Unmanned retail stores look great, but the so-called low cost is not true?

Unmanned convenience stores in Shanghai, Hangzhou and other places have attracted widespread attention. At the same time, unmanned retail in Beijing is also quietly rising. Yesterday, it was learned that a new unmanned retail store EATBOX will open in Beijing on July 16. It is understood that there are already unmanned convenience stores such as 24 Aiguo and Xiaomai in Beijing.

However, maturity is still a problem for unmanned convenience stores that are favored by various investors. Recently, Bingguo Box in Shanghai suspended business due to high temperatures, showing that this new product still has shortcomings. Industry insiders said that although investors are optimistic about unmanned retail, unmanned retail is still in a market selection process. A report divides domestic unmanned retail technology into artificial intelligence routes represented by machine vision; Internet of Things routes based on RFID; and mobile Internet routes based on QR codes. At present, it seems that the high-end machine vision technology has stability problems, RFID technology has the problem of easy damage, and QR codes have cumbersome transactions and poor experience. At the same time, the former two still have a biggest problem: cost.

Limitations of three unmanned retail technologies

Regarding the current form of unmanned convenience stores on the market, some media have divided them into three levels: cutting-edge technologies such as machine vision, RFID tag technology, and QR code and barcode recognition. However, in reality, stores use multiple levels of technology cross-over.

At present, the industry generally believes that the "grab and go" experience based on "visual face recognition" technology is the ideal unmanned retail, represented by Tao Coffee, Amazon Go, and Take Go. However, the stability of a series of cutting-edge technologies such as computer vision and deep learning algorithms cannot be guaranteed, and the cost is too high, making commercial use difficult.

Amazon Go, which was originally scheduled to open to the public at the end of March, has been postponed, and Tao Coffee has no commercial timetable. According to previous media reports, Amazon Go's sensing technology is not ideal at present, and it can only operate perfectly when there are less than 20 people in the store or when consumers move slowly. Once there are more than 20 consumers in the store, it is difficult for the technology to monitor when the goods are moved from the shelf to the specific location.

Semi-open stores based on RFID and closed stores similar to vending machines have relatively low technical barriers and are easier to implement. However, in addition to the common concern of lost goods, some stores have not even solved basic problems such as heat protection technology.

BingoBox, which was once proud of its practice of replacing stores with outdoor boxes to reduce rent, is now becoming one of its pain points. Its boxes in Shanghai recently suffered from "heatstroke", and the donuts and chocolates in the store melted due to the high temperature in the store. The store has now suspended business. An industry insider analyzed to the reporter, "This is a basic problem, which should be considered in the early design. Such a situation may also be caused by line factors, and it may still be debugging."

In addition, the RFID tags used by some stores face the problem of high costs. An industry insider said in an interview that if 100,000 RFID tags are purchased at one time, each tag costs about 0.65 yuan, which is a considerable expense for convenience stores with an average customer unit price of 10 yuan. In addition, similar to QR codes, there is a risk of the tag being torn if it is attached to the outside. The ideal situation is to attach it inside the product, which requires a complete transformation of the supply chain, which is difficult in reality.

Industry insiders believe that the most user-friendly QR code transaction, although it has advantages in goods identification and theft prevention, is more mature in technology and has relatively low costs, the shopping process is cumbersome and the experience is not much different from traditional retail.

The numbers are beautiful, but is low cost a false proposition?

Low deployment cost, low trial and error cost and low operating cost are one of the biggest attractions of unmanned convenience stores.

BingoBox, which has landed in Shanghai, once told the media that its cost is more than 80% less than that of ordinary convenience stores. According to it, a 15-square-meter box can sell the same number of products as a 40-square-meter traditional convenience store, but the cost of the former (100,000) is about a quarter of the latter.

The person in charge of Beijing Internet of Things Technology Company said that the fully enclosed 24-hour Aigou unmanned convenience store machine developed by it can hold up to 400 to 500 SKUs (stock keeping units), and seven to eight thousand items of inventory, which is equivalent to the inventory of a traditional convenience store of thirty to forty square meters, and also greatly reduces costs.

The figures of unmanned retail look good, but the reality is that it is often not simply calculated by saving some labor costs or rent. The cost brought by security is the market's primary concern for semi-open/fully open unmanned convenience stores. At present, the unmanned convenience stores in operation mainly use RFID tag technology and QR code recognition.

An experiencer of an unmanned convenience store told the reporter that he could avoid payment by simply tearing off the RFID tag on the product when leaving the store; in a smart convenience store in Beijing that was in trial operation, he could even leave the store without covering or tearing off the tag. Current video surveillance, network alarm and other technologies cannot detect and stop these behaviors in time.

Industry analysts believe that in domestic convenience stores, the proportion of labor costs is not high, and the cost savings may not be able to compensate for the loss of goods in the store, not to mention the expensive machine and technology costs. Take 7-Eleven as an example, labor costs only account for 1.8% of its revenue, and even if the store rent is included, it is less than 5% of its revenue.

According to previous news from the Ministry of Commerce's official website, in 2015, Beijing Quanshi Convenience Store and Hangzhou China Resources Vango Convenience Store each selected a store to trial operate unmanned convenience stores. On that day, a total of 16,700 yuan of goods were sold, and self-service payments received from customers were approximately 13,700 yuan, a difference of 3,000 yuan.

EATBOX, which will open in Beijing on July 16, uses multiple technologies in its anti-theft system, including a second facial code scan when leaving the store, a weight sensor (sensing the weight change before and after shopping), etc. However, An Liying, the project leader of EATBOX, said in an interview that the anti-theft effect of unmanned convenience stores is not immediate, and the key to anti-theft is to improve the social credit system.

The core competitiveness of convenience stores is not “unmanned”

The Xiaomai Smart Convenience Store located in the Qiaoyou+ Community in Suzhou, Beijing is one of the stores in trial operation of Xiaomai Commune. According to the reporter's experience, the store has now implemented some unattended technologies such as facial recognition and QR code payment. After the customer takes a photo, uploads it and registers on the WeChat client for the first time, they can scan their face to enter the store next time they visit.

In addition to selling snacks, drinks and daily necessities, the store also sells hot food such as steamed buns and freshly ground soy milk. Customers can also scan the QR code at the door to enter the discussion group established by the merchant and express their needs for new categories to the merchant. Some consumers encounter difficulties in scanning the code to pay, and the on-site staff will help them.

Many practitioners interviewed said that the existing technology still needs to mature, but unmanned convenience stores are ultimately part of the retail industry. No matter how eye-catching the "black technology" is, for consumers, high-quality and abundant products are the core.

The most important value of the unmanned retail format does not lie in the fact that there is “no one”, but in the reliance on technology to track and record behavioral data within the store, making the store’s product structure more “empathetic”.

An Liying, the project leader of EATBOX, mentioned that the original intention of choosing the unmanned convenience store format was mainly to strengthen the collection and analysis of offline data by supermarkets, improve efficiency, and provide personalized customized services to consumers. The person in charge of Beijing Wuwang Technology Co., Ltd. predicted that emerging professions such as SKU designers may appear in the future.

Wheat market insiders stressed that due to technical costs, security and customer experience, they do not want to run a completely unmanned convenience store in the future. Each store will still have a service staff on duty, but the number of staff has been reduced compared to traditional formats.

At present, unmanned convenience stores are generally still in the experimental stage, with a lot of room for imagination, but we must be careful to prevent "false fire". After all, convenience stores are retail businesses, and the design and management of the supply chain are still the key to success or failure. At this stage, when technology is still imperfect, "manual service + self-service" may be one of the more pragmatic approaches.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.