Can unattended retail evolve to surpass Amazon Go?
Unattended retail, which traditionally meant vending machines, laundromats and very small mini-stores, is benefiting from the same trends that make Amazon's cashierless stores possible. But is there room in the market for both models?
The Amazon Go store and its many imitators are typically seen as a threat to convenience stores, since the technology behind Amazon's cashierless payment process seems best suited for small shops that sell small items. Amazon's concept is made possible by consumers' comfort with mobile and contactless card payments, a trend that also helps vending machines move past their coin-op roots.
Ultimately, it may not be convenience stores that feel threatened by Amazon — but instead, Amazon that feels threatened by a rise of high-tech vending machines. China's BingoBox is one example — though often compared to Amazon Go, BingBoxes are mobile, and can be deployed and moved around just like vending machines (albeit with a much larger footprint).
"Unattended retail is going to be more visible in in the year ahead, but the evolution of the space may be more like vending machines turning into stores instead of stores becoming automated,” said Thad Peterson, a senior analyst at Aite Group. “Unattended mini-stores can be placed in a lot of different venues, like a ‘store within a store’ for specialty items, in transit stations or even on a truck that could be placed at a concert or festival. There’s real demand for this kind of retail.”
The expansion of Amazon Go and its direct competitors could wind up bringing more business to vending machine or kiosk providers by making consumers more comfortable with the idea of shopping without human interaction.
The unattended market is large, expected to reach $275 billion globally in the next year, according to Visa. And emerging consumer groups are increasingly comfortable with using in-store technology to shop and make payments.
“Because of Amazon Go you will see a dramatic move of people walking into stores in just the next year,” said Will Byrne, CEO and co-founder of Worldnet. “Amazon is a strong move into this space. It’s good news for us.”
Worldnet recently added support for Google Pay to add more options for merchants to support contactless options at checkout points. It also added EMV support to prep for unattended self-service payments.
More recently, Worldnet partner Viatouch began adding more diverse and sophisticated items to its AI-driven self-checkout system, called Vicki. These upgrades are designed to sell and checkout a greater range of item than the traditional snacks that have dominated unattended retail.
While no-cashier stores such as Amazon Go, Zippin and other lack the product diversity of a larger supermarket, they still offer much more than a vending machine. Since no-cashier stores are targeting airports, office buildings, transit and other high-pedestrian areas where long shopping experiences and payment checkout lines aren’t possible, there is a competitive intersection.
Vicki’s AI engine is being applied to serve cosmetics, hair care and small apparel items for brands such as Estee Lauder, or to support deployment of a mini-store within a larger department store. The AI saves preferences, supports repeat shopping, biometric authentication and data to drive loyalty programs.
In this way, Viatouch’s Vicki is similar to AiFi, which has developed a small but customizable retail location that can deploy in a few hours based on anticipated demand. Worldnet processes the payments for Viatouch’s stores, which don’t rely on sensor-based automatic checkout, but more so on Worldnet’s addition of NFC, IoT and faster “one second EMV” chip payments to avoid cashiers and lines.
“Recently we have received requests to sell everything from high-end sunglasses to event swag to cosmetics,” said Domenick Propati, chief strategy officer at Viatouch, who adds Vicki’s modular interior allows the shelf height and weight to accommodate products such as sports gear and electronics.