The Impact of Self-Checkout Services on Customer Experience at Tesco

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RESEARCH PROJECT
REPORT
Impact of self-checkout services in
supermarkets- A Case of Tesco

Abstract
New self-service technology includes the self-checkout services wherein a customer can scan
and pay their shopping without any assistance with checkout operator. This technology has
been increasingly used by the retail supermarkets in order to minimise the checkout and
waiting time and enhance customer satisfaction through superior customer service experience.
This study was conducted to identify the overall impact of self-checkout services on customer
satisfaction at the Tesco supermarket. A structured and close-ended questionnaire was
conducted to assess the influence of self-checkout services and the level of customer
satisfaction. The findings and result of the study are useful for Tesco in order to understand the
perception of the customers towards the service quality of self-checkout services and improve
customer satisfaction. At last recommendations are provided in order to minimise the problems
related to services quality of self-checkout services and level of customer satisfaction at Tesco.
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Acknowledgements
I would like to thank the store manager …………………… and deputy store manager ……………… at
Tesco supermarket and owe my gratitude for providing support and essential information
during the questionnaire survey stage of the research.
Also, I would be thankful to my colleagues ……………………………………… who provided me with
some of the valuable information related to self-checkout services and helped me in developing
the questionnaire.
I would like to thank ………………………………………………… who helped me by sending their valuable
research work through email and helped me in doing my literature review.
Finally, I have no words to express my most sincere gratitude to my supervisor…............... I
would like to offer my earnest gratitude with the word ‘thanks’ for <….> valuable feedback,
patience, guidance and sincere communication for encouraging me and enabling me to
accomplish my study.
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Table of Contents
Abstract......................................................................................................................................... 1
Acknowledgements....................................................................................................................... 2
SECTION 1: INTRODUCTION...........................................................................................................5
1.1 Introduction to topic............................................................................................................5
1.2 Situation Analysis.................................................................................................................5
1.3 Problem Statement..............................................................................................................6
1.4 Research Questions............................................................................................................. 7
1.5 Objectives of study.............................................................................................................. 7
1.6 Limitations of study............................................................................................................. 7
1.7 Scope of study......................................................................................................................8
1.8 Hypotheses.......................................................................................................................... 8
1.9 Organization of Thesis..........................................................................................................8
SECTION 2: LITERATURE REVIEW...................................................................................................9
2.1 Reviews................................................................................................................................ 9
2.2 Gap Analysis.......................................................................................................................12
2.3 Conceptual Model..............................................................................................................13
SECTION 3: METHODOLOGY/PROCESS........................................................................................14
3.0 RESEARCH METHODOLOGY............................................................................................14
3.1 RESEARCH ONION...........................................................................................................14
3.2 RESEARCH PROCESS....................................................................................................... 15
3.2.1 RESEARCH PHILOSOPHY..........................................................................................15
3.2.2 RESEARCH APPROACH.............................................................................................15
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3.2.3 RESEARCH STRATEGY.............................................................................................. 15
3.2.4 CHOICES...................................................................................................................16
3.2.5 TIME HORIZONS...................................................................................................... 16
3.2.6 DATA COLLECTION...................................................................................................16
3.2.7 RESEARCH INSTRUMENT.........................................................................................17
3.2.8 RESEARCH DESIGN...................................................................................................17
3.2.9 SAMPLES...................................................................................................................17
3.2.10 SAMPLE SIZE AND SAMPLING TECHNIQUES...........................................................18
3.3 ACCESSIBILITY ISSUES.....................................................................................................18
3.4 ETHICAL ISSUES.............................................................................................................. 18
SECTION 4: RESULTS/ FINDINGS.................................................................................................. 19
SECTION 5: DISCUSSION AND EVALUATION.................................................................................31
SECTION 6: CONCLUSION AND RECOMMENDATIONS.................................................................32
SECTION 7: REFERENCES..............................................................................................................33
APPENDICES................................................................................................................................. 34
Appendix A: Postgraduate Taught Research Ethics Application Form.....................................34
Appendix B: CONSENT FORM FOR PROJECT PARTICIPANTS....................................................38
Appendix C: Questionnaire......................................................................................................39
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SECTION 1: INTRODUCTION
1.1 Introduction to the topic
The advancement in technology resulted in a change in the interaction among the customers
and the organizations. Introduction to self-service technology in the retail sector has
dramatically influenced the nature of service organizations and also the delivery process of
service. Self-service technology is referred to as the benefits or the activities which are based
on technology and is carried out by the consumer themselves (Sorescu et al., 2011). There is
increasing usage of self-service technologies among the supermarket industries. These
technologies are considered to be a key solution for the supermarkets with high transaction
volume, high traffic flow and a large number of stock keeping units.
