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Retailers Adding $555 Billion Headwind To The Economy Due to Long Lines

Alice Chan Jan 13, 2023 5:00:00 AM
Retailers are dealing with a double whammy of hiring woes and consumers who are no longer willing to deal with long checkout lines.

At Zippin we spend a lot of time and energy better understanding the challenges retailers are facing, and thinking about consumers’ experiences in stores and how they can be improved. To that end, we recently commissioned two studies: one amongst U.S. consumers and another with brick-and-mortar retailers. The goal was to validate and cross-reference the experiences of each group in this post-pandemic world to get the whole picture. The results are pretty jaw-dropping.

A Headwind To the Tune of $555 Billion

Retailers are dealing with a double whammy of hiring woes and consumers who are no longer willing to deal with long checkout lines and instead, are turning heel and leaving stores, both of which hit where it hurts: the bottom line. 

We are in the midst of unprecedented times: an unpredictable economy, rocketing inflation, a surprisingly stable job market, and a sensitive stock market. In the aftermath of the pandemic (and we’re not suggesting it’s over), many retailers are facing a decline in revenue after the boom of pent-up demand that came in late 2020 and 2021, along with hiring headaches as frontline workers abandoned their posts. They can ill-afford to leave money on the table.

For their part, consumers were happy to adopt the touchless, frictionless benefits of Covid19 such as curbside pick-up, home delivery, and contactless payments. Today, they are frustrated and intolerant of the long queues caused by a lack of staffing and slow adoption of tech solutions, and this matters, because brick-and-mortar retailers still account for 85.2 percent of retail transactions according to the U.S. Department of Commerce.

Eighty percent of shoppers said since the pandemic they have had to stand in line more often when shopping in a retail store. More than half we surveyed stated that in the last 12 months they have left a store without buying anything because the line was too long. Of those, 84 percent said they have done so at least twice in the last year alone. We estimate this is placing an additional headwind on the economy to the tune of at least $555 billion.

Tough Measures Haven’t Worked

And retailers are aware of the situation. Ninety-two percent of retailers admit that wait times during busy periods have had a negative impact on their company's revenues. And while they have adopted some tough measures to try and address this, none have solved the problem and many have led to additional financial losses.

  • 45% have reduced opening hours (e.g. eliminating early or late shifts) on an ongoing basis
  • 41% have executed a short-term temporary closure (e.g. at least a few hours) of at least one of its stores
  • 26% have canceled expansion plans (e.g. the opening of a new store)
  • 21% have permanently closed stores including 9% who have closed multiple stores

Tech Is The Answer

The good news is that four out of five retailers are planning to use technology to solve problems at the checkout in the form of either self-checkout or checkout-free. However, they should pay careful attention to the fact that nearly 30 percent of consumers declared their dislike of self-checkout. Let’s face it, who wants to be an unpaid worker when you go shopping? 

And there’s a new generation of shoppers coming through the doors who are even less likely to patiently wait in line, and instead will vote with their wallets by leaving empty-handed. Our research found that Gen Z consumers are more likely to quit because of a long line, with nearly three-quarters sharing they have left a store in the last year, compared to less than one-third of Baby Boomers.

The message for retailers: there is no time like the present to adopt AI-powered solutions that will increase customer satisfaction, reduce shrinkage and boost profits. Forward-thinking organizations are already turning checkout-free and reaping the rewards.





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