Will AI Stores Without Employees Ever Become Mainstream?

Retail is evolving. With technology and changing customer behaviors guiding the way, more businesses are shifting toward automated systems and AI stores. In fact, according to Retail Innovation Hub's 2022 research, there was an 11% increase in brands using self-checkout technology globally compared to a year prior.

Amazon Fresh has already paved the way with its cashier-less stores but has also been looking for ways to overcome the many challenges it faces. In the U.K., top supermarket chain Tesco introduced a checkout-free store called GetGo. But it doesn’t stop there.

The trend is gaining even more momentum in Asia, with Tokyo-based FamilyMart planning 1,000 unmanned stores by 2024 and Singapore's Pick&Go chain launching three AI-powered unmanned grocery stores so far.

Looking toward Hong Kong, HKTV's subsidiary brand, Shoalter Automation, is readying for the debut of its first entirely automated retail store in Manchester, U.K., in 2023. This big plan includes an offline shop equipped with automated storage and retailing systems capable of taking orders and restocking merchandise without any human help.

Automated stores are hugely beneficial for businesses. They offer around-the-clock operations and predict stock needs, analyze shopping trends, and optimize inventory management. Another bonus is the simplified data collection process. Once a brand sets up its systems and hardware, data collection is a breeze, and the businesses can then expand easily into new markets.

The charm of automated stores extends to the consumer side, too. The demand for convenient and efficient shopping experiences has spiked. A study by Axis Communications reveals that nearly half of Hong Kong consumers are more likely to visit unmanned stores, particularly in the post-pandemic era. The convenience, enhanced customer experience, and ability to shop at any time make these stores significantly appealing.

7-Eleven Japan Breaks Ground With Unmanned Mini-Stores

7-Eleven Japan is revolutionizing the country's retail landscape by launching small, staffless outlets in the spring. This progressive move is a response to help alleviate the severe labor shortage that the retail industry in Japan is currently grappling with.

While there won't be traditional staff, each store will have a single employee responsible for tasks like product stocking and ordering. These smaller, 50-square-meter outlets will offer a limited selection of products, such as rice balls, bread, chilled boxed lunches, and everyday necessities, as well as freshly brewed coffee. The total number of items will be capped at 1,200 — significantly less than the typical offering.

Customers accessing these stores will use a dedicated app to scan a QR code upon entry. Once they've chosen their items, customers scan the barcodes using their smartphone and then pay via credit card or other payment methods. Mobile payments will be the primary transaction method, making the shopping experience quick and efficient.

The giant convenience store chain also intends to establish these unmanned outlets in previously hard-to-reach locations, such as tower condominiums and factories. Central Tokyo's tower condos, as well as factory and research institute cafeterias that are closing due to labor shortages and inflation, are being eyed as potential spots. The company is targeting locations that have at least 500 employees and projected daily sales of about 100,000 yen ($682). This is significantly lower than the average sales of a regular outlet, which is around 700,000 yen. Many will also be open 24/7/365.

7-Eleven's initial step will be to open these innovative stores in Tokyo and other regions. The company already has a few prototype outlets in Tokyo and Osaka prefecture and is in talks with about 20 firms that are keen on having these stores in their facilities. The eventual goal is to have several dozen of these unmanned stores throughout Japan. Although it might not be feasible for 7-Eleven stores in the U.S. to match the level of Japan's stores, it would be interesting if the company decided to experiment with this concept in America someday.

Some competitors in Japan are also coming out with similar stores. For example, FamilyMart has already expanded to over 30 nationwide outlets using an unmanned payment system. Meanwhile, Ministop has started extensive developments of tiny unmanned stores. Even Daiei recently opened an unmanned supermarket in Yokohama. 7-Eleven's venture into the unmanned store market marks a significant step in reimagining the Japanese retail sector.

While many see the benefits of automated stores, some customers still value the personal touch of a human cashier, and certain products or services may need the expertise of a trained employee. Also, unmanned stores might present more security risks without staff to monitor customer behaviors. Especially since the industry has recently experienced a surge of chaotic retail theft.

As technology becomes more affordable, the shift toward unmanned automated stores is likely to continue, but the traditional retail model still holds its ground for the moment. The next chapter of the retail industry promises to be an exciting blend of efficiency, convenience, and personalized service, a harmonious fusion of the new and the old.