Self-checkout services are one of the service choices being popular among the supermarkets in
recent years. It allows retailers to provide a mechanism for the customers in order to process
their won purchases in the retail market (Lee and Yang, 2013). It is beneficial for both the
retailer and consumer as it reduces the cost for the retailer and improves customer experience.
Self-checkout services have gained popularity in the UK similar to that of in the US grocery
stores. Significant investments have been made by supermarkets such as Tesco, M&S, and Asda
in the technology. A store is operated by Tesco in London that is equipped with 60 per cent of
the self-checkout services.
Tesco is one of the biggest supermarket chains in the UK that was commenced in 1919 by Jack
Cohen in order to sell surplus groceries from a stall. It is a leading retailer that serves millions
of customers through over 6,800 shops around the world by employing 440,000 colleagues
assisting for around 80 million shopping trips per week (Tesco, 2018). The statutory revenue of
Tesco is £57.5 billion for the year 2018 and the group sales are £51 billion in 2018. Tesco
installed self-checkout services in its UK stores in 2003 and has installed more than 12,000
across the country. This research project is focused on identifying the impact of self-checkout
services in supermarket chain with special reference to Tesco (Tesco, 2018).
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1.2 Situation Analysis
Self-services technologies are increasingly used by retail services such as banking, airlines and
supermarket chains. Self-checkout services are one of them as it is a technology that allows the
users to get services by themselves without relying on any service provider (Hilton et al., 2013).
There are various advantages and disadvantages regarding the use of these services within the
retail organization such as Tesco. These self-service allows the consumers to get fast and
without delay services thereby increasing their customer experience while it hinders the
customers as they may be unaware of its usages and often requires technical assistance (Lin
and Chang, 2011). The retailers are able to cut their cost and labour requirements while theft,
and unhappy customers and malfunctioned equipment may hinder the retailers. Thus this
forms the basis to analyse the impact of self-checkout services in the supermarket with
reference to Tesco.
1.3 Problem Statement
Since self-service technology that is self-checkout services are being used by the retail
organizations due to its advantages in cost-cutting, speed and convenience. It is been assumed
by the supermarket that these services increase the satisfaction level of the customers and
enhance their customer experience thereby ultimately increasing their loyalty towards the
brand (Oh et al., 2013). Therefore it is essential to understand the impact of self-service
checkouts in Tesco supermarket.
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1.4 Research Questions
1. What are the reasons to adopt self-service technologies by Tesco supermarket chain?
2. What are the benefits and drawbacks of using self-checkout services to the customers in
Tesco supermarket chain?
3. What are the benefits and drawbacks of using self-checkout services to the stores of
Tesco supermarket?
4. What is the impact of self-checkout services on customer satisfaction of Tesco
supermarket?
1.5 Objectives of the study
The aim of the research is to identify how self-checkout services impact the Tesco supermarket
chain. The research objectives are:
1. To review the literature to identify the adoption and impact of self-checkout services in
the retail industry
2. To identify the reason for adopting the self-checkout services within Tesco supermarket
3. To ascertain the benefits and drawbacks of using self-checkout services to the
customers of the Tesco supermarket chain.
4. To discover the impact of self-checkout services on the customer satisfaction of Tesco
supermarket
1.6 Limitations of the study
Time availability is one of the major limitations of the study. Also, limitations in cost and
resources affected the accomplishment of the study effectively. The aim and objectives of the
research were broad which added to the limitation. It was difficult to create willingness and
desire among the participants to take part in the research (Chih-Hung Wang, 2012). It may also
be considered that the response of the participants may not be reliable and may be unclear and
partial which may have affected the data collection and analysis. The geographical area is not
selected to conduct the studies affecting research reliability and effectiveness. Also, the results
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could not be generalised to the total retail population. The basis for this study is the secondary
research that is secondary sources were included in the study thus it may add its limitation in
the present study.
1.7 Scope of the study
Qualitative and quantitative research will be carried out in this study to reach a reliable
conclusion. The views and insights of the individuals regarding the use of self-checkout services
will be included in this research. It considers the ethical considerations while collecting data and
dealing with the individuals while in interactions (Wang et al., 2012). Questionnaire survey will
be included in the study considering the Tesco supermarket and responses will be collected
from individuals. This research does not cover any other self-service technologies other than
self-checkout services. Also, it focuses only on Tesco supermarket and does not include another
supermarket chain. It does not consider any geographical boundaries in the study.
