate and apply
those innovative components effectively for the welfare of the business. This shall also assist in
ensuring that the firm is able to sustain for longer time and is able to make adequate profits and
ensure growth (Kumar and Reinartz 2018). The primary aim of the report is to discuss the
landscape of the business which has been chosen as the ALDI Supermarket store in Australia.
The technology chosen for adaptation is the Self-checkout system. The background of the
business will be discussed along with the technological landscape of the chosen industry. The
benefits of the application of the technology will be discussed along with the capacity of it.
Background of ALDI and supermarket industry in Australia
The ALDI Supermarkets in Australia operates in the Supermarkets and Grocery Stores
Industry in Australia which is one of the most competitive industries in the country. ALDI has
grown considerably in the last few years and has changed the dynamics on the industry which
was earlier dominated by the duopoly between the Coles supermarkets and the Woolworths. Not
only has ALDI grown in popularity, but it has also grown in the market share (Aldi.com.au.
2018). The organization is popularly known for its discounted private label products.
The entrance of ALDI has led to the price wars and private label expansion among the
other firms. As a response to this, the supermarkets which are smaller in nature tend to struggle

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in this increased price intense industry. Moreover, for the individual players, the profits have
fallen down considerably. The Australian supermarket and grocery industry earned around $ 102
billion in the last few years with an annual growth rate of around 3%. Moreover, the
organizations employed around 362102 people and has a total of 1891 stores.
ALDI is from German origin and has stores in various parts of the globe. The chain was
found by Karl and Theo Albreht in the year 1946. Although the firm takes up considerable steps
to ensure that it is successfully able to combat competition, it is faced by technological advances
as adopted by the competitor organizations.
Current business and technology landscape
The market share of the different supermarkets in Australia has gone for a change
whereby Woolworths holds a 37% share which is followed by Coles with a share of 31% and
other companies with 16.2%. ALDI is currently present with a market share of 8.7%. The
business of ALDI has been doing considerably well and this has led the competitors to slash
prices and to expand their label offerings. The average price of the grocery basket has declined
by 5.1% and the prices of the different fruits as well as the vegetables has witnessed a great fall.
Although the customers have benefited greatly from this, it is the retailers who have been facing
a huge decline. According to Ibis world, over the next five years the revenue forecast will rise to
$97.7 billion in the year 2018-19. ALDI has been growing at a rate of 15% in the last five years
and there is a news that it will be expanding to Western Australia and South Australia and
witness an increase in their market share (Lee and Yang 2013). Services like self-checkout, pick
up and order online, home deliver through online applications are some of the technological
developments in the Australian Supermarkets industry.

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Hence, delivery fleets in the chosen domain has increased considerably and the
consumers generally prefer to shop online. This has led to a decrease in the operating costs of
these supermarkets and for this reason, instead of dealing with this as a challenge, the brands
have taken this as an opportunity to reduce their store costs and invest instead in online domains
(Lee, Fairhurst and Cho 2013). Hence, currently, although the other companies like Woolies and
Coles have adopted all available technology in the domain including the self-checkout system,
Aldi has not yet adopted it and believes in including the human touch aspect in the domain.
Issues with regards to conducting business internationally involving the Supermarket
industry with respect to ALDI
All international businesses possess certain difficulties while conducting business.
However, as the Australian supermarket industry is highly competitive in nature, there are a
range of problems which the business of ALDI faces in the domain (Ixtenso.com. 2018). Some
of those problems being faced have been listed as follows:
Customer service: As the bargaining power of the different customers has increased
considerably, they exert a stronger position in the industry. This can also be contributed to the
fact that as the different consumers have been faced by a wider options and different private
labels, they tend to get impatient and are not willing to tolerate the slightest of the inconvenience
(Weeklytimesnow.com.au. 2018). For this purpose, there have often been various issues in
regard to the service of the different customers.
Distributed demand: This issue relates similarly to the issue of the wider opportunities
available to the different consumers. Hence, the demand for the goods sold by Aldi including the
private label options have altered considerably (Kaushik and Rahman 2015). With the advent of

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online shopping the different organizations now prefer to shop online and distance is no more an
issue. For this purpose, even for the ALDI Supermarkets which are situated at prime locations,
the physical sales have dropped considerably.
Employee issues: As the different customers have been faced by a wide range of choices
and they can choose which company to purchase from, the employees who possess similar skills
of can change their companies frequently and even share their trade secrets which may lead to a
loss.
Additional time taken by manual checkouts: The manual checkouts have proven to be the
most troublesome aspect of the whole shopping experience for the customers (Ixtenso.com.
2018). After purchasing the products, the customers have to stand in long queue and on top of
this they have to deal with the rude behavior of the employees.
Competition: Lastly, the competition from the huge giants also act as a problem for
ALDI. This is because, although ALDI has been successful to a certain extent, the major share of
the market is still held by Woolworths and Coles (Luftman, Lyytinen and ben Zvi 2017).
Brief description and capability of Self-Checkout System
The technology chosen to be applied to the current business of Aldi is the self-checkout
system. The self-checkout system allows the different customers who purchase goods from the
stores to scan their own products and pay (Sainath et al. 2014). Although the customers and
retailers are generally worried about the acceptance of the technology, the self-checkout system
has already been adopted in various parts of the globe and by various customer segments who
find the system rather refreshing and thereby they can avoid standing in the queues and being

