You may recall how, a few years ago, there was significant interest regarding unmanned stores. Retailers were going to use technology to eliminate cashiers and create a more frictionless, seamless shopping experience. You would just walk into a store, select your items, and walk out—the in-store technology would know what you’d chosen and charge your account.
Unmanned stores were expected to be the “next big thing” in retail technology. In 2018, for example, ABI Research noted that a number of eCommerce giants, including Alibaba, Suning and JD.com in China, along with Amazon in the United States, were investing in unmanned stores. At the time, ABI predicted that the total number of stores would grow from 393 in 2019 to 44,138 in 2023 globally.
Reality was a little different from the predictions. There was, indeed, a flurry of store openings early on but the trend has slowed somewhat. A number of newly opened stores subsequently closed, as operators struggled to find the sweet spot between necessary process and complete automation, and growth in certain regions has been more sluggish than expected.
We don’t think so, since we’re actively working with customers, like Neste in Finland, who are ramping up unmanned stores. We’re also seeing that the COVID-19 pandemic has people rethinking how they shop and that’s likely to increase demand for unmanned retail. A store that promises fewer person-to-person transactions and more social distancing is something to consider these days, and unmanned stores can deliver on that promise.
We think one of the reasons why unmanned stores have grown more slowly than expected comes down to perception, since retailer expectations about the potential cost savings may have been misplaced. An unmanned store may not have cashiers, but someone still has to put special labels on the items that will be read by the automated system, and it still takes people to restock shelves and keep the place clean and inviting. Early adopters may have thought of unmanned retail as an investment in reducing overhead, with fewer employees, and while this is true to a certain extent, what they’re really investing in is the customer experience.
By making it easier for customers to get what they want, when they want it and without having to wait in line, unmanned stores increase convenience. And that, in turn, helps boost retail traffic and foster loyalty. Convenience is the main value proposition of unmanned stores and that’s why we’re seeing more of these kinds of retail outlets in the convenience-store sector.
So it seems that the 2018 predictions were maybe ahead of their time. A more recent analysis, conducted by ResearchandMarkets.com, looks at current trends and takes into account the COVID-19 impact. Their focus is on unmanned convenience stores and they see a bright future. They report that the global unmanned convenience store market was valued USD 67.48 million in 2019 and they expect it to reach USD 1,640.32 million worldwide by 2027. That’s a CAGR growth rate of 51.9% during the forecast period.
Looking at the Neste store in Finland, mentioned above, there’s reason to believe the updated predictions. Neste’s new store format, called the Easy Deli, is a small, self-contained store, designed for easy deployment and built with sustainable materials, that is close to neighborhoods, open around the clock and built for quick service.
You access the store by unlocking the door with the mobile app that you’ve downloaded to your smartphone and populated with your payment details (Controlling entry helps to ensure secure shopping and prevent misuse and vandalism). You select the items you want and proceed to the self-checkout machine.
Items in the Easy Deli store are labeled with RAIN RFID tags that are read by the self-checkout machine. You can present everything you’re buying at once – there’s no need to individually scan items – and you finalize payment using your mobile wallet on your smartphone or your contactless payment card. That’s it. You’ve gotten what you need and you can get back to what you were doing.
RAIN RFID technology is at the heart of the Easy Deli concept. Neste chose RAIN RFID (also known as passive long-range UHF RFID) because it’s an established technology used throughout the world to increase efficiency in the supply chain, automate inventory control and enable smart vending machines. RAIN RFID can co-exist with other technologies used in unmanned stores, including artificial intelligence (AI), machine learning or facial recognition.
RAIN RFID is especially useful at the self-checkout station since it enables fast and accurate reading of items, even in bulk. The RAIN RFID labels put on the products are inexpensive and don’t need a battery since they use power provided by the reader in the self-checkout station. The read rates are higher compared to barcodes and can be read even without line of sight, so there are fewer errors and misreads. RAIN RFID chips can also store more information than barcodes, so retailers can gain valuable insights about their customers shopping behavior which can be analyzed and used to respond to trends.
An international team created the Neste Easy Deli experience. The overall project was guided by Nordic ID, a Finnish company specializing in RAIN RFID solutions for asset-flow management and real-time inventory visibility. The RAIN RFID labels used in the Neste setup are produced by Avery-Denison, a Fortune 500 adhesive manufacturing company based in California, using technology supplied by NXP. Our UCODE 8 and UCODE 7 families of RAIN RFID ICs reflect our commitment to automated, convenient and efficient retail and supply chain applications. To learn more about the Easy Store concept and how we’re making RAIN RFID unmanned convenience stores a reality, download our Neste customer story.
NXP’s vision for unmanned stores involves a combination of technologies, in addition to RAIN RFID, to make the shopping experience even more convenient. One example is hands-free access and payments based on the wireless ultra-wideband (UWB) technology.
With UWB onboard your phone, you can enter (and exit) the store without tapping your phone to a reader, and you can make secure payments even if you phone is still in your pocket or at the bottom or your bag. This hands-free approach to secure payments is a compelling option for unmanned stores because shoppers can save time by making payments without having to present their smartphone or payment card to the terminal.
UWB also brings GPS-style location services indoors, so it’s easier to navigate large buildings, such as shopping malls and parking structures, and find what you’re looking. UWB mapping makes it easy to find your car, a store or a friend, and in unmanned stores could even guide you to the item you want, with precision that’s accurate to within a few centimeters.
As the Neste Easy Deli example in Finland makes clear, unmanned stores are here and more relevant than ever before. We see a bright future for this segment of retail, and are working closely with our customers to leverage RAIN RFID, UWB and other technologies to create the kinds of seamless, touch-free shopping experiences that today’s consumers desire.
Through close cooperation with company partners, he looks beyond the IC to facilitate full solution development and implementation. James has over 15 years of experience working with RFID technology on behalf of companies serving the entire value chain - including hardware manufacturers, systems integrators and end users. He has led RFID implementations for brand owners and end users across a variety of industries and markets.
