Unattended Retail Stumbles In China, But Global Growth Continues

https://www.pymnts.com/news/retail/2019/unattended-retail-stumbles-china-global-growth/
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Unattended retail is having a moment – a bad moment, as it turns out, in China, according to reports. The challenges there come as kiosks and other forms of unattended retail continue to develop globally.

In China, according to Nikkei Asian Review, “across China, shops once considered the future of retail have been shutting their doors for good.” As one example, the report continued, “in May, on Huaqiang North Road in the heart of Shenzhen’s electronics shop district, a Buy-Fresh Go store that had been held up by the media as a model of automated retail closed after only about a year. The store had been stripped of all its high-tech equipment, and an ad seeking a new tenant was placed at the entrance.”

Unattended Failure

More broadly, the report stated, “by the end of 2017, an estimated 200 or so unmanned convenience stores had sprouted up around the country. According to itjuzi.com, a research firm specialized in IT-related venture investments, the business attracted 4.3 billion yuan ($620 million) in 2017 alone.”

The reasons behind these failures? For one, selling fresh groceries via unattended retail is not an easy business. “Many of the companies that attempted to run unmanned convenience stores appear to have lacked such knowledge” about how to succeed, the report stated. “If a store only carries long-lasting products like drinks and snacks, it looks more like a big vending machine in the eyes of consumers. Although the new concept of unmanned convenience stores attracted shoppers early on, the novelty has worn off.”

As well, the operators of unattended retail reportedly do a poor job with the data gain from those operations.

Global Growth

Still, despite the issues in China, unattended retail continues to grow in other parts of the world.

For instance, Amazon recently has opened physical kiosks in the U.K. that will offer a rotating range of items at discounted prices. The first kiosks will be based in London at various rail stations, including Charing Cross, King’s Cross, Paddington, Liverpool Street and London Bridge. The locations will begin by selling Boodles Mulberry Gin for £14.99 ($19.02 USD) a bottle, at a 40 percent discount.

Indeed, vending machines that have implemented cashless technologies saw significant sales growth, according to a study cited by the PYMNTS Unattended Retail Tracker, with the most impact observed with units that took in less than $2,000 a year. On those machines, gross sales rose 110 percent in the 18 months after the addition of cashless options.

From Reis & Irvy’s to Vengo, merchants and technology companies are reinventing vending technology through smart devices. These are just some of the ways firms are changing the way consumers buy goods, ranging from frozen yogurt to modern-day vending machines.

Meanwhile, Reis & Irvy’s will roll out 100 kiosks in Australia this year. The news came as part of a report that the company had tapped Nayax Australia to supply remote machine monitoring and cashless payment systems for its frozen yogurt kiosks.

Troy Bingham, managing director of Froyo Robotics, the Australian licensor for Reis & Irvy’s, said per reports, “We only work with blue-chip suppliers and, as Nayax Australia leads the market in payment solutions, we felt it’s a natural partnership.” Nayax Australia’s Managing Director Dylan Winik said, “We are excited by their futuristic approach to frozen treats vending, and believe their choosing Nayax shows their understanding of the Australian landscape, where cashless payment is the norm for most customers.”

The first big change Vengo made to the vending machine was its size – its version is a little over two feet tall, a little less than three feet wide and exactly six inches deep, in comparison to a six-foot tall machine. The wall-mounted machine also has a 21-inch screen for consumer interaction, and comes ready to accept near-field communication (NFC) contactless and card payments.

As Vengo Labs CEO and Co-founder Brian Shimmerlik told PYMNTS in a January interview, “We love shrinking down and bringing the design and technology a whole new flavor. That smaller size opens up whole new markets, and gains access to spaces that have never had a retail experience [as] a part of it.”

All success rests of the back of multiple failures, and it seems likely that operators of unattended retail will take what lessons they can from China and go from there.

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https://www.pymnts.com/news/retail/2019/unattended-retail-stumbles-china-global-growth/