enience stores or very small supermarkets, ranging predominantly food-based daily necessities, snacks and drinks. The primary differences between vending machines and unmanned stores are their size, product range and enclosure. Some unmanned stores resemble the enclosed ATM areas at the front of banks, albeit with brighter and more interesting fitouts. Early pioneers Japan historically has had an honesty system for veggie stands in rural areas, where you are trusted to take an item and leave money for the owner, who is not around. Called mujin hanbaisho, they are now spreading to urban areas. In Sweden, the first unmanned convenience store, Naraffar, opened in early 2016. Interestingly, it was developed by an independent operator, not a chain. The store stocks basics such as milk, bread, nappies and canned food. Who’s doing it now? Asia. Particularly China, South Korea, Japan, and recently Singapore. Whilst Amazon Go is the flagship for the US, there’s not much happening in Europe, and even major European retailers, such as Auchan, are focussing on China. Whilst some operators were around as early as 2014, most activity has occurred in the past 12 months. In Singapore, July 2017 saw the launch of NTUC Fairprice’s first unmanned Cheers store. To enter, customers download the Shop it Yourself app and sign up with their national identity number. This generates a barcode which they can scan to enter. Using shopper data, Cheers have displays of the most popular items and basket combinations. In Japan, in response to a labour shortage and ageing population, convenience store behemoths Lawson and Family Mart in December 2017 started exploring leaving stores in Tokyo unmanned overnight in order to remain open 24/7. (The stores would still be staffed during the day.) Japan is a world leader in both convenience-store and vending-machine retailing, although consumers are not as mobile-first as they are in China or Korea.   In South Korea, 7-Eleven Signature soft launched what it controversially called ‘the world’s first unmanned convenience store’ at Lotte World Tower in Seoul in May 2017. Shoppers can pay with their hand using a biometric verification system. The self-checkout terminal studies the size, colour and shape of a shopper’s veins, allowing them to make payments after they have registered their Lotte Card user information.   But the big daddy in this new retail format space is China. Unmanned stores are becoming a focus in China because of the country’s high level of smartphone penetration, ubiquitous mobile payment services, population and housing density, growing number of urban commuters who value convenience and efficiency and mobile-first shopping behaviours. Operators in the Chinese market are numerous and mainly fall into two categories: traditional retail giants such as Auchan, which have established inventory and delivery chains and a large customer base, and startups such as BingoBox, which rely on their cutting-edge technology and seed funding from investors. The big boys JD.com opened an unmanned store in Yantai, Shandong province, on December 30, 2017, the first of hundreds of planned stores according to JD.com and real estate developer China Overseas Land & Investment Ltd. JD’s store concept involves ceiling cameras that use facial recognition technology to identify customers, as well as image recognition and heat mapping to track movements and item selections. RFID technology is also utilised. Alibaba opened the cashier-less Tao cafe and store in July 2017 in Hangzhou. Customers enter by scanning their Taobao e-commerce app through ticket gates like those at subway stations and pay with a metre-long scanner via Alipay. Offering drinks, fast food and snacks, the 200sqm store holds up to 50 customers. The cafe displays customers’ profile pictures rather than their names when their coffee order is ready and uses automated visual sensors and facial recognition to reduce error rates. Tencent trialled an unmanned store in the MixC shopping mall in southwestern Minhang in Shanghai in January and February 2017, selling chocolates, bottled water and juices, cookies, and coffee mugs, as well as WeChat merchandise. Customers enter using a QR code supplied by Tencent’s WeChat and scan a QR code again at the exit point to total purchases and pay.    Take Go is the latest initiative from traditional FMCG enterprise, Wahaha, in partnership with artificial intelligence solutions provider DeepBlue Technology. Rolled out February 2017, the stores look akin to a giant phone booth. Wahaha plans to open a hundred thousand new stores in China in the next three years and a million within 10 years. Yes, you read those numbers right. Auchan in partnership with Hisense launched Auchan Minute Customers enter using a WeChat QR code and pay using WeChat Pay or Alipay. Auchan will open several hundred Minute stores, each around 18sqm carrying circa 500 products, in the short term and expects this number to rise quickly over the next few years.   New players BingoBox last week signed a deal to open 300 unmanned units in Beijing. Customers must register in advance using WeChat or Alipay, then scan a QR code to enter the 10sqm store, where goods are about 20 to 30 per cent cheaper than in other convenience stores. F5 Future Store is a 24-hour smart, unmanned convenience store, where customers can order and pay for products at a special terminal or wirelessly with their smartphones. Everything is done automatically by machines. Xiaomai manufactures seven models of smart convenience stores across themes including bakery, snacks and community activities. Units are placed in different public locations like metro exits and business districts.  Considerations and applications   Security: RFID tags on merchandise reduce the risk of shoplifting, but the associated costs need to be balanced with the reduction in staff costs. Likewise, the increase in extra and/or smart CCTV cameras. Apps: Shoppers won’t want to clog up their phones downloading multiple store apps. On the plus side, if unmanned stores are primarily on commuter routes, most shoppers will encounter only 2-3 stores. Staffing: Unmanned stores still require stock fillers. Limited categories: Once retailers overcome the hurdle of enforcing age limits on tobacco and alcohol sales, these categories are ripe for unmanned stores. Sandwich bars and cafés could also work. This store format works best in high-traffic CBD and commuter areas, such as train stations and while it may not be the dominant format yet, it will become a supplement format in particular categories and geographies. It also offers a pop-up retail option for commuters that isn’t currently available on Australian public transport networks. Norrelle Goldring has 20 years’ experience in retail, category, channel and customer strategy, marketing and research, working in and with global retailers, manufacturers and research houses.