Unmanned stores: future of retail or solution searching for problems?

While unmanned stores are experiencing a stall globally, Singapore has experienced an increase in self-checkout stores over the past year. Fairprice Group’s convenience store chain Cheers, which has operated unmanned stores since 2017, announced plans to open 13 more in partnership with the Singapore Armed Forces (SAF) this year. The company stated that Cheers’ unmanned stores currently serve tens of thousands of customers in Singapore each month.

Unmanned store growth 

In January, 7-Eleven Singapore, operated by DFI Retail Group, launched its first self-checkout store in the country, allowing customers to take items without scanning them. Dubbed ‘7-Eleven Shop&Go’, the store is located at Esplanade MRT station. 

To make a purchase, customers only need to tap their Visa or Mastercard credit or debit card at the gantry, without the need to download a mobile application. A pre-authorisation charge of SG$1 will be placed on the card. This nominal fee will either offset any purchases made or be refunded within one to 14 working days if no items are bought.

According to 7-Eleven, this seamless shopping experience is made possible through the integration of advanced artificial intelligence (AI) technology, smart cameras, and IoT (Internet of Things) sensors. These technologies work together to meticulously track customers’ in-store shopping behaviours, such as detecting the items that are selected and ensuring that all items taken out of the store are accounted for accurately when shoppers leave.

Building on the success of this first store, the company expects to open more unmanned 7-Eleven stores in the city. 

In March, adding to the trend of automated retail, the renowned Japanese confectionery brand Chateraise introduced its first unmanned stores in Singapore, marking its first venture into unmanned stores outside Japan. The company is also planning to open its second self-checkout store this year. 

Why does it work? 

The expansion of unmanned stores in parts of Asia comes amidst waning enthusiasm in other markets. In the US, Amazon has closed several of its ‘just walk out’ Amazon Go and Fresh stores, though it will continue providing the technology to third parties, and Walmart has started removing self-checkout lanes in its stores. 

While self-checkout lanes are not the same as true unmanned stores, they face similar challenges in practice. 

“Unmanned stores are vulnerable to theft and vandalism,” Renaud Frise, director of digital at Enigma, told Inside Retail. “While advanced surveillance and AI-based monitoring systems can mitigate risks, they cannot eliminate them entirely.”

However, for Singapore, it might not be the case. 

Masayuki Matsuoka, director of Chateraise Singapore, told The Straits Times, that Singapore was the most appropriate place to test the concept outside Japan due to its high level of public safety, adding with the rising labour cost in the city, unmanned stores become more attractive options for businesses. 

“Unmanned stores can significantly reduce labour costs, addressing labour shortages,” Frise said. “Many unmanned stores use AI and IoT technologies for real-time inventory tracking and automatic restocking alerts. Robots can also be used for stocking shelves.”

“These stores can operate 24/7, providing convenience to customers and increasing sales opportunities.” 

Approach with care

Despite its advantages, the implementation of unmanned stores could pose a set of challenges. Frise acknowledged that the deployment of such stores might not entirely eliminate the need for human staff, especially for tasks requiring human judgement and customer service. Periodic human intervention is still necessary for tasks that robots cannot yet perform efficiently.

The expert also added technical glitches or system failures can disrupt operations and affect customer satisfaction.

“You need fast IT support and resolution to avoid business disruption and preserve customer satisfaction,” he said. “Customers might miss the personal interaction and assistance provided by human staff, particularly those who need help with product selection or have questions. It becomes even more true the more technical the products sold are.

“Unmanned stores often require customers to use smartphones or other technology, which can be a barrier for the elderly or those with disabilities. The customer experience needs to also be designed with contingency scenarios if you want everything to be done with mobile, providing charging stations to make sure customers can complete the tasks.”

The expert advised retailers to ensure their systems are user-friendly and accessible, offering assistance through remote customer service or on-site help via video call stations. 

“There is a learning curve, but clear instructions and user-friendly interfaces can mitigate initial resistance,” he added. 

Future Outlook 

Frise said the trend of unmanned stores is likely to grow, especially in urban areas and regions with high labour costs. The key is to combine automated systems with occasional human intervention. 

“Does ‘unmanned’ mean ‘unattended’ at all? The premise and dream state of ‘technology-everywhere’ was to free up humans for more value-added tasks like customer service/support. Let’s make sure technology does not mean ‘optimisation to the limit’ which is often the first thing businesses aim towards when a technology becomes ‘good enough’,” he said. 

“While convenience stores and cafes are ideal for unmanned operations, businesses requiring personalised service, such as luxury retail or specialised product stores, might find it challenging to implement fully automated systems,” he concluded.

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