The epidemic fight has been going on for more than two months. During this time, everyone has been separated from fresh air by a thin mask for a long time, and people have consciously kept a sufficient distance from each other. In many places, the "one-meter" European-style queuing rule, like airport security, is becoming popular. In such a special period, "contactless" has become one of the most frequently mentioned words. In business, "contactless" means that people are beginning to say goodbye to the past mindset that doing business must be crowded and lively, and instead accept a silent, distanced way of shopping. The moment in consumer behavior when the final touchpoint with the consumer occurs has changed—on February 2, a "unmanned supermarket" without service staff was quickly launched in Huoshenshan Hospital, followed by Leishenshan. Self-checkout at Huoshenshan supermarket The reason the supermarket is "unmanned" is that these two supermarkets use DuoDian Dmall's self-checkout system. This is also the first time DuoDian's self-checkout has been tried in an unmanned store. Liu Ran, intelligent hardware director of DuoDian Dmall, who participated in the construction of the Huoshenshan supermarket, told Huxiu: "This supermarket has no service staff, but supports face payment, and the customized scanning module can identify barcodes of various products." At the same time, on a larger scale, self-checkout equipment in supermarkets has played an unprecedented role. Express delivery, food delivery, and fresh food to home have all launched contactless delivery, and even set up temporary pickup cabinets. Unmanned cabinets in communities and office buildings have also welcomed a highlight moment again. Temporary pickup cabinets for fresh food to home companies This scene is reminiscent—isn't this the unmanned retail that was regarded as a representative model when new retail was first proposed three years ago? Going back to around 2017, unmanned retail, quickly pushed by capital, was called one of the "fool's gold rush" trends. According to media statistics at the time, in 2017 alone, more than 200 unmanned supermarkets landed nationwide, and 25,000 unmanned shelves were deployed; by the end of 2017, financing in the unmanned retail field exceeded 4 billion yuan. However, the boom quickly faded. The "unmanned" startups that once stood at the forefront were successively exposed to losses, layoffs, or even closures, including companies that had raised hundreds of millions in a single round, and they have long lost their voice. Huxiu found through research that after June 2018, no analysis reports on unmanned retail appeared in the entire secondary market securities investment research, but in the previous 18 months, various articles and reports were numerous. The 1.0 era of unmanned retail left a mess. This is also another track that has suffered heavy losses in recent years due to blind trend-chasing in the investment circle, with losses comparable to the sharing economy represented by shared bikes. Why were the losses so heavy? Unmanned retail has the word "retail" in it, but the retail circle has mostly looked at it coldly. Later, in the reflection on this round of unmanned retail bubble, the most widely circulated conclusion was a sentence from Zhang Sheng, deputy general manager of Lawson China, in a public speech: "Unmanned retail is still a premature baby." Now, under the background of epidemic prevention, unmanned retail has once again brushed the screen with a sense of presence. Has this "premature baby" grown up?
-01- Under the epidemic Earlier unmanned retail had three business forms: one was the oldest vending machine, most commonly selling drinks. This type of business has been developing steadily and still exists in large numbers. The second type is the unmanned shelf targeting office scenarios. Some projects are still running, but they are much lower-key. The third type is the unmanned store (here generally referring to supermarkets + convenience stores) that once surged due to the popularity of unmanned retail. This type of store relies on the store's machine vision and product RFID tags to complete the shopping process, that is, using cameras, mobile phone GPS, and network functions to identify people, people's actions, and products, and perform comprehensive positioning and data processing to achieve "grab and go": no salesperson, no checkout action needed. Customers can receive the bill just settled when they walk out of the store. A landmark event was that Auchan China launched the world's first 24-hour unmanned convenience store in Yangpu District, Shanghai, attracting a group of Japanese media to report. They said that even with Japan's developed convenience stores, there had never been an unmanned convenience store. An entrepreneur who entered the unmanned retail industry earlier, although his project is still running normally, declined to talk with Huxiu. He said that capital is no longer investing in this track now, and occasionally there are one or two cases, but valuations are very low. In fact, in later reviews, the biggest problem was—who really needs unmanned? The answer is actually the merchants, because it can save labor costs. What consumers need is still good products and services. In other words, in the unmanned market, there has never been real demand, which made "unmanned" to some extent a disadvantage because it lost some human warmth. However, with the epidemic, the demand side has changed: no service staff means eliminating the possibility of repeated contact with strangers. The "unmanned supermarket" is exactly the rigid demand of Huoshenshan Hospital. But as mentioned above, the Huoshenshan supermarket is not a true "unmanned store" in the