As the grocery industry continues to evolve at a breakneck pace, driven by digital disruption, changing consumer preferences, and cut-throat competition, established market leaders can‘t afford to rest on their laurels. Kroger, the largest supermarket operator in the United States with nearly 2,800 stores and over $121 billion in annual sales, knows this reality all too well. In a bid to stay ahead of the curve, the retail giant has aggressively pursued innovation, launching everything from robotic warehouses to ghost kitchens.
One of Kroger‘s most ambitious experiments to date was the Scan and Go service, first piloted in 2018. The concept was simple: customers could use a smartphone app or handheld scanner to ring up their own groceries as they shopped, then breeze through self-checkout and on with their day. No more waiting in long lines behind that guy disputing expired coupons, no more realizing your cart won‘t fit in the tiny self-checkout corral. It promised to be a frictionless dream for shoppers and a labor-saving boon for Kroger.
Spoiler alert: it wasn‘t. Just three years after launching Scan and Go, Kroger announced they were pulling the plug, shuttering the service in all 400-some stores where it had expanded.
So, what went wrong? As a retail industry insider and finicky Kroger shopper myself, I‘ve dug into the Scan and Go saga to unpack what we can learn from Kroger‘s ultimately unsuccessful foray into scan-and-go tech. The story offers valuable lessons not just for Kroger, but for grocers and retailers of all stripes grappling with how to adapt to a digital-first future.
The Anatomy of Scan and Go
Before we examine why Scan and Go failed to take off, let‘s take a closer look at how the system actually worked. The premise was to shift the scanning and bagging process from the end of the shopping trip to the beginning and middle, so shoppers could fly through checkout at the end.
Customers had two options for ringing up their own groceries:
- Use one of Kroger‘s proprietary handheld scanners, picked up at the entrance to the store
- Download the Scan and Go smartphone app and use their device‘s camera to scan items
With either the scanner or app, shoppers would first log in to their Kroger Plus account, ensuring they received all their accumulated fuel points and digital coupons. Then, as they added items to their physical cart, they would scan the UPC barcode to add it to their digital cart.
For most packaged products, that was it – scan the barcode and drop it in the cart or reusable bag. Produce priced by weight did require an extra step of looking up the PLU code, placing the item on the scale, and entering the quantity.
As customers scanned, the app or device kept a running tally, so there was no sticker shock at checkout. And for those prone to supermarket impulse buys (guilty!), items could easily be removed by rescanning and selecting "delete".
When it was time to check out, Scan and Go users had two options:
- Pay directly through the app via stored credit card, debit card, or Kroger Pay (the chain‘s own digital wallet) and head straight for the exit
- Swipe a card on the handheld scanner and complete the transaction at the self-checkout kiosk, without needing to rescan any items
In terms of the technology involved, Scan and Go was fairly straightforward compared to something like Amazon‘s Just Walk Out, which uses computer vision AI, sensor fusion, and deep learning algorithms to create a truly automated experience. Kroger‘s app simply scanned barcodes and tallied purchases, while their handheld devices were essentially souped-up versions of the scanners long used by cashiers and self-checkout stations.
The Business Case for Scan and Go
So, what was the upside of Scan and Go for Kroger? On paper, quite a lot:
Labor savings – With more customers ringing up their own orders, Kroger could potentially reduce the number of cashiers on each shift. Given that cashiers account for around 150,000 of Kroger‘s 435,000 employees, even a small reduction could translate into huge savings.
Faster checkout – Long lines are a major pain point in grocery, leading to abandoned carts and lost sales. If Scan and Go could cut average wait times and get shoppers out the door quicker, it would effectively boost Kroger‘s sales capacity.
Competitive advantage – Retailers are waging an all-out war for market share, and tech-enabled experiences like Scan and Go offered Kroger a way to stand out. Rival Walmart had tested its own scan-and-go app in 2018, so Kroger likely saw it as a necessary play to keep pace.
Improved loyalty – The Scan and Go system incentivized digital engagement by requiring a Kroger Plus login. More customers using the app meant more data for targeting offers, more fuel points to keep shoppers coming back, and more chances to communicate with customers outside the store.
Make no mistake, these were the right motivators. With 80% of shoppers believing automation will make grocery shopping easier, Kroger was smart to explore frictionless checkout. Unfortunately, the realities of implementation quickly tarnished Scan and Go‘s promise.
