China Consumer

Job disruption in store

Are unmanned retail outlets the shops of the future?

BingoBox-w

The staffless store

Last week Amazon announced a $13.7 billion plan to purchase grocery store chain Whole Foods, sparking speculation that the e-commerce giant was adding a new testing ground for its “Just Walk Out” technology, which it debuted in its staffless Amazon Go store in 2016. Over in China, the concept of unmanned stores is also fast becoming a reality with almost two dozen in existence, including last week Shanghai’s own “first fully automated convenience store”.

The store is branded BingoBox, and has been developed by Sun Art Retail – the Chinese JV of French retailer Auchan and Taiwanese hypermarket RT Mart. The brand started in Guangdong’s Zhongshan in 2013. According to CBN Weekly the chain now operates 22 BingoBox stores across five cities, making it the “largest mobile, O2O, electronic, fresh produce shop” in southern China.

A niche category, to be sure, and what does it mean? Each BingoBox covers only about 10 square metres of floor space and has retractable wheels, which allows it to be moved from space to space, hence they are “mobile”.

The “O2O” and “electronic” aspects of the store are best considered one and the same.

To enter the store, users have to scan a QR code, which connects them to the company’s official WeChat account and confirms their identity. They then pick their groceries and scan them at the checkout, where they pay with WePay or Alipay. To exit, they scan a QR code again, which confirms they’ve settled their bill.

According to BingoBox’s promotional video, scanners can detect if an item hasn’t been checked out, and also if someone sneaks into the store, alerting staff monitoring the shop remotely. The box also provides 24-hour customer service through a video link – a necessary measure for safety reasons (the door of the Shanghai branch has already experienced technical problems, trapping patrons inside).

Besides this remote service assistant, BingoBox is completely devoid of staff. This enables the retailer to undercut its competitors like Family Mart and 7-Eleven. Incidentally, the latter is currently trialling its own unmanned shopping model in South Korea, called 7-Eleven Signature, where customers pay by scanning their hands.

Retailers are being pushed to investigate new business models as consumer attitudes change (see WiC348). Walmart, for example, has emphasised its members-only brand Sam’s Club and has moved ever closer to e-commerce site JD.com. Last year it sold Yihaodian, an online unit it bought in 2012, to JD.com in exchange for a 5% stake (see WiC331). Then last month it announced it would open a virtual Walmart store on JD’s platform.

Carrefour’s China division suffered a net loss of $65 million in 2016, prompting it to invest in more convenience store models, which it has unveiled in Shanghai.

The Global Times reports that France’s Auchan has slowed its China expansion since 2014, shutting two stores last year. It appears to have an eye on the future with its BingoBox venture. But even in this space it has competition.

Swedish group Wheelys has launched its own unmanned convenience store in conjunction with Hefei University, called Moby Mart. It is trialling that store in Shanghai this month. The Moby Mart is a self-driving, solar-powered and staffless shop, with the option for drone-based delivery and even a holographic shop assistant. Of course drone usage is heavily regulated in China, which will present a problem, and driverless cars aren’t expected to be viable before 2021, Reuters reports (never mind driverless convenience stores). So this futuristic concept may not be practical for a while.

As for the BingoBox, it can be moved by staff using an app that instructs the store’s wheels to drop, so it can be towed to a new location, such as a car park or residential complex. Checking out the promotional video, it appears to WiC that the shelves are mostly stocked with fruit, packaged takeaway foods and toiletries.

In fact, the video puts a particular emphasis on condoms, an item which many purchasers (worldwide) are embarrassed to buy from a traditional checkout assistant.


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