Pay at the Register? No, thanks
How Biometrics, Sensors, and AI Will Change Shopping
December 29, 2017, Bruno Jacobsen
Earlier this year, 7-Eleven opened its first fully-automated store. It is located in Seoul, South Korea, in the world's 5th largest building. For now, it's only open to employees of Lotte, owner of Korea Seven. But soon, fully-automated stores could open everywhere.
This 7-Eleven allows customers to pay by showing their palm to a scanner. Using biometric identification, it recognizes the person, and charges them straight away.
While this means that the store does not need any employees, some might still be around. The automated check-out frees up employees to help people around the store instead. Instead of having three or four people per store, one is now enough. This not only saves costs but also improves customer satisfaction.
7-Eleven Japan, FamilyMart, and Amazon
But Korea is not the only country at the forefront of this. Japanese chains, partly due to an ageing and decreasing population, are following closely. FamilyMart and 7-Eleven are looking to have self-checkout machines at all their locations by 2025. This is significant, if you consider they are two of the most popular conbini in the country.
Then there's Amazon Go, in Seattle. Even more advanced than the above, it's a fully-automated store that doesn't even ask you to check out. Its description reads: No lines, no checkout - Just grab and go! The store uses the same kind of technology that goes into self-driving cars - computer vision, sensor fusion, and deep learning. It tracks the items on and off the shelves, and creates virtual shopping carts. When you leave the store, it simply charges your Amazon account.
Unfortunately, like Lotte's 7-Eleven, it's only open to Amazon employees for now. But if you don't work for one of these companies, don't worry. It's unlikely we'll have to wait long until these types of stores start popping up everywhere.
If we extrapolate 7-Eleven and FamilyMart's commitment in Japan, it could be less than a decade. The question is, is this a good thing?
Automation vs. employment and competition
There is no doubt that most retailers would like to cut employees' cost. This is especially true for lower-end retailers or grocery shops with low margins. If they compete on cost, automated stores will be necessary. It's not surprising that Amazon, known for its low prices, is pioneering them.
Higher-end retailers, however, might still keep the employees. But instead of taking customers' payments, they will be helping them in the stores. While a decrease in the total number of employees might occur, it won't be as big. If you walk into a higher-end retailer, you always have people asking what you need. These less impulsive purchases require more consideration, and sometimes more selling. So in-store service is of high importance, lest you leave the store empty-handed. Not to mention it's good branding.
And what does this mean for competition and unemployment? Will retailers unable to adapt fast enough be able to compete with an Amazon or 7-Eleven? Will this fuel concerns over unemployment brought by automation?
Many have written on the effects of automation on the labour market already. It can lead to unemployment rates rising in the short term, but evening out in the long run. But there is no denying that such drastic change within a decade could have a dramatic impact. This is also true for the current competitor landscape in retail.
But what about you? Do you see this as a positive thing? A negative thing? Or somewhere in the middle? Let us know in the comments below.