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served by the checkout cashiers (Baden-Fuller and Haefliger 2013). Moreover, as identified by
the previous in the previous sections ALDI faces intense competition from the different
companies and that due to this, all of the companies have adopted the self-checkout systems but
this is not the case for ALDI and hence for this purpose, the self-checkout system has been
suggested.
The self-checkout systems comprise of a large number of systems whereby the checkout
system is either partially or entirely managed by the different consumers. The self-checkouts
come in various designs ranging from stationery as well as mobile solutions and can be put up on
the inconvenience of the different retailers (Westerman, Bonnet and McAfee 2014). In the
scenario of a stationary self-checkout system, the customers can scan the items personally and
move it across the bio optic image scanner (Ibisworld.com.au . 2018). The software of the
system matches the barcode of the product scanned to its description on the system.
In this manner, the products are then placed on a different scale and then the next step
needs to be scanned. Moreover, some organizations also manage simultaneous self-checkout
systems along with manual ones.
The different capabilities of the self-checkout system is as follows:
It provides a set of instructions to the different customers: The different customers can
easily make the self-checkout system function as they tend to be provided with a set of
instructions which can then assist them in ensuring that they are able to carry out the entire
system smoothly. According to Leung and Matanda (2013), there is a simple interface which
tends to guide the different users and assists them to use the entire process. However, the
retailers need to ensure that all the products are easily available on the entire system which will

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then guide the different customers accordingly with respect to the weights and the other pricing
aspects. Moreover, using this system, the customers will also be able to redeem various gift
vouchers. This shall make the entire system very easy for the customers and the integrated cash
management systems can remain updated as well.
Mobile scanning system: The mobile scanning system is opposite to the stationery system
and using this the different customers will receive a hand held device with the help of which the
products can be scanned throughout their shopping trip (Kumar and Reinartz 2018). In this
manner, the data of their shopping gets transferred to the POS System and with the help of this,
the customers may simply pay at the end of their trip or at a separate counter altogether.
Ability to digitalize the entire system: In this manner, by adopting the self-checkout
system, the entire system tends to become digitalized (Payne and Frow 2013). This means that
the management of the different aspects of the system becomes easier and any changes which
need to be made can be done just on the POS System and will moreover reduce the burden on the
staff as well.
Experienced long term growth: The self-checkout system has been growing considerably
and the major driver of the self- checkout growth around the globe has been primarily because
the traditional checkout and queue system. In 2012, there were around 27000 self-checkout
terminals around the globe but in the year 2018 there have been 60000. However, it needs to be
understood that the self-checkout items must be less than 15 items. If it is more than that, it
might turn out to be difficult for the other customers as well.
Ability to reduce queues and inconvenience: The primary capability of the self-checkout
system is that it reduces the queues and inconvenience caused to the customers who do not like

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to wait in the traditional queues (Orel and Kara 2014). The traditional queues tend to have a
negative impact on the minds of the customers and moreover, tends to cause a bad name to the
brand image.
Impact on Self-checkout system on ALDI
The implementation of the self- checkout system will have a positive impact on the
business of Aldi in Australia. It will increase their competitiveness as compared to the other
firms in the same industry and Australia and improve the image of the organization in the eyes of
the customer (Hassan, Sade and Rahman 2013). Some impacts of the Self-Checkout system on
Aldi Australia have been provided as follows:
1. Shorter queues
When the self-checkout system will be installed at the different Aldi stores as present in
Australian Market then the customers will be served in a shorter time frame. This means that in
the same time frame, the organization will be able to make more sales and lead to less physical
activities as well. The purchases are dealt with faster in this scenario and moreover, it serves
manual labor and additional costs.
2. In-store productivity
The self-service checkout can be easily kept clean and tidy and instead the staff which
were earlier appointed at the checkout counters can now be utilized for other beneficial activities
in the stores (Elliott, Hall and Meng 2013).
3. Customer prefers independence

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Very often the different customers who are present in the store do not like to chat with
the members of the staff and would like to instead conduct their own tasks, this can be assisted
by following the self-checkout system and for those who converse in different languages, can
easily conduct the business as well.
4. Better store capacity
The store capacity can be increased (Foodnavigator-asia.com. 2018). This is because the
self-checkout systems will consume less space and this can lead to efficient operations and the
company can give more variety in the same space.
5. Economical in nature
The entire self-checkout procedure is very economical in nature as it assists the
organization by saving the employee costs and moreover, with the help of this the company can
improve its profits by making one time considerable investments.
Strategy moving forward
Therefore, as witnessed from the analysis having been made on the implementation of the
self-checkout system at the ALDI store it can be stated that it would be highly beneficial for the
organization to adopt this plan as it will lead to positive results on the side of the company.
Moreover, initially Aldi does not need to implement this system all it once in all the stated stores.
However, they need to implement the chosen system in different phases
(Retailcustomerexperience.com. 2018). In this first Phase, the company can ensure that they
implement the new system in only certain popular stores and that too there needs to be a
presence of the manual self-checkout counters as well. This will then assist the organization to
help the customers and measure the suitability of the entire procedure in the store (Drnevich and

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Croson 2013). After the customer feedback is taken from the different customers, the Aldi can
then enter into the second phase and ensure that almost all stores in Australia now have the self-
checkout system. Proper training needs to be provided to the different customers which will then
assure that they are able to make use of the entire system efficiently. Moreover, the adoption of
the system will results in good outcome for the firm. Although the Aldi has a good checkout staff
who are quite fast in their checkout process, however, implementation of the chosen system will
assist them adapting to the requirements of the different firms in the chosen industry and enable
them to be at par.
Conclusion
Therefore, from the given analysis it can be stated that, the Australian retail sector has
been evolving considerably and that there have been various changes in landscape both
traditionally and systematically. Hence, in order to keep up with the operations of the firm, the
organization needs to ensure that it will successfully be able to match up to the level of its
competition. The report identifies the current issues and state of the Australian supermarket
sector and chooses the ALDI Company as the reference. The technology related to the self-
checkout system had been recommended to be implemented and the capabilities along with the
benefits of the self-checkout system in Aldi have been assessed accordingly. The strategic way
forward has also been provided.

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