real sense; it only uses the self-checkout system, an unmanned payment system: the checkout process is transferred from employees to customers, and customers still have to complete the scanning and payment action themselves. Compared with machine vision, which has a high technical threshold, more practical unmanned payment has penetrated daily consumption earlier. Wumart, Yonghui, Bianlifeng, Hema, JD 7Fresh, etc. have already launched face payment machines or unmanned payment channels. Just before the outbreak, DuoDian Dmall also piloted an upgraded version of smart shopping at Wumart Lianxiangqiao store—the channel-type self-checkout: entering the channel by scanning a membership code for self-checkout, and the exit gate automatically opens after checkout. The grab-and-go unmanned store forms from the previous 1.0 era still exist in recent years, but the expansion speed has slowed down a lot. Some players who once boasted grand goals of landing thousands of stores a year have become more practical and demand-oriented. Yunna Technology, which provides intelligent visual technology support for Japan's 7-11, domestic Meiyijia, and Suning Xiaodian, has landed more than 80 intelligent unmanned convenience stores at home and abroad since 2018. In response to the epidemic, they decided to launch some unmanned small stores. Li Yuewei, vice president of Yunna Technology, told Huxiu that as more and more companies resume work, many CBD and office park catering facilities have not yet opened, and even if they open, there are various restrictions. The most basic needs of returning workers, such as breakfast and lunch, are difficult to solve. In response to this situation, what Yunna will do in the near future is to quickly build standard modular "contactless convenience stores" in some CBDs, factories, hospitals, and parks within a week according to anti-epidemic requirements. The contactless convenience store born at this time must judge a series of actions from the customer's entry, including whether they are wearing a mask and whether their temperature is normal. If they meet the standards, customers are allowed to enter, but the number of people must be controlled in real time and automatically, and entry and exit channels are separated to avoid human contact. After shopping, customers only need to walk out of the store directly, and the intelligent system and algorithms behind the scenes will automatically identify the purchased products and settle the payment. The whole process avoids human-to-human contact. Due to restrictions in logistics, site selection, and policies brought by the epidemic, Li Yuewei's anti-epidemic store plan is still in the process of implementation. "During the epidemic, we are focusing on quickly deploying convenience stores. But with our team of more than 100 people, we still need to consider the actual arrangement of manpower and logistics for project implementation. On the other hand, the areas that need to be entered (severely affected areas) are actually inaccessible due to flow control." In any case, the window period on the demand side has appeared, and when talking about "unmanned retail" again, the context is very different.
-02- Not unmanned, but retail If unmanned retail was once a concept pushed by capital, pursuing advanced technology and helping capital activity, now the industry has a clearer understanding—it is no longer at the top of the trend, but has turned into a tool to help retailers upgrade to unmanned. The industry has changed its tone. Currently, in a supermarket, the highest degree of unmanned is probably the checkout and cashier system. Liu Ran of DuoDian Dmall said that the current self-checkout system in the retail industry is a combination of island-type self-checkout, channel-type self-checkout, and manual cashier stations. Whether it is the smart shopping at Huoshenshan supermarket or DuoDian's existing intelligent projects, they are actually "self-service" shopping, not true "unmanned stores." Li Yuewei also emphasized that what they do is not "unmanned" but "frictionless" (frictionless shopping or cashierless checkout), "We are not particularly advocating the fully unmanned convenience store format now, but promoting the frictionless payment solution." This is because if an unmanned convenience store is completely unmanned, there are still certain limitations in service. For example, cigarettes and some special products with high hygiene requirements are not allowed to be sold by self-service in China, so an operations staff member needs to be retained. For example, a large convenience store with rich categories can be divided into manned and unmanned areas. The unmanned area does not need special supervision. "People" only need to manage products that require manual sales. Staff can leave work when customer traffic is low at night and on weekends, the manned area is closed, and the unmanned area operates automatically. When the layout of unmanned stores reaches a certain density, one person can manage at least three stores in the same area, further improving human efficiency. However, there has always been a cognitive misunderstanding about unmanned retail: does unmanned necessarily bring cost reduction? This actually depends on overall efficiency. Cabinets and shelves that do not need people to guard are another microcosm of unmanned retail. Two years ago, a group of unmanned shelves fell in mid-2018, but the company that joined the track when the trend was just starting, Zailouxia, still maintains operations and achieved considerable growth during the Spring Festival. In the view of Zhang Ying, founder and CEO of Zailouxia, the key to unmanned retail is not whether there are people, but cost and efficiency. "Previously, everyone