For years, automation in grocery retail has been measured primarily through labour savings. The business case was built around reducing front-end workload, shortening queues and improving operational efficiency.
New IDC research commissioned by Diebold Nixdorf suggests retailers are increasingly evaluating automation through a different lens. The research found that 97 per cent of Australian retailers now link self-service directly to revenue growth, while 69 per cent of consumers now prefer self-service as a leading checkout option.
Self-service is no longer an emerging technology; for many shoppers, it has become the preferred retail experience. These findings point to a broader shift in how retailers measure technology investments, away from cost reduction alone and towards revenue growth, customer experience and operational performance.
The real question, as Kristie Longhurst, General Manager Retail ANZ at Diebold Nixdorf, puts it, is no longer how many hours automation saves, but what business outcomes it enables.
Labour savings are only part of the story
Grocery has a labour problem, but it is not simply a shortage of people. It is where those people end up standing. In a lot of stores, an associate spends much of a shift monitoring a bank of self-service lanes, watching for a light, waiting for something to go wrong. That is coverage. It is not contribution.
Meanwhile the shopfloor is stretched thinnest exactly when it matters most: shelves need facing, produce needs checking, and customers need someone who can actually answer a question. The technology question worth asking is not how many hours a system removes. It is how many hours it moves to where they count.
This reflects a broader industry shift. Retailers are increasingly evaluating automation based on business outcomes rather than labour reduction alone, a trend highlighted throughout Diebold Nixdorf's recent IDC research.
Most shrink is not what operators think it is
One of the biggest misconceptions in grocery retail is that every checkout anomaly represents intentional theft.
In reality, many losses stem from operational friction rather than deliberate behaviour. A barcode that did not read, an item left in the trolley, a customer who is distracted or managing a toddler and a basket at the same time: these are exactly the kinds of issues retailers are increasingly trying to solve through automation and intelligent store technology.
That matters, because the response to an honest mistake should look nothing like the response to intentional theft. If the system treats every anomaly as suspicion, it generates friction for honest shoppers, confrontation for staff, and a great deal of noise for very little recovered stock.
The alternative is simply to help people fix it themselves. A quiet prompt when something looks like it has not scanned gives the shopper a chance to self-correct before anyone is called over. It works as a deterrent and as a courtesy at the same time.
In grocery environments where this approach has been deployed, shrink reductions of more than 50 per cent have been reported, with staff interventions falling by around 15 per cent as shoppers correct the mistake themselves.
The stock is recovered. The customer is not accused of anything. Nobody has to have an awkward conversation.
The value that sits behind the checkout
Once a store has a vision platform in place, the checkout stops being the only thing it can usefully watch. This is where grocery gets more from the investment than most other retail formats, because grocery has more that can go wrong.
Cold chain is the obvious example. A door left ajar, a case drifting out of range overnight, a unit failing quietly on a public holiday weekend: any of these can cost more in a single incident than a year of front-end shrink. Automated monitoring catches it while it is still a maintenance job rather than a write-off.
The same platform can flag a spill before someone slips on it, identify misplaced stock and support compliance monitoring across the store. These are not glamorous use cases. They are simply the things that occupy a store manager's day, and the reason the return compounds is that they run on infrastructure the store already has.
Safety is an operations issue
Staff safety sits close to the top of every grocery operator's list, and it is closely tied to how technology is designed. The goal is to keep unnecessary interactions away from staff altogether, and to make sure that when someone does need to step in, they are not walking in blind.
Early visibility matters here. A short piece of video context before an intervention tells an associate what actually happened, which changes the tone of the conversation entirely. Most incidents escalate because someone approached a situation without knowing what they were approaching.
Fewer confrontations is not a soft benefit. It shows up in retention, in incident reports, and in whether people want to work the late shift.
One platform, many jobs
The reason all of this hangs together is that retailers are increasingly moving away from standalone technologies. The strongest business cases emerge when multiple capabilities operate on a connected platform rather than as separate investments.
Age verification, loss prevention, cold chain, safety and customer flow can run on the same connected platform, with each capability making the others more valuable. That is what changes the economics. A single-purpose system has to justify itself alone; a connected platform earns its keep several times over.
“Retailers aren't investing in automation to remove people from stores. They're investing in it to help associates spend more time serving customers and less time managing repetitive tasks. When retailers judge self-service and automation purely on labour saved, they miss much of the value. The strongest performers are measuring it through customer experience, operational outcomes and business growth,” said Kristie Longhurst, General Manager Retail ANZ at Diebold Nixdorf.
For grocery retailers, the question is no longer whether automation reduces labour costs. The more important question is how effectively it improves customer experience, reduces operational friction, enables better use of store teams and supports revenue growth.
Download The Evolution of Self-Checkout in Australia, IDC research commissioned by Diebold Nixdorf, to discover why 97 per cent of Australian retailers now link self-service directly to revenue growth and what the findings reveal about the future of automation, customer experience and operational performance.
