Dive Brief:

• Dollar General is piloting a scan-and-go shopping app, called DG GO!, in 10 Tennessee stores in the Nashville area, CEO Todd Vasos said during a first quarter earnings conference call, as transcribed by Seeking Alpha. The discount variety store chain began testing the mobile checkout program in May when the app became available on Google Play and the Apple App Store.  
• The retailer plans to roll the program out to an additional 100 stores during the second quarter, Vasos said. The chain operates nearly 15,000 stores in 44 states and plans to open 900 more in 2018.  
• Like other mobile checkout apps, Dollar General’s allows shoppers to scan items with their phones as they shop, view a running total of their baskets, and then use the self checkout to bypass the line, according to the app listing on the Google Play store. The shoppers receive alerts about potential savings on the items they have scanned.  

Dive Insight:

Scan-and-go mobile checkout is off to an uneven start, but because the potential benefits outweigh the drawbacks, more retailers are testing it. Dollar General, which has evolved beyond a strictly $1 product mix to more variety and somewhat higher discounted prices, is the latest to test mobile checkout and is thought to be the first among extreme discounters to do so. 

Walmart said in January that it would expand its Mobile Express Scan & Go program to 100 stores for a total of 125. But in May, citing customer reluctance to use the program, Walmart dropped the program but recently announced it would deploy the technology in a new Sam’s Club store in Dallas that will feature other high-tech capabilities. The chain has also given associates in its Lawn & Garden Centers in 350 stores mobile point-of-sale technology.

Walmart found that customers did not like the chore of weighing, scanning and bagging items that cashiers had always done for them. This has been a similar, longstanding gripe about self-scanning checkout lanes. Presumably this would be less of an objection in the warehouse store environment with fewer items per basket, fewer produce purchases and where bagging is not offered. BJ’s Wholesale Club is testing BJ’s Express Scan in seven locations. 

Meanwhile, other retailers continue to embrace the enthusiasm for the technology by younger shoppers, less labor and faster checkout lines. Driving the trend, in large measure, is Amazon with its Amazon Go stores. The online giant reportedly has two sites in the Chicago picked out for the Go stores, in addition to the first one in Seattle and another planned for San Francisco. Among the many other retailers testing, adding or expanding mobile checkout are Kroger, Meijer, Starbucks and Macy’s. Juniper Research has predicted that cashier-less transactions could reach $78 billion by 2022.

Customers who frequently engage with digital technology have baskets twice as large as Dollar General’s company average, Vasos told the first quarter earnings call. The retailer plans to "integrate more functionality to deliver an even more personalized shopping experience." The retailer is also considering other initiatives like digital coupons and personalized marketing campaigns that help shoppers save time and money.

"Looking ahead, we plan to add more digital tools and services to provide our customers with even more convenient, frictionless and personalized shopping experiences," Vasos said. "With the introduction of shop and scan and over 900 million digital coupons clipped in 2017 by our more than 12 million digital coupon subscriber accounts, we know we have a great foundation on which to build for the future."