Where Automated Stores Are Already a Reality

Staffless retailers are popping up in China’s larger cities

Author: Man-Chung Cheung

November 9, 2017

Amazon got a lot of press attention last year with its announcement of the Amazon Go cashierless store. But it has yet to open the next-generation retail store to the wider public.

Meanwhile, China has become a testbed for new retail technology, as an array of fully automated retail operations equipped with all kinds of tech have already emerged in big cities. Led by such startups as BingoBox, EasyGo, Eat Box and F5 Future Store, “unmanned stores” are attracting the convenience-seeking and curious.

These operations are equipped with cutting-edge technologies like artificial intelligence (AI), computer vision, biometric recognition and sensing technologies capable of tracking shoppers’ movements.

Typically, shoppers enter a store by scanning a QR code using their smartphone. Completing purchases can be as simple as picking up merchandise and heading for the door.

In the case of Suning, one of China’s largest retailers, its staffless store in Shanghai uses facial recognition technology to allow shoppers inside. Consumers can use the Suning mobile app to scan items and get product information. Transactions are also completed on the app, which is linked to shoppers’ bank accounts. At the exit gate, consumers can see the items bought displayed on a screen.

Overall, only a small sliver of internet users (16.5%) in a handful of China’s Tier 1 cities reported using an unmanned or smart retail store, according to a September 2017 poll from iResearch Consulting Group.

Among those who had shopped at such a location, the top reason for making a purchase was the convenience of 24-hour service, iResearch Consulting Group reported. But the novelty factor of an unmanned store was the second most cited reason.

In addition, iResearch Consulting Group found that shoppers were largely males, and that respondents ages 31 to 40 made up the largest share of shoppers, at 42.0%.

Most of the smaller, venture-backed startups—such as BingoBox and F5 Future Store—have been in operation for less than a year. Given the newness of this aspect of China’s retail sector, the rate of satisfaction among shoppers who have visited these stores is fairly high, at 70.9%, according to iResearch Consulting Group.

Ecommerce giants Alibaba and JD.com have also entered the smart store fray, although in a different manner. Both have opted to provide technology solutions and data insights to traditional retailers in lieu of focusing heavily on brick-and-mortar locations that demand a lot of inventory be kept on hand.

But unmanned stores must also overcome some level of skepticism from potential patrons. iResearch Consulting Group found that those still on the fence about such retail locations are concerned about issues such as immature technology and the lack of product variety.