Methodology

how long a typical shopping cart lasts

• To determine how long the typical shopping cart lasts, we found information about such from five different industry sources (four executives/directors and one company).
•  The first industry executive is Craig Smith who is the owner of a shopping cart retail distributor company called Premier Carts which is based in Kansas. According to Smith, "[m]ost shopping carts last four to six years in high-volume stores." However, Smith further notes that shopping carts "can last longer if they are kept inside and taken care of."
• The second industry executive is Jesse Roche who is a director at a Florida-based company called Jimco Maintenance Inc. which provides a "preventive maintenance program" for shopping carts. According to Roche, "carts will last eight years with Jimco's preventive maintenance program, while carts on a reactive maintenance program will last four years, and carts with no maintenance will last two years."
• The third industry executive is Phil Goodell who is the president of a "[Tenn[essee]-based shopping cart distributor [called] Good L Corp." According to Goodell, carts that are not located in "tough, urban" places "should last over five years." Goodell also notes that "shopping carts should be inspected and repaired at least annually."
•  The fourth industry company is Swanson of America. According to Swanson, "[m]ost [shopping] carts will last at least five years in high-volume stores and seven to 10 years in medium-volume stores if they are kept in good working condition." Swanson also notes that shopping carts should be repaired "after 12 to 18 months to avoid excessive repair costs."
•  The fifth industry source is Dennis Curtin who is a director at the supermarket chain Weis Markets, which is based in Pennsylvania. According to Curtin, "[t]he [shopping] carts last an average of seven years."

calculating the average length of time a shopping cart lasts

• Given the similar, yet slightly differing estimates of how long typical shopping carts last, we decided to average the time estimates provided by the aforementioned, five industry sources instead of relying solely on any one of them to the exclusion of the other credible sources.
• Before we do so, we want to reiterate that most of the above sources noted that the amount of time a typical shopping cart lasts depends on factors such as how busy the store is, maintenance/repair, and weather.
• Also, some of the sources provided more than one time-duration range based on such factors.
• Since our goal is to determine how long a typical shopping cart lasts, we first listed the low and peak range of the time spectrums provided and then determined and utilized the averages within those ranges for calculating how long a typical shopping cart lasts (with those calculations included below).
• The average length of time for how long a typical shopping cart lasts, according to the above-mentioned industry sources are as follows: (1) 4-6 years; (2) 2-8 years; (3) more than 5 years; (4) 5-10 years; and (5) 7 years.
• For the sources that provided time ranges, we used the average within those ranges for calculating how long a typical shopping cart lasts.
• Those averages are as follows: (1) 5 years (the average of 4-6 years, since 4+6 = 10 and 10/2 = 5); (2) 5 years (the average of 2-8 years, since 2+8 = 10 and 10/2 = 5); and (3) 7.5 years (the average of 5-10 years, since 5+10 = 15 and 15/2 = 7.5).
• Lastly, for the source that said shopping carts "last over five years," we used five years as the data point because it was the sole concrete number provided by that source.
• Next, we used those averages that we calculated and the concrete numbers provided by the other sources and added them together as the first step in calculating how long a typical shopping cart lasts.
• That calculation was as follows: 5 + 5 + 7.5 + 5 + 7 = 29.5.
• To calculate the average, we then divided that sum (29.5) by five (the number of data points used), which equals 5.9.
• Thus, according to our data-based calculation, a typical shopping cart lasts 5.9 years.

additional, INTERESTING information about shopping carts

• In addition to the above information about how long a typical shopping cart lasts, we also found some more interesting information about shopping carts.
• First, we found that "[m]ost manufacturers of polyurethane wheels [which are used on shopping carts] state the average life of a wheel is 2 years. So replacement of wheels should only happen upon the wear and tear of an approximate 2 year cycle."
• Second, according to the president of a shopping cart manufacturer, between "20 million to 25 million sets of [shopping cart] wheels [are] on retail sales floors at any given time."
• Third, the average grocery store in the U.S. has between 200 and 250 shopping carts.
• Lastly, the shopping cart has been around since 1937.

RESEARCH STRATEGY

ASSUMPTIONS/CALCULATIONS

• Cost of purchasing a shopping cart = $90-$200

• Cost of replacing one = $75-$125

• Cost of maintenance for seat belt, caster and rear wheel of 5 carts = $151.92

• For one cart, cost of seat belt, caster, and rear wheel maintenance = $151.92/5 = $30.384 per two years and $15.192 per year

• Cost of welding = $50-$100 (assuming it is welded once every year)

• Pressure washing = $0.50-$1.00

• Annual cost of pressure washing = $0.50 x 12 months to $1 x 12 months = $6-$12, annually.

• Total maintenance cost per year = [($15.192+$6+$50) to ($15.192+$12+$100)] = $71.192-$127.192, which is approximately $71-$127

• The annual cost of buying, maintaining and replacing a single shopping cart = cost of purchase + cost of replacing + total maintenance cost per year.

• The annual cost of buying, maintaining, and replacing a single shopping cart = [($90+$75+$71) to ($200+$125+$127)] = $236-$452

COST OF BUYING A SHOPPING CART

• A shopping cart typically costs between $90-$200 in the US. However, the types of shopping carts used by grocery stores may vary, as well as their cost.

