Scandinavian Working Papers in Business Administration

Discussion Papers,
Norwegian School of Economics, Department of Business and Management Science

No 2018/3: What Do You Buy When No One’s Watching? The Effect of Self-Service Checkouts on the Composition of Sales in Retail

Andreas Olden ()
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Andreas Olden: Dept. of Business and Management Science, Norwegian School of Economics, Postal: NHH , Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway

Abstract: Buying items that are unhealthy or are of a private nature may carry a stigma and cause embarrassment. I analyze whether the anonymity provided by self-service checkouts changes customers' shopping patterns in grocery stores. I look at a natural experiment where two stores in a grocery-chain implement self-service checkouts. Using a triple difference estimator, comparing the sales of stigma items to the sales of mundane items and to the sales of a group of control stores, I find that the sales of stigma items increase by 10-15 percent. The increase comes from the product categories candy, chips, soda, ready-made food and alcohol. I find that the increase is caused by existing customers buying more, rather than from self-service checkouts changing the customer base. However, fully converting to self-service seems to scare away some customers and decreases overall sales.

Keywords: Social friction; stigma; grocery markets; automatization; triple difference

JEL-codes: D12; D90; L81; M20

19 pages, March 16, 2018

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