Where Scan and Go Stumbled
No one but Kroger knows exactly why they decided to wind down Scan and Go, as the company kept details of the program‘s performance close to the vest. But based on my analysis and insider knowledge of the grocery business, here are the most likely factors behind its demise:
Low adoption – For Scan and Go to make a real impact, Kroger needed a critical mass of customers to get on board. Internal documents reported by Business Insider reveal that adoption peaked around 20%. At that rate, the labor savings just didn‘t pencil out.
Shrinkage – Loss prevention is a huge challenge with any self-checkout system, and Scan and Go was no different. The same Business Insider report indicated that stores testing Scan and Go saw an increase in inventory loss. Whether intentional or accidental, items not being scanned posed a major threat to profitability.
Operational headaches – While simple in concept, executing Scan and Go at scale is no small feat. Stores needed to maintain a big fleet of handheld devices, with spares to swap out when technical issues arose. Employees had to be retrained on assisting Scan and Go users. When something went wrong, it created confusion and frustration for everyone involved.
Clunky produce process – As a picky shopper who carefully selects each apple and head of lettuce, I can attest that the process of weighing and looking up codes for produce with Scan and Go was a hassle. Produce can account for over 10% of total supermarket sales, so friction at this step was especially problematic.
Lack of meaningful time savings – For many shoppers, the most appealing aspect of Scan and Go was the ability to avoid long checkout lines. But with relatively low adoption, lines didn‘t disappear. And the most time-consuming parts of grocery shopping – walking the aisles, comparing products, and bagging your items – remained largely unchanged whether you scanned as you went or not.
In short, Scan and Go asked a lot of customers – learning a new behavior, putting trust in an app, and potentially interacting with glitchy tech – without dramatically transforming the shopping experience. As sexy as the dream of skipping the line might sound, the reality wasn‘t seamless enough to hook the everyday shopper.
The Missing Pieces
So, if Kroger‘s initial attempt at Scan and Go didn‘t quite hit the mark, what can they and other retailers learn from the experience? How might the concept be evolved and elevated going forward?
In my view, three key pieces need to fall into place for scan-and-go technology to reach its full potential:
1. Nailing the tech – For widespread adoption, using Scan and Go needs to be completely intuitive and error-free. That means perfecting the app UX, ensuring devices stay charged and connected, and building more intelligence into the system – think computer vision that can distinguish produce items or smart carts that can sense unscanned items.
2. Cracking the code on produce – No way around it, self-scanning produce is clunky. Retailers need a more seamless solution, whether that‘s scales that instantly print barcodes, image recognition tech that knows its kale from its cauliflower, or ditching codes altogether in favor of pay-by-weight at self-checkout.
3. Making it worth customers‘ while – Simply offering Scan and Go isn‘t enough. Grocers need to sell the benefits through clever marketing, in-store promotion, and meaningful incentives for giving it a try. Tying Scan and Go to loyalty programs is a start, but what about perks like a dedicated checkout lane, bonus rewards, or personalized coupons pushed to your phone in real-time?
Beyond the Supermarket
While I‘ve focused on grocery, it‘s worth noting that interest in scan-and-go systems extends across the entire retail spectrum. Convenience stores, drugstores, big box retailers, and even shopping malls are all testing their own twists on letting customers skip the checkout line.
The common thread is a burning desire to eliminate points of friction and merge digital and physical experiences. Today‘s shopper increasingly expects to move seamlessly between channels – browsing on mobile, picking up in-store, paying via app, earning rewards with each purchase. Retail winners will be those who can stitch together a truly omnichannel journey.
The Long Checkout Line
While Kroger is retooling after its first Scan and Go attempt fell short, I firmly believe they‘re on the right track. Even Amazon hasn‘t cracked the code yet on Just Walk Out, and they have a lot more money and digital savvy to throw at the problem.
Like self-checkout before it, technology that lets customers handle the entire shopping journey themselves will become more prevalent in the years to come. It may not be a straight line from here to there, but Kroger and other major retailers will keep iterating until they land on the right formula.
In the meantime, I‘ll be watching from the checkout line – the really long one, with that chatty cashier who always has some story about her grandson. What can I say? I‘m still a bit old school. But even stubborn shoppers like me may be swiping and scanning before long if these retail giants have their way.
