What Kmart's checkout shake-up means for NZ shoppers

Kmart's decision to shift checkouts back to the front of its stores might change how much time shoppers spend inside – and how much they buy, a marketing expert says.

The retailer confirmed yesterday its new Westgate store, opening in Auckland on September 10, would be the first in New Zealand to feature its "Plan C+" format, which in its Australian stores has moved checkouts from the middle of the store to the front.

Massey University marketing professor Bodo Lang told 1News store layout was one of the most powerful tools retailers had to influence consumer behaviour.

"There's a really strong body of literature that shows that how you design a store, what the store layout is, determines where shoppers travel and which products they're exposed to, which in turn drives what they're likely to buy," he said.

"To put it simply, the longer you can keep a customer in store, and the more of the store that customer sees, the more likely that person is to spend more money in the store."

Kmart moved its cash registers to the middle of its stores between 2012 and 2015, a decision long debated by customers.

Lang said mid-store checkouts had helped lengthen the trip every shopper had to take.

"By placing these checkouts in the middle, you're definitely increasing the journey length and the time spent in store, which therefore maximises the probability of buying an item, and just buying more items. It's definitely more welcoming as well," he said.

Aisle browsers were targeted more than shoppers, who came in with a specific task, when retailers designed their store layouts.

"If they see attractive items in the back of the store, they're not going to think about the fact that they're being lured into the back of the store," Lang said.

"But that is effectively what's happening and, so therefore, they're spending more time in the store – and they're seeing more products along the way. Each of these products is the potential for them to open their wallet and spend some money."

He said checkout placement also shaped how upmarket a store felt.

The difference can be seen in stores such as Farmers and Kmart, which might sell many of the same product categories but present them in very different ways.

"You go into Louis Vuitton or Gucci or Prada, they don't have their checkout at the entrance door … They want to get you into the store and show you as many interesting and beautiful products right at the entrance of the store," he said.

"Having the checkouts in the middle of the store definitely sends a signal to shoppers that this is maybe a slightly more upmarket place."

But the centre checkout layout carried a security cost for retailers, with Kmart often stationing staff at exits to check receipts.

It was a security-oriented measure that Lang said likely grated on honest customers, who made up the vast majority of people walking through.

"They are generally not appreciative of any measures in store where they feel they're being treated as if they could be potential thieves," he said.

"They effectively say, 'Why are you treating me like a potential thief?'... there's a slight sort of knock to your ego as a shopper, as a genuine shopper."

Meanwhile, Lang said self-service checkouts, which Kmart has been expanding over the past several years, had clear advantages for retailers beyond cutting labour costs.

"You can fit a lot more self-checkouts into the same area compared to a staffed checkout, so it also gives you the ability to increase throughput, so that you're reducing waiting times," he said.

"Nobody really wants to wait at the checkout, no matter what the store is... if the wait times are too long, people will switch the supermarket or the store entirely, and that would be a disaster for that retailer."

Younger shoppers, particularly millennials and Gen Z, tended to prefer self-checkouts compared to older shoppers, he said.

But the technology came with a documented downside.

"There is some really interesting research about how when you have self-checkouts... once you've put them in, shrinkage increased — basically, shoplifting increased."

Whether self-checkouts suited a retailer at all was "a little bit horses for courses", Lang said, and depended on the store's image and what it sold.

"For some retail transactions, you want to feel the love, and I mean that literally, from the staff that they're talking to you, they're making pleasant conversation, they're telling you how great you look in the garment," he said.

"For other types of retailers and other types of shoppers, they don't want any of that.

"They just want to get the thing they came in for, and then pay for it and get out".

In June, Retail NZ chief executive Carolyn Young said a front-of-store layout would let Kmart "manage the flow of goods and people out of the store so that people are only leaving the store with what they've paid for".

Kmart Group managing director Aleks Spaseska said yesterday the 6700sqm Westgate store, the country's largest, reflected the company's ongoing investment in New Zealand.

"As the first New Zealand store to feature our Plan C+ format, Westgate brings together a more convenient shopping experience with the everyday low prices New Zealand families know and trust," she said.

Spaseska told analysts in June that 16 of roughly 300 Australian Kmarts had been converted, with 40 expected to be trading in the format by the end of 2026/27.

The Westgate store opens at 8am on September 10, trading 24 hours a day, becoming Kmart's third round-the-clock site in New Zealand alongside Manukau and Sylvia Park.