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FAQ: Why You Need It
1. What are the benefits of LaneHawk?
LaneHawk is primarily a tool for reducing BOB loss. But LaneHawk has other benefits as well: improving front-end productivity, reducing material handling for cashiers, reducing injury claims from cashiers, and improving customer satisfaction.2. On average, how much does LaneHawk save?
Most customers experience losses of around 0.1% of front-end sales from lost BOB items because of forgetfulness or theft. LaneHawk reduces those losses by more than 80%. If you are selling $10,000 per day per lane, you will end up saving about $8 per lane per day, or nearly $3,000 per lane per year. And we have observed some retailers losing as much as double that amount.One other point to make — this recovery will not only increase your revenues (by capturing what you should have been paid for those items), but it will also reduce your shrink. Since you've already paid for the item and the overhead associated with that item, every BOB dollar recovered flows straight to the bottom line. 3. How do you know what our BOB losses are?
There are several data points to consider — first, we have conducted extensive mystery shopping (in which the mystery shopper pays for items in the basket, but not on the BOB, and tries to see if the cashier or bagger catches them) across more than 40 retailers and nearly 2,000 shopping trips. The average "success rate" (i.e., rate of lost BOB items) is 62% — in other words, nearly 2 out of every 3 transactions with BOB items can potentially walk out of the store unpaid. While bottom-quartile chains lost in excess of 80%, even top-quartile chains lost an average of 40-50% of BOB transactions. So the problem is widespread.We're different from other retailers. Second, while mystery shopping provides an indication of how easy it is for a customer to leave without paying, it does not address perhaps the biggest source of BOB loss — cashier collusion and sweethearting. The 2004 Supermarket Shrink study estimated that 35% of total shrink was attributed to cashiers. Third, our extensive pilot data analysis across nearly 1 million transactions — which matches images of every BOB item to see if it was rung up in the TLOG — indicates around 0.1% of front-end sales are lost, which translates to around $10 per lane per day for a typical retailer. While there is some variation, we have even found significant losses in "low shrink" stores. But if you want to quantify these losses specifically for your chain, the best way to do that is to contact us. 4. So what is a typical ROI for LaneHawk?
For a retailer losing around 0.1% of front-end sales, LaneHawk can generate a simple payback of less than 12 months. For larger chains with more than 10 lanes per store and sales of more than $10,000 per lane per day, the ROIs can be even more attractive.5. What does LaneHawk cost?
LaneHawk yields first-year ROIs approaching 100% and payback of 12-18 months for most retailers. Enterprise licensing is available for larger chains, and financing or leasing options are also available, which could make LaneHawk's benefits even more attractive.6. How much productivity benefit is there?
This will vary by the amount of typical BOB traffic in a store, and how your cashiers normally transact BOB items. One customer's industrial engineers estimated a 7 second savings for each BOB transaction from using LaneHawk. If your cashiers typically manually scan each BOB item, or come around the lane and either hand-scan or place a sticker on each item, the productivity benefit of using LaneHawk could be even greater. Because it's difficult to quantify these savings, however, we do not even include this benefit in our ROI calculations except on a qualitative basis.7. How much improvement in Workers' Comp is there?
Because this benefit is even harder to quantify than productivity improvement, we have not included this in our ROI calculations. Anecdotally, numerous store managers have related that at least one or two cashiers at any moment in time are unable to work because of lifting-related injuries or incidents. LaneHawk won't prevent all of these lost-time incidents, but it can significantly reduce the number of times a cashier needs to bend over and lift a heavy, bulky item on the BOB.8. How do shoppers respond to LaneHawk?
With LaneHawk, shoppers don't have to pick up items on the bottom of the basket. And, they make it through the line faster, too.9. Can't I just train my cashiers to be more attentive for BOB items?
BOB-specific training for cashiers can help reduce losses — for a short time. But with so much emphasis on productivity and throughput, and such high turnover, the impact of that training is eventually diminished or lost.10. I've got baggers in every lane; shouldn't they catch the items?
Baggers can help to some extent. But our mystery shopping found that even with baggers, the loss rates averaged nearly 40% (in other words, only marginal improvement). Baggers are often focused on their task, just as cashiers are — and BOB items tend not to be a high priority. In some cases, baggers can exacerbate the problem; cashiers think the bagger will catch the item, baggers think the cashier has already rung it up, so the item is lost.11. What if I just remove the bottom of the basket?
True, this will largely solve your BOB loss problem. But it will also significantly — and negatively — impact your revenue, average transaction size, and customer satisfaction. Also, most retailers are "super-sizing" their packaging to compete with mass merchants or warehouse clubs. Take away the bottom of the basket, and an 18-pack of paper towels can fill almost the entire basket. One retailer has estimated a $2 improvement across every transaction from putting the bottom of the basket back on the cart.12. What about RFID?
In numerous discussions with retailers and people familiar with RFID, the consensus is that item-level RFID in grocery is at best many years away. RFID is clearly a useful technology for managing the supply chain (pallet- and case-level), but several hurdles remain before we see it in the front end of a grocery store. First, the technology does not work effectively with metal (think soda cans and shopping carts), liquid (the vast majority of BOB items), and large, dense products (most other BOB items). Second, the cost of applying the RFID tags, and installing RFID readers across all the checkout lanes, will need to come down significantly before it is widely adopted. Third, RFID creates a two-edged sword: it enables each item — not just SKU — to be unique; while this can help with item-level tracking, it will require major changes to how the POS item file is structured and how data is warehoused and managed. We believe that if RFID ever reaches the item level in grocery, LaneHawk will be a complementary technology, or at worst, will have returned your money 5-10 times or more.13. What about other BOB detection systems?
Video- or Infrared-based BOB detection systems, which are usually connected to a buzzer or chime, and some type of lighted display (for example, "Check under Basket"), have proven over time to be ineffective. Cashiers complain about high false-positive rates, or simply become immune to the buzzers and flashing messages. The reason? These solutions cannot recognize a BOB item, and are not integrated with the POS, so therefore do not require the cashier to actually process the BOB items. LaneHawk is the only BOB solution that can not only help cashiers to include BOB items as part of the transaction, but also help them handle those BOB items faster and with less effort.
More FAQs: Installation
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