Will unstaffed convenience stores bring about the revival of offline retail stores?

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The new business of opening up unstaffed convenience stores was suddenly a hot topic recently. Startup companies flocked to the idea; industrial big names and business giants are also gearing up, eager to take a shot at the business. In December of 2016, following Amazon’s opening of its first self-driving grocery store in Seattle—Amazon Go, countless Chinese companies emerged in the name of starting a “new retail” concept:

In February of 2017, Sesame Credit (an affiliated company of Alibaba) and China-based DeepBlue Technology jointly launched QuiXmart—an unstaffed convenience store and the Take Go credit settlement system.

In March of 2017, Magic House’s smart convenience store began a new project of “shared space” in the Loteam Creativity Space of the Guangzhou-based Loteam Creative Park.

In March of 2017, F5 Future Store completed a 12-million-yuan series A round financing and announced the completion of a 30-million yuan A+ round of financing.

On June 15th, 2017, the Swedish start-up company Wheelys officially opened up Moby Mart in Shanghai.

June 25, 2017, Hangzhou-based Wahaha Group and DeepBlue Technology signed a contract that announced the opening up of 100 thousand Take Go stores in 3 years, and 1 million in 10 years.

On July 1st, 2017, the Foshan startup F5 Future Store announced the completion of a 30-million-yuan A+ round of financing.

On July 3rd, 2017, another startup company—BingoBox completed a series A round financing of over 100 million yuan.

On July 8, 2017, Alibaba’s staff-less Tao Café made its official debut in Hangzhou.

At the same time, Easy Home’s unstaffed convenience store—EatBox is scheduled to open in July.

It wasn’t too long ago that the emergence and rise of e-commerce generated lots of rejection towards “offline retail stores”. But now, acting as the representative of offline retail stores, unstaffed convenience stores are making a glorious comeback.

In fact, despite how science and technology have advanced, and how the times have changed, consumers will always have irreplaceable physical store consumption needs. First, the need for social interaction; Second, the need for atmosphere-building; Third, the need for physical contact. This precise need for face-to-face contact and trust, is something that cannot be replaced by the Internet.

According statistics, China has over 5 million convenience stores, with an aggregate sales value above 10 trillion yuan, and a vast market space for additional growth. Meanwhile, the traditional convenience store is facing problems of blazing high rent costs, rising labor costs and many other issues that needs to change.

In addition, upgrading the conventional retail stores has been the core value of the retail industry, however, the industry has always explored growth possibilities online and not offline. And now, this exploration has reached a critical state. Large data, cloud computing, artificial intelligence and other rapid developments of science and technology has brought a new realm of possibilities to unstaffed convenience stores.

Compared to the conventional convenience store, be it labor costs or rental costs, everything is significantly reduced when it comes to unstaffed convenience stores. These stores can effectively reduce operating costs and have be highly efficient at the same time.

However, from the technology used to their ideologies, the companies running these convenience stores are world apart from one another in every aspect. EatBox CEO, An Liying, says that the competition of unstaffed convenience stores will ultimately be reflected in factors such as commodity differences, the scale of stores, etc. According to him, what’s important is seize the element that customers seem to cluster towards in the targeted area of store opening. 24IGO CEO, Wang Zhenfang’s point of view is slightly different compared to An. According to him, the division of the space will play a key role in the competition. And the investor of BingoBox, Lin Jinfeng, believes that the key to the competition is the speed of replicating to scale and the introduction of non-standard products.

At present, unstaffed convenience stores have really only achieved the ability of letting customers pay without supervision. In the absence of staff and attendants, if a comprehensive shopping guide isn’t implemented well, customers may have a rather negative experience in the search of a desired product.

Whether these convenience stores can become a retail trend is still an ongoing debate worth exploring and observing. But it is undeniable that, in the context of consumption upgrades, offline retail stores are definitely re-emerging. The retail industry is moving from an era of trade into an era of relationships. Businesses should carefully design their offline shops and strive to create a more than satisfactory consumption environment for consumers. Such will be the best opportunity for offline stores to develop in the future.

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