October 25, 2003

Home Depot tries to cut waiting times

Home Depot is taking steps to streamline the checkout process at its stores.

Story Link

Home Depot tries to cut waiting times

The Atlanta Journal-Constitution

Local contractor Tony McAllister likes shopping at Home Depot, but he says the checkout process can be frustrating.

Sometimes lines are too long because cashiers are scarce, says McAllister, who shops various Home Depots several times a week. At other times, it's hard to maneuver carts of bulky building materials through the checkout lanes.

So it pleases him that Home Depot is taking steps to streamline the checkout process at its stores.

"That would be a great idea," McAllister said, "especially when you have a big old stack of lumber and three or four carts."

The Atlanta-based company kicked off its program to improve "front-end," or checkout, efficiency late last year, when it began installing self-serve checkout stations. Self-serve checkout is now available at about 750 Home Depot locations, including 22 in metro Atlanta.

The next steps to shave seconds off of customer wait times include installing cordless scan guns and touch-screen registers. The scan guns are used to read price codes attached to items and can be used for customers standing in line, while the touch screens are aimed at speeding up cashiers' work.

Committing time and money to reduce long checkout lines is important as Home Depot strives to improve customer service and fend off archrival Lowe's, retail analysts said.

The money Home Depot spends on the technological upgrades will pay off if it leads to better service, said Michael Baker, an analyst at Deutsche Bank Securities.

"It's an important initiative," Baker said. "The key is to improve customer satisfaction. If it does reduce customer checkout time and increase accuracy, yes, it would improve customer satisfaction."

Service complaints

Complaints about customer service have dogged Home Depot, especially since it increased the percentage of part-time workers more than a year ago. The company has since returned to using more full-time workers, who tend to be more knowledgable about home improvement issues than their part-time counterparts.

Moreover, Lowe's has stressed customer satisfaction and has been helped by the perception that its service is better than Home Depot's.

While Home Depot doesn't agree with that perception, it continues to find ways to improve its customer service. The company's latest front-end changes will work in conjunction with self-checkout lanes to reduce waiting times, said Troy Rice, senior vice president of operations.

"This is just a rollout of all these components into an integrated strategy for us," Rice said. "This isn't about a new [point-of-sale] system or about self-checkout. It's about a combination of things working together to really transform the front end of our stores."

Home Depot refused to say how much it is spending on self-checkout stations, cordless scanners and touch-screen registers. But Rice said the expenses are part of $360 million the company will spend on information technology this year.

The new initiatives will further separate Home Depot from Lowe's. North Carolina-based Lowe's does not have self-checkout, touch-screen registers or cordless scan guns, spokeswoman Chris Ahearn said. The company is evaluating whether to eventually install self-checkout stations, she said.

"We're still investigating technology options for our customers," Ahearn said.

The cordless scanners that Home Depot plans to install in all its stores by next spring will incorporate two-way communication that will allow cashiers to ring up merchandise for customers waiting in line.

The scan guns will display items that are rung up and send the information to the cash register. Cashiers then will return to the register, hit a "complete" button, collect payment and send the customer on his way.

Other large retailers use one-way cordless scanners that send information to the register but do not display what has been rung up on the scanner itself. Rice calls them "dumb guns."

Just touch the screen

The new touch-screen registers will save time because they will virtually eliminate the need for price-list books currently used at Home Depot. Cashiers will find prices by touching electronic icons on the register's screen.

"Instead of having the big black cashier look-up book they have on the register today, which takes an average of 23 seconds to look up one item, cashiers can find items right there on the register," Rice explained. "It's going to help cut down on wait time, absolutely."

Instead of having to physically amend the price books, Home Depot will be able to change prices and add items electronically across the company on a monthly basis, Rice said.

As for self-checkout stations, Home Depot plans to have them in 800 stores by year end.

At stores with self-checkout, customers should see shorter lines and a reduction in waiting times of as much as 30 percent, the company said.

But the kinks still need to be worked out, contractor McAllister said.

"I always have a hassle with self-checkout," he said. "It seems easier for me to go to a clerk. And at certain Home Depots, they never have enough clerks."

Posted by Craig at October 25, 2003 04:37 PM