1.8 Hypotheses
1. The services quality is positively perceived due to attributes of self-checkout services.
2. Self-checkout services positively impact customer satisfaction of Tesco.
1.9 Organization of Thesis
The first section of the research is an introduction which includes the introduction situation
analysis, research, aims and objectives. Research question and hypotheses are framed in it
along with describing the scope and limitation of the study. The second section comprises the
literature review that determines the key concepts and theories in order to provide a platform
for the current study (Wang et al., 2013). Gap analysis and a conceptual model is also included.
Methodology or process is outlined in the third section depicting the tools and techniques
employed for conducting the research.
Section 4 discusses the results of findings of the study representing through graphs and
interpretation. Section 5 represents the discussion and evaluation on the basis of the results
and findings of the study. At last section 5 concludes and recommends based on results and
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findings of the study. Also, references related to the research and questionnaire is attached in
the appendix section in the study.
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SECTION 2: LITERATURE REVIEW
2.1 Reviews
SELF-SERVICE TECHNOLOGIES
The value is created for the customers by the retailers as articulated in the retail business
model. The business models include innovations which have become critical in order to build
sustainable advantage in the marketplace as it is defined by insistent change, escalates
customer expectations and intense competition. The 3 core elements of the retailing business
model are activities, retailing format and governance (Sorescu et al., 2011). Six major ways
were proposed for the retailers in order to improve their business models for enhancing value
creation as well as appropriation value. A framework is offered to the retailing managers and
guides innovations in the business model of retail for sustainable competitive gain.
Despite the significant amount of literature on technology acceptance models, the role of
technology readiness of the consumers has been overlooked in the past reaches during the
adoption of self-service technologies. Another study by Lin and Chang (2011) aimed at filling
the gap through development and testing the model that integrates the role of technology
readiness into the technology acceptance model. It was found that the technology readiness of
the customer increases perceived ease of use, perceived usefulness, and attitude towards use
as well as intention to use.
Hilton et al (2013) stated that the major role is played by the employees in the services
experience of the customer. The customer service employee experiences are replaced with the
customer technology experience due to self-service technology. This qualitative study was
confined to the perspectives of the customers towards using self-service technology. It was
found that the SST is embraced as an efficient and economic mechanism for co-creating value
with the customers when just shifting responsibility for service production (Hilton et al., 2013).
Risks were identified when the customer is turned into partial employees thereby concluding
that the value should be perceived by the customers as they gain by using SST to be
proportionated as their co-production role.
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The study by Chih-Hung Wang (2012) focuses on the experiences as well as consequences of
consumer satisfaction in using self-service technology in a retail setting. The data from 424
respondents was collected, who had experiences regarding the use of multimedia kiosks at
convenience stores in Taiwan. It was found that the consumer satisfaction along with perceived
control plus convenience is affected by perceived usefulness as well as perceived enjoyment
resulting in an impact on continued behaviour intention of the consumer.
SELF-CHECKOUT SERVICES
Self-service technologies are been increasingly used by the shoppers of the supermarkets
during their shopping processes. These SSTs are mainly used by the retailers to minimise the
costs as well as enhancing the experience of the customer. The most popular choice is self-
checkout systems among the supermarkets in order to reduce cost and increase speed and
inconvenience with the aim to enhance the satisfaction and experience of the customers along
with their loyalty (Orel and Kara, 2014). The result is that loyalty is positively influenced by the
service quality of the self-checkout system through the path of customer satisfaction.
The trust, as well as the subjective norm on the attitude and behavioural intentions of the
consumers, is analysed by extending and revising the basic technology acceptance model. It
was revealed that the attitudes and behavioural intentions of the consumers are significantly
affected by the trust while the intention to adopt is affected by subjective norms.
It becomes essential with the creation of self-scanning technology to identify the factors
impacting the intention to use the customers for completing their retail transaction. This study
comprised the influence of technology readiness on the intentions to use the technology of
self-scanning by the consumers; it also assesses the consumer technology readiness impacts to
what extent on perceived fun and perceived reliability of using self-service technology (Elliott et
al., 2013). It was found that the intention of using self-scanning technology is leased by the
technology readiness which in turns directly and positively impact perceived fun and perceived
reliability to use self-service technology.
Retails uses self-checkout counters in order to provide better customer services as well as
achieve high productivity rates however the resistance from the consumers affect its
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