At a BingoBox store in Shanghai, one of more than 200 outlets across China, there are no cash registers, checkout lanes, or store assistants. Colourful snacks line the shelves, customers enter the store with a QR code, pick up what they need, scan the barcode of their products, and leave the store.
Spurred by the popularity of these futuristic stores in China, Malaysians Allen Tsang, John Lee, and Chan Jie Yang were keen to replicate this concept back home. Last year they set up their first Ezy Box in Kota Kinabalu.
To enter Ezy Box, all customers need to do is own a WeChat account. They then scan their purchases using radio frequency identification (RFID) technology, and make payment using an e-wallet app. The store subsequently unlocks upon payment verification.
Integrating technology helps keep expenses low while remaining profitable, says co-founder Tsang.
“Unlike a traditional store, the Ezy Box system is integrated with mobile apps, so we will know the customer’s identity and who hasn’t paid. So security-wise, it is easier to capture a thief,” he continues.
Riding on the success of this business model, the trio are planning the launch of more human-less convenience stores. These new stores will be at University Malaysia Sabah (UMS)’s sprawling campus and in Cyberjaya over on the peninsula.
The economics of human-less convenience stores make perfect sense on paper. Automating inventory management, cashiering, and cash counting can improve productivity by more than 50%.
Having access to vast troves of consumer data will enable retailers to optimise for store layout, merchandise range, mix, and product displays.
For an industry known for its razor-thin margins, the biggest challenge seems to be in educating Malaysian customers.
The novelty may wear off eventually, prompting customers to return to brick-and-mortar stores, where a split-second interaction with a salesperson can point them instantly to what they are looking for.
Customers might have the added concern about payment security if their smartphones are stolen or if they are victim to cyberattacks.
Other players in the unmanned store business are nonetheless optimistic.
“Malaysia is similar to the Chinese market – it is rigorous and I think the population of Generation Z is taking off,” founder and CEO of Shanghai-based BingoBox Chen Zilin commented.
“Malaysia is also open-minded and willing to accept new things,” he added.
A year ago, Shell launched its first 24-hour unmanned Select convenience store powered by BingoBox’s technology in the city centre. Motorists can access the store at any time of the day and pay with debit or credit cards, the BingoBox mobile app, or their Boost e-wallet.
Indeed, digital payments are projected to exceed US$ 1 trillion by 2025 in the Southeast Asia region, accounting for one in every two dollars spent here.
To be viable in the long-term, unmanned convenience stores will still need to nail the fundamentals of retail: convenience, but also a superior customer experience, as well as the ability to realise and pass on cost savings to consumers.
Picture credit: Ezy Box’s facebook page