In China, unmanned stores are booming. Alibaba’s Taocafe uses camera technology, recording and recognizing shoppers’ movements individually. Bingo Box, developed by a local start-up, has deployed one such “box” near a Auchan store. All products are labeled with RFID so you don’t have to scan but just pay with your phone. Unmanned stores, is it the future? Very likely only if one company can integrate retail management and technology.

Amazon launched its cashier-less store 2 years ago, waging another storm of technologies in the traditional retail world. Just recently, Chinese companies have further developed the “unmanned store” concept, including Alibaba and several start-ups. Although it has only been experimenting in the market for a short period of time, is it the future?

First, let me show you Alibaba’s Taocafe which was launched last July. Simply-put: You first need to open their Taobao app and scan the QR code at the entrance. Then the system will recognize you and monitor your movement in the store. During the process, you do not have to do anything extra but fetch your drinks and products. When checking out, you first move through a “door”, by which the system determines you are leaving and then another door and this time the system deducts the amount from your Alipay account, and announces “you have spent XX Yuan”.

The store can receive 50 shoppers at the same time and sells only drinks and a limited range of merchandise. The trick lies in the camera recording and recognizing shoppers’ movements individually.

But, I would like to challenge, the Café format is much simpler as it contains a small range of merchandise. However, it is a good start and I am certain the technology will keep improving and enable the store to accommodate more shoppers and stock more products. Then it comes to the ultimate importance, category management, which I doubt Alibaba has any experience in.

The second example is Bingo Box, developed by a local start-up, they have deployed one such “box” near an Auchan store. You need to register via Wechat or Alipay first, it then recognizes your face and lets you in. In the box, there is no staff, you can pick up the products and self-checkout. All products are labeled with RFID so you do not have to scan but you just pay with your phone.

Bingo Box is usually 20 square meters and allows only one shopper at a time and stocks a few hundred SKUs, mostly Consumer Packaged Goods. I have more concerns about this concept. First only one shopper at a time; this certainly limits total shoppers and cash flow in a day. Second, although the system can track the shopper’s credits, it can do little about shoppers misplacing products. And it still needs frequent replenishment which can be a challenge considering the poor supply chain management in China.

Therefore, I tried to calculate but could not find a way to break even for Bingo Box. Maybe advertisement could be an important source of income as Bingo Boxes are supposed to be placed in high traffic streets. Nonetheless, Bingo Box has received several rounds of investment and plans to place 5,000 such boxes next year!

I would think a vendor machine could do the same job. Anyway, miracles could happen if you put enough money into it. And maybe technologies could surprise us all. Again, I would challenge Bingo Box’s knowledge of retail management. This would not be a problem at all in the short term as the company is expanding and shoppers are coming in out of curiosity. But retail is not the simple game it seems, is it?

So back to the question, Unmanned stores, is it the future? Very likely only if one company can integrate retail management and technology. So far in China, those innovative companies, including Alibaba are tech geeks with limited or no knowledge about true retailing.

PS. Taocafe was down for a while because there was a problem with the internet connection 😊 But with the new face recognition technology, all we need to carry is ourselves!

Next time, I will show you how Alipay and Wechat have killed cash!

Tags: Suzette Moerman, #SuzetteMoerman, free agent