Costco Checkout 🛒
Case Study • Whiteboard Challenge
1 hour time limit
Costco • Long lines at checkout
Credit for this whiteboard challenge goes to 100 Days of Product Design.
The Challenge: “We want to improve the Costco customer experience by getting rid of the long lines at checkout.
We’ve decided a self-checkout process is our solution, but we want to do better than the typical self checkout at grocery stores.
Our research has shown they’re even slower than the usual checkout lanes.”
This challenge and problem is hypothetical. I did this as a UX design exercise and portfolio piece.
I limited myself to 1 hour to complete this challenge, however, I spent more time afterwards neatly laying out the challenge and results on this page.
I chose this exercise because wholesale retail is an area I am unfamiliar with so I thought it would be more challenging. Credit for this whiteboard challenge goes to 100 Days of Product Design.
Though I did this exercise during COVID-19, because this was a hypothetical situation I did not take COVID-19 restrictions into account.
Because of the limited nature of context, time, and research given for this challenge, assumptions had to be made throughout this exercise. In a professional setting with more time and research I would intend to go “deeper” with my solutions.
The challenge I chose listed out these restraints
- 1. We’re only interested in existing technology that we can implement immediately.
- 2. We want to be sure people are paying for every item they take out of the store.
- 3. Everyone must be able to buy their goods, but not everyone should have to use your solution.
Because I limited myself to 1 hour, I needed to plan my time well to ensure I had a finished product by the end. This is how I broke it down:
1. Lay out framework
Based on my personal work style, I used InVision to lay out my project framework on a virtual whiteboard.
2. Research
Ask questions. Ponder. Gain a deep understanding of the problem and goal before building anything.
3. Problem solve
Take action and put pen to paper. I aimed to create 3 rough product ideas.
4. Scope check-in
Pause. Check the clock. Take a few moments to look at the big picture. Make sure the project is still aligned with all of the original goals, research, and assumptions.
5. Prepare proposal and wrap up
Create lo-fi mockups of the solutions proposed from step 3.
6. Conclude
Propose a solution with a rough pitch.
After that, evaluate the project holistically. Did we move the needle towards solving this problem? What would have made this product more successful?
Before diving into any action, I think it's very important to ponder, poke holes, and ask difficult questions.
Who
So who is the Costco demographic?
From some brief google research, overall it is a quite broad demographic. I focused more on behavior and discovered at trait a lot of them have in common is being called “fill up” shoppers. This means usually they are purchasing 11-20 items at a time, thus filling up a cart. There will be more on the persona later in this piece.
What
During this exploration phase I was really curious why self-checkout was chosen as the optimal solution? My thought was this was a classic case of a company jumping to action on solution for a problem they have yet to explore.
Maybe with training the cashiers could checkout faster? Maybe the long lines are from them being understaffed?
Because of the nature of this challenge I had no way to ask questions so I didn’t go to deep on this topic. In a real work environment I would have asked questions upfront to dig deeper into what the core of the problem really was, and why Costco thought that self-checkout would solve their problems.
Where
Location is a critical part of any brick and mortar store, especially with more and more consumers turning to online ordering and curbside pickup.
Again, this would be an area where I would try to ask questions to reveal insight into the core of the problem. Are there certain stores this is a bigger problem than others? Could the layout of the store be part of the issue?
When
When does this problem strike up? Based on quick google research, 52% of shoppers go on Friday, Saturday or Sundays.
What is the timeline for this project? In the original challenge text it was stated “We’re only interested in existing technology that we can implement immediately.” However, “Immediately” is not a very helpful timeline.
I anticipate we would want to beta test the solution at a store for roughly 6-12 months where they have a medium average of foot traffic. If successful, then roll out the solution to other stores with higher traffic.
Why
This challenge is a great example of the power of collaboration. Working on this alone left me with more questions than solutions.
Why solve for this problem in the first place?
Are the slow line times contributing to a loss in revenue? Is upper management is being pressured by shareholders?
Has research shown customers are coming less often because of the lines? Are shoppers opting to order online with because they don’t want to spend time in a line?
I wanted to get a rough idea of the pain point Costco was solving for with this creative project, so I sketched up a user persona to help me get in the head of your typical "fill-up" Costco shopper
USER STORY – LEWIS
Recently Lewis decided it was time to finally get the Masters degree he was putting off.
As online night classes started up for him, he’s found it difficult to get everything done on his day-to-day list alongside his classes and assignment deadlines. Not to mention, his friend and family relationships were feeling strained as well.
As classes only picked up, many weeks later Lewis was venting to a friend about how pressed for time he felt. After a bit of back and forth, his friend recommended Amazon Fresh as a solution for groceries and household supplies.
Lewis was torn.
Lewis likes Costco. He’s a loyal customer and whether he wanted to admit it or not, the act of shopping at a brick-and-mortar store was enjoyable. It offered him a sense of routine and it also gave him an excuse to step out of the house so he could catch up on his audiobooks or enjoy some quiet time away from the kids.