only thought about going 'unmanned,' which costs a lot of money. How can you make the accounts balance? In the end, it depends on whether costs can be minimized, such as fulfillment, labor, and capital costs, and then whether efficiency can be maximized. Efficiency is the consumer experience. These two points need to be balanced." The reason Zailouxia adopted the self-service convenience cabinet format is that Zhang Ying believes it is "the cheapest and most cost-effective fulfillment method." His reasons are: "First, the key to the success of the unmanned convenience format is not whether there are people, but whether the products are attractive to users; Second, whether users can accept the fulfillment method. If the fulfillment cost is low, you won't add a high gross margin to the products. With the community cabinet format, the driver can park the car on the roadside and replenish the goods, but in the office scenario, employees need to go to the parking lot first and then go up and down the stairs. Now the epidemic has brought a third reason: safety, including contactless and traceability." Currently, 80% of Zailouxia's business is concentrated in community self-service cabinets, and only 20% of the points are still in office buildings, schools, and some business districts. The core of unmanned retail is no longer unmanned, but has shifted to doing retail in a low-cost, high-efficiency way. This is also why Zhang Ying never thinks he is doing "unmanned retail": "We are doing retail, but we just caught up with the contactless shopping trend. Don't simply understand the cabinet as a machine; behind the hardware must be software and data algorithms. We must use the logic of e-commerce and retail, and then achieve the effect of a thousand stores with a thousand faces through algorithms and data." It can only be said that when the mysterious and high-tech coat is removed, the essence of unmanned retail is still retail, and the core of retail is still product power and efficiency. Li Yuewei also has a similar view: the role of "unmanned" technology for convenience stores is actually to increase revenue and reduce costs. Unmanned convenience stores are not about doing unmanned aerial vehicles without temperature, but about doing "fewer people" things, reducing labor costs. Increasing revenue is to maximize work efficiency. "Currently, stores have high requirements for checkout efficiency. Many traditional convenience store cashiers can settle 50-100 orders per hour, which is already a big challenge, and young people are unwilling to do such simple, mechanical, repetitive work for a long time, resulting in high turnover. Now, using machine vision technology, 600-800 orders can be automatically settled per hour." Freeing people from repetitive settlement work and letting people play their value in services that machines cannot replace is also part of improving efficiency. In the current retail field, with the outbreak of the epidemic and contactless, the real needs of consumers hidden behind various models have been stimulated: they need product safety guarantees and fast delivery. So after the epidemic, can "unmanned" truly usher in an outbreak?
-03- How far is the outbreak? During the epidemic, compared with the same period last year, Zailouxia's performance under the single-store concept increased by 50%, the average unit price rose from 12 yuan in January to the current 14 yuan, the retention rate of new users in the second week rose to the current 28%, and the turnover of some fresh milk reservations and semi-finished dish projects cooperated with catering companies is expected to grow by 30%-50%; DuoDian Dmall's channel-type self-checkout settlement ratio has also risen from 20%-30% before the epidemic to about 60%; similarly, the demand for contacting Yunna to inquire about unmanned solutions has also greatly increased... However, the epidemic has brought opportunities for related industries to acquire and cultivate users, but when unmanned retail returns to the store itself, there are still some subjective or objective problems, including the acceptance of unmanned retail in the entire social business environment. After all, unmanned retail no longer enjoys the preferential treatment of previous years, and it will encounter all the problems that all retail enterprises encounter. At present, Zailouxia is facing resistance at the entrance of some communities under closed management. For communities that do not allow entry for replenishment, Zhang Ying said they are working on them one by one. "Conditions such as employee registration, not leaving Beijing for 14 days, driver and vehicle number can be met, and cabinets and warehouses can be disinfected daily. Entering the community for replenishment also reduces the difficulty of community management. If we don't deliver the goods, everyone will gather at the door." Zhang Ying said helplessly. From a technical point of view, in visual recognition, safety, privacy, and convenience are difficult to balance. After all, without disruptive technological innovation, visual recognition may speed up recognition to ensure sales efficiency, thereby giving up the security of more feature point recognition. In the unmanned retail scenario, convenience and security are still conflicting sides. In addition, even with machine vision, the theft and loss rate of unmanned stores is a problem that needs to be continuously promoted and solved in the future. In an ideal state, with extremely accurate recognition, the store will have no concept of theft and loss. "We allow them to put it in their bag and take it out, or even throw it out. This is because vision can already judge what the customer is doing, and these will become purchase behaviors," Li