November 28, 2016

Self Checkout and Image recognition checkout will eliminate cashiers

McDonalds is rolling out self-order kiosks, mobile pay options, an updated interior design, even table service. The changes are already starting to show up at locations in Florida, New York and Southern California, where 500 restaurants have been updated. Restaurants in San Francisco, Boston, Chicago, D.C. and Seattle will get upgrades in early 2017.

McDonald's customers will be able to place their customized order on a touch screen, take a seat and have their meal brought right over. Next year, they'll even have the option of mobile ordering.

The locations that are seeing the first automated kiosks closely correlate with the highest minimum wage ($15 minimum wages). Gov. Andrew Cuomo signed into law a new $15 minimum wage for New York state in 2016, and the University of California has proposed to pay its low-wage employees $15. Florida’s minimum wage will rise Jan. 1, 2017. Seattle raised its minimum wage to $15 in 2014, followed by San Francisco and Los Angeles.

News of McDonald’s plans to expand its digital self-serve ordering stations and table service to all of its 14,000 American restaurants backs up concerns that the fight for $15 will expedite the growth of automation and robots

Instead of a fight for such a dramatic increase in the minimum wage, training programs and workforce education initiatives would be more beneficial to both employees and the employers, according to Aparna Mathur, resident scholar for economic policy at the American Enterprise Institute. She suggested that, “the only real solution is to enable these people to acquire a different skill set that does not let their job be wiped out by a machine

Many of the company’s customers, though, do not enter the restaurant. About 60 to 70 percent of sales come from its drive-through lanes.

How quickly the restaurants change remains to be seen. The vast majority of McDonald’s locations are owned by franchisees, and they will be responsible for paying for the changes. Equipment and installation of the eight order screens at the event on Thursday, at a location in the TriBeCa neighborhood of Manhattan, cost $56,000, said Terri Hickey, a spokeswoman for McDonald’s. The costs for a store with lower sales volume would probably be about $28,000.

90,000 workers are directly employed by McDonalds in the USA and 750,000 are employed by franchisees.


Ed Rensi started as a grill man for McDonald’s in Columbus, Ohio, in 1966. He was promoted to manager within a year and continued to be promoted, all the way up to president and chief operating officer in 1984. In 1991, he was named chief executive officer and retired to a life of speaking professionally about his experiences in 2007.

In May, Rensi was asked about the discussion over raising the minimum wage. He responded: “I guarantee you if a $15 minimum wage goes across the country you’re going to see a job loss like you can’t believe. It’s cheaper to buy a $35,000 robot than it is to hire an employee who’s inefficient making $15 an hour bagging French fries.”

It’s all about the math. Rensi oversaw every aspect of McDonald’s: sales, profits, operations, customer satisfaction, product development, personnel, and training. If a store can replace a $15 an hour employee with a robot that costs $35,000, it will not only improve that store’s operating margins but will actually enhance customer experience: robots don’t get sick, they don’t have attitudes or get pregnant, they don’t go on strike, they always show up for work on time, and, as software improves, will provide a friendly, interactive interface with the store.



Self-checkout (also known as self-service checkout and as semi-attended customer-activated terminal, SACAT) machines provide a mechanism for customers to process their own purchases from a retailer. They are an alternative to the traditional cashier-staffed checkout. In practice, the customer assumes the job of the cashier by scanning and applying payment for the items themselves.

As of the end of 2008, there were 92,600 self-checkout units worldwide. The number was estimated to reach 430,000 units by 2014.

Global self-checkout kiosk market size is estimated to grow at a CAGR of over 16% from 2016 to 2023 and is likely to be valued at over USD 18 billion by 2023. Increasing demand for these devices from the retail industry is anticipated to drive industry growth over the forecast period.

Camera Checkout

The solution is not better self-checkout. There is a bolder idea that Dusty Lutz (NCR- National Cash Register) is working on - a store with a bunch of cameras that knows when you take an item off the shelf and charges you for it.

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