• The types of shopping cart and their cost variations include; liquid store cart ($125-$175), double basket cart ($150-$200), smaller metal cart ($150-$200), heavy-duty small/medium/large cart ($125-$175), and extra large cart ($150-$200).

• For shopping carts that employ anti-theft technologies which enable them to lock their wheels and prevent theft, the price may be double.

COST OF MAINTAINING A SHOPPING CART

• The annual cost of maintaining a shopping cart is between $71-$127

• The procedures involved in maintaining a shopping cart range from wheel/caster repairs, handlebar replacements, seat belt replacements, pressure washing, frame straightening, and welding.

• Carts and Parts, Inc sells a 5-cart replacement kit which contains ten rear poly cartwheels, ten front swivel casters, and ten black seat belts for $151.92.

• Pressure washing of shopping carts cost as low as $0.50-$1.00, while welding of carts cost from $50-$100, depending on the level of damage.

• Shopping cartwheels/casters have an average lifespan of two years.

COST OF REPLACING A SHOPPING CART

• According to the Food Marketing Institute in Washington, grocery stores lose around 12% of their shopping carts every year, and for retailers such as Walmart, it can cost between $75-$125 to replace one.

METHODOLOGY

THE LARGEST SHOPPING CART COMPANIES IN THE U.S.

METHODOLOGY

TOP VENDORS FOR AUTOMATED CHECKOUT SOLUTIONS FOR GROCERY STORES

• According to the market research report by Psmarket Research, in 2017, North America had the largest share in the self-checkout systems market. The report identified key players in the market that have large market revenues as NCR Corporation, Toshiba TEC Corporation, Diebold Nixdorf Inc, IBM, and Pan-Ostan.
• Another market research report by Markets and Markets identified the key players in the U.S. self-checkout systems market as NCR Corporation, Toshiba TEC Corporation, Diebold Nixdorf, ECR Software Corporation, and Pan-Oston Co.
• In reference to the market research report by Open PR, the key vendors in the self-checkout market space in the U.S. include IBM, NCR Corporation, Toshiba TEC Corporation, Versatile Credit, ECRS, and Diebold Nixdorf.

1. INTERNATIONAL BUSINESS MACHINES CORPORATION (IBM)

• IBM has been operating in various IT markets since 1928 and the company offers award-winning products and solutions by pioneering in disruptive technologies such as AI, blockchain, and quantum computing for various industries including the retail industry.
• IBM has over 3,000 researchers in 12 labs that are spread around six continents.
•  IBM's self-checkout systems offer better flexibility for self-checkouts at grocery stores where customers have the ability to deploy both cash handling and cashless models in the same store.

• Website - IBM's website can be accessed here. 
• Revenue - $79.59 billion. 

2. DIEBOLD NIXDORF INC

• Diebold Nixdorf is an end-to-end solution provider for strategic hardware and software solutions in the financial and retail outlets. The company has an implementation of more than 1 million retail POS solutions in about 90 countries and through its self-checkout solutions, it claims to have saved approximately 300 million hours annually.

• Diebold has around 23,000 employees that include 1,900 trained software experts operating in more than 130 countries.  
• The company offers various award-winning self-checkout solutions to grocery stores and other retail outlets.

• Website - Diebold Nixdorf's website can be accessed here. 
• Revenue - $4.609 billion. 

3. NCR CORPORATION

• NCR Corporation has been operating for more than 130 years. The company offers various innovative solutions in payments, self-checkout, and barcode scanning to organizations in a number of industries. These organizations include banks, grocery stores, restaurants among others.
• The company offers faster and more efficient self-checkout solutions to grocery stores where the sales items that are viewed on digital displays use NCR self-checkout. In addition, "more than 1 million people view digital signs that are powered by NCR."

• Website - NCR Corporation's website can be accessed here. 
• Revenue - $1.80 billion. 

4. TOSHIBA GLOBAL COMMERCE SOLUTIONS

• Toshiba Global Commerce Solutions is a U.S.-based subsidiary company of Toshiba Japan.
• The company offers innovative commerce solutions and it is considered as one of the first choices in integrated in-store checkout solutions for grocery stores and retailers in the U.S. and in 70 other countries globally.
• Toshiba Global Commerce Solutions has around 2,000 employees and the company has installed its commerce solutions in 60% of top 25 retailers worldwide.
• The company has over 3 million systems in place and an estimated 1 million lanes of retail POS software worldwide.

• Website - Toshiba Global's website can be accessed here. 

• Revenue - $155.5 million. 

5. PAN-OSTAN CO

• Pan-Ostan is the provider of Utopia, the official self-checkout solution for the National Grocers Association (N.G.A).
• The company claims to be offering the smartest and simplest self-checkout solutions in the market based on years of focus groups and testing of various solutions.
• Pan-Ostan's grocery self-checkout system allows direct communication with data from the back office system of a grocery store. This feature allows the reduction of the need for POS upgrade integration costs thus allowing a change of POS providers without sacrificing software applications. The feature also allows stores to continue to use existing hardware and peripherals. 