Yuewei said. "At present, the theft and loss rate of unmanned convenience stores has reached the thousandth level, and machine vision has an automatic learning process for the surrounding environment and light. After the actual store operation, some can even reach the ten-thousandth level." Zero theft and loss is on the premise of ensuring perfect technology and mastering the information of every user entering the store (especially payment information). In fact, for any store, complete loss prevention is still difficult to achieve, and it will only be infinitely close to zero. DuoDian Dmall has now invested in more than 100 stores for AI loss prevention, using computer vision to identify missed scans and wrong scans, control theft and loss within the cashier line, and support traceability functions, with system prompts for individual "special" consumers. But Liu Ran also admitted that despite this, theft and loss is still the biggest pain point of unmanned retail, and it cannot be completely solved at present. "It can only rely on the improvement of national quality and increasingly developed technology. It is impossible to completely eliminate theft and loss, but it will definitely become smaller and smaller." Liu Ran also put a question mark on the future of complete unmanned. He believes that future retail must be a combination of manned and unmanned, and this "person" will not only play the role of a cashier or shopping guide, but a person who can provide higher value services. As the discourse power of unmanned retail tilts more toward retail, this also poses a huge challenge to the management of traditional retail itself. The decline in labor utilization is the first problem faced after the degree of unmanned increases. In the past, store staff might have to do cashiering, replenishment, and other tasks at the same time, but as unmanned efficiency improves, human efficiency will decline. In addition, with the blessing of machine vision, stores will generate more and more detailed new data, including how many times a product was picked up and put down, which brands a customer pays more attention to, what they picked up, and in front of which shelves they stayed longer. "These data digitally restore offline shopping, giving offline physical stores the same digital capabilities as online e-commerce platforms. How to integrate and use this full online and offline process provides them (retailers) with new challenges," Li Yuewei said. Li Yuewei believes that unmanned retail will no longer have the simple and barbaric "outbreak" form of the past. The maturity of this field still needs to be divided into several steps. First, convenience stores can first use unmanned technology to solve problems such as insufficient manpower and low checkout efficiency during morning, noon, and evening peaks. Then, as the proportion of frictionless payment in (convenience stores) increases and the number of users accustomed to using unmanned payment rises, further plans can be made. "This also involves the essence of business, return on investment, and other more realistic things, but through such opportunities, more people know that unmanned technology exists. It is no longer a concept, but has landed. In the face of the epidemic, it can also help achieve a certain degree of prevention and control, at least allowing people to shop without contact." Obviously, after this epidemic, in addition to contactless, people will pay more attention to food health and safety, so in the long run, the community retail format with full digitalization and full closed-loop traceability is one of people's real shopping needs. Zhang Ying believes his opportunity lies in this: "The cycle affected by the epidemic is about 6 months, plus the subsequent 6-month recovery observation period, giving community retail a sufficient time window to serve users. Especially for unmanned retail, for convenience cabinets, users' contactless shopping consumption habits are formed, rigid demand increases, and user stickiness strengthens." Will this time take the opportunity to create the Alibaba and JD.com of the unmanned retail industry? Zhang Ying thinks it is unlikely, because in the end, you still have to practice internal skills and respect the basic laws of retail. Especially for startups, they can only continue to innovate. "SARS was not actually the reason for the rise of Taobao and JD.com; they were already prepared for the rise. Players' cost structures will not change because of the epidemic, nor will they become smooth sailing after the epidemic. They still need to continue optimizing to live better. Retail startups must have a long enough runway." On the other hand, it is worth noting that unlike the 1.0 era of unmanned retail, many retail leaders are now quietly laying out this track. For example, Yonghui Life's fresh food smart cabinets have quietly appeared in communities in Binjiang District, Hangzhou. And Shanghai's FamilyMart convenience store had already actively laid out smart cabinets in 2019 (refer to Huxiu article "Let Some People Fall in Love with Convenience Stores First"). More intriguingly, abroad, Amazon recently plans to launch a larger Amazon Go near its Seattle headquarters in Capitol Hill; on February 18, 2020 local time, Japanese convenience store chain Lawson opened its first unmanned store in Kawasaki City, Japan. The entry of old retail players may bring a new pattern to the industry. Thus, in the current unmanned retail field, with sufficiently leading technical support and understanding of the rules of the retail world, players can not worry about the ups and downs of the trend, and can easily catch any outbreak or the opportunity to go on steadily. Source: Ten Billion Consumers (ID: gjgc168)