With the lines at Costco only getting worse lately, he sometimes had to dedicate a whole afternoon just to make a trip to get groceries and household goods for the week. To avoid the lines he started going early in the morning, but that made him feel rushed which threw off the whole shopping experience.
The math just didn’t add up. At his wit’s end, Lewis downloaded the amazon app and put together an Amazon Fresh order.
Moving forward some months later, Lewis was now hooked on the convenience of Amazon Fresh over Costco trips. He’s been replacing the majority of his weekend Costco visits with scheduled orders from Amazon Fresh.
TLDR: The convenience of saving roughly 3-4 hours a week with Amazon fresh over in person Costco trips has allowed him to live the lifestyle he wants to while he completes his masters degree.
So now with Lewis in mind, I set out to solve how Costco can win back our customer Lewis.
Idea #1
Scanner Carts
Implement new technology that would allow you to self scan items as you add them to a cart in store.
If the carts had a screen UI we could even combine this with Idea #3 Timed Daily Deals (see below).
Once done shopping, the shopper can go directly to the express payment lane where a register would verify the contents of the shopper’s cart, take payment, and send the shopper on their way.
Idea #2
Order Ahead + Pickup
Create a pre-order and pickup service through Costco’s site or as a mobile application. Then shoppers could pick up directly outside the store lowering the overall foot traffic and even lowering the need for hiring cashiers.
Another version of this could be to allow shoppers to prefill certain cart items and have them ready in a cart before a shopping visit, thus reducing the overall shopping time.
Because some customers still prefer to physically shop at the store, but this would speed up there overall time at the store if they know they will buy certain items before a visit.
Idea #3
Timed Daily Deals
This idea is based on the stat that 52% of shoppers go on Friday, Saturday or Sundays that I discovered through my research.
Costco could launch deals at certain times of day to incentivize shoppers to go on “off days” or hours that they typically don’t shop at.
This would even out the traffic throughout the week/month.
I decided Idea #2 - Order Ahead + Pickup was the best solution
Based on the constraints and goals of this challenge, I decided the best fit for solving this problem would be Idea 2 – Order Ahead + Pickup.
The reason why:
- Though I believe Idea #1 – Scanner Carts is the best idea to solve this problem, because of Constraint 1 (see above) this would likely take a very long time for a large company like Costco to implement. Thus I moved on from it despite it being my favorite idea.
- Though Idea #2 – Order Ahead + Pickup idea is the least “flashy” in my opinion I think it is the most effective. I think this is a key point to make, because not every decision needs to be an “app” or a shiny new piece of tech. Many companies have seen success with curbside pickup and order ahead services, so why reinvent the wheel.
- This solution seems like it would be the most cost effective solution. Though implementing Idea 3 – Timed Daily Deals would be the fastest, I don’t believe the impact would be as high as order ahead technology for this demographic.
- Based on Constraint 1 We’re only interested in existing technology that we can implement immediately this would be the one of the easier solutions to implement and beta test at select locations.
Order ahead flow rough mockup
With the 1 hour restriction I was not left with much time to make detailed product sketches.
Post Challenge Checklist
Did the solution stay within the proposed assumptions + constraints?
✓ We’re only interested in existing technology that we can implement immediately.
Costco has a website with shopping functionality. It’s very possible they could rapidly build out a beta version and roll it out at specific locations.
✓ We want to be sure people are paying for every item they take out of the store.
Customers will pay ahead of their visit.
✓ Everyone must be able to buy their goods, but not everyone should have to use your solution.
This order ahead solution is completely optional. However, based on our user persona it is likely it would be adopted by a % of customers that value convenience over a traditional shopping experience.
Did we become a painkiller or gain creator for the customer?
Painkiller in this situation. Providing more shopping options so customers can shop how they want should create an overall more positive experience for Costco shoppers.
Did we move the needle towards the solving the problem?
“We want to improve the Costco customer experience by getting rid of the long lines at checkout.”
Without testing it’s hard to say. But But even if say 10-20% of shoppers opted to use our new pickup option, it would likely reduce the crowding that happens on bottleneck shopping days like Friday, Saturday, and Sunday.
How will we be able to tell if this solution is working?
Measuring this would be difficult. Perhaps reviewing security camera footage and looking at average line size? I wonder if there is a technology like this that could heatmap line density or track average checkout time.
As it turns out Costco has been looking into curbside pickup for a bit now. However, recent traction seems like it’s been spurred due to the COVID-19 pandemic.
- 2018: CostcoGrocery launched on Costco.com; 2-day and same-day delivery via instacart October 2017. Source
- 2021: After not having previously offered a click-and-collect option, Costco Wholesale has begun piloting curbside pickup for groceries at several warehouse clubs in New Mexico. Source
2021: Costco’s test comes as rivals, such as Walmart (WMT), Kroger (KR) and Amazon (AMZN)-owned Whole Foods, have also expanded their own curbside pickup offerings during the pandemic. Source