• Website - Pan-Ostan's website can be accessed here. 

• Revenue - $150 million. 

6. ECR SOFTWARE (ECRS) CORPORATION

• ECRS offers agile grocery POS system and retail management solution that is full-featured, fast, and reliable.
• The company provides a customer-centric transaction experience to retail outlets with its friendly and engaging automated self-checkout system. This allows such outlets to have "a comprehensive solution that enables efficient HQ management for grocery retail."

• Website - ECRS' website can be accessed here. 

• Revenue - $23 million. 

METHODOLOGY

FINDINGS

• Estimates for the market size of the global self-checkout market:

• As estimates provided by QY Research ($2,520M) and Prescient & Strategic Intelligence ($2,522.1M) are the same, and they are for the year 2017 (not 2016), we used the $2,520 million estimate to triangulate the market size of the US grocery store self-checkout market.

• According to Transparency Market Research, the North America market size is $813.4 million. This translates to a market share of 35.68% (813.4M/2,280M) of the global market. Therefore, in 2017, North America’s market size for self-checkout counters was $899 million (35.68%*2,520M).

• To calculate the US self-checkout market size, we assumed that the share of the US market in North America’s self-checkout market is in the same proportion as its GDP. The GDP of the US makes up 85.44% of North America’s GDP--calculations have been shown in the attached spreadsheet. Therefore, the US self-checkout market is worth $768 million (85.44%*899M).

• GM Insights estimates that the size of the UK’s self-checkout market is $240 million (100M+30M+20M+ 50M+25M+15M). Approximately, $100 million of this market can be attributed to the retail vertical. Therefore, retail comprises 41.67% (100M/240M) of the self-checkout market in the UK.

• As UK is a developed market like the US and the adoption of self-checkout kiosks across different verticals—retail, entertainment, healthcare, hospitality, travel, etc.—is likely to be the same, we assumed that the retail vertical in the US self-checkout market will also comprise 41.67% of the whole market. Therefore, the size of the US retail self-checkout market is $310 million (41.67%*768M).

• Retail comprises “hypermarkets, supermarkets and departmental stores, convenience stores, and others, where ‘others’ include grocery stores, pharmacies, and other small-sized stores”. Given that the purpose of this research is to understand the potential of the market for self-checkout systems used in grocery stores like Kroger and Publix (supermarkets), we have understood this to mean the entire retail vertical. Also, the largest use of such systems in the retail space is at supermarkets that are looking to minimize wait times and offer hassle-free checkouts to consumers.

CONCLUSION

CONSUMER PREFERENCE and CHARACTERISTICS

• Customer feedback: According to Dylan McMahan, a Scan, Bag, Go specialist, grocery stores such as Kroger decided to implement an automated checkout system based on customer feedback expressing interest in spending less time in the checkout lines, especially customers who are in a rush. The customer feedback was received through customer surveys and social media polls.
• Technology savviness: Grocery stores also determine the locations to install an automated checkout system based on the digital activeness and technology savviness of the target customers shopping at that location. This is measured by the number of customers who use digital coupons and regularly utilize a self-checkout system at the location.
• Repeat purchases: In 2011, the grocery store Kroger installed automated checkout systems in its stores as these systems were inducing customers to make repeated trips to the grocery store by enhancing their shopping experience.

LABOR COST

• Reduction in labor costs: According to Adrian Beck, a professor at the University of Leicester, one of the major consideration while installing automated checkout solutions is the reduction in labor cost. Labor costs such as wage bills are usually the largest portion of a retailer's expenses. Installing automated checkout solutions would significantly reduce this cost. For example, at a retail store, a single supervisor was able to single-handedly oversee 23 self-checkouts systems, thereby reducing the labor costs at these checkout systems. The Bureau of Labor Statistics forecasts the number of cashiers will continue to fall in the future in spite of a growing retail sector.

SYSTEM EFFECTIVENESS

• Product identification: According to a press release by Kroger, the company decided to install automated checkout solutions in its grocery stores as these systems have a product identification rate of about 98 percent and can recognize stacked items even when the item bar codes are hidden.
• Prevention against shoplifting: Many grocery stores have implemented automated checkout systems with computer vision and facial recognition which are effective in preventing shoplifting. Grocery stores like Amazon Go have installed camera and sensor technology along with their automated checkout systems to prevent thefts.
•  Intuitiveness: According to a report by MIT, grocery stores decide the effectiveness of automated checkout solutions based on its intuitiveness and user-friendliness which can enhance the user experience by resulting in shorter lines, expedited checkout, more control, and more privacy.

SALES and COMPETITION

• Rate of return: Grocery stores use analytic to evaluate their POS transaction logs (T-logs) and determine if self-checkout is an appropriate addition to the store's infrastructure. Analytic includes the volume of transactions, the average amount of each purchase and the purchase methods. Using this data, the store is able to determine which automated self checkout systems to implement and which will provide the best return on investment.
• Implementation by competition: To combat competition from Big Box retailers, many grocery stores are installing automated checkouts to stay relevant and attract more customers. These technologies are helping smaller grocery stores to attract younger shoppers away from their competition.