At least 18 outlets by retailers in Singapore like Chateraise and more have been launched to test unmanned store systems. - ST FILE
SINGAPORE: Unmanned stores are popping up in Singapore just as retail shop operators worldwide are calling it quits on the technology amid teething issues.
At least 18 outlets by the likes of Cheers, 7-Eleven and, most recently, confectionery company Chateraise, have been launched to test “just walk out” systems that allow customers to simply pick up items and leave without having to queue for a cashier.
The 280sq ft space at Le Quest Mall in Bukit Batok is the first unmanned Chateraise outlet outside of Japan.
Like most unmanned shops here, the 24-hour outlet requires customers to install an app on their mobile device in order to enter. A barrage of cameras and sensors in the shop tracks the movement of items taken by customers, who are free to grab items and go.
Typically, only a handful of customers are allowed in the store at any one time, so as not to overwhelm the tracking system.
7-Eleven, which in January opened its first unmanned convenience store near Esplanade MRT, adopts a similar approach. But customers have to pay a S$5 entry fee via a credit card before they can enter. The sum is returned to them within two weeks if they do not purchase anything from the store.
The store serves as a testing ground for cashierless solutions as 7-Eleven seeks new ways to tap the technology, said its spokesman, who declined to provide details on the number of customers who have made purchases at the outlet.
Cheers’ 12 unstaffed outlets here draw “tens of thousands” of customers monthly, said its spokesman, adding that the company planned to launch more of such shops in the coming months.
Pick & Go’s technology provider, Intellify, is in talks with other retailers to provide artificial intelligence (AI) concierge services and unmanned retail solutions that it has used in Pick & Go’s four AI stores here.
Unstaffed outlets here are largely located on student campuses and in high-tech retail hubs like Esplanade Xchange.
Chateraise’s outlet, which brings in roughly 100 customers each month, aims to place the brand’s stores closer to residential areas, said its spokesman, who added that there are plans to set up more AI outlets.
Retailers have long chased such systems as an answer to labour shortages, especially in developed countries, experts said. In recent months, however, some major players are rethinking their approach.
In April 2024, Amazon ditched its similar Just Walk Out systems, which had been deployed at its outlets in the United States since 2018, and turned to self-checkout systems.
The tech likewise used sensors to track what shoppers took, but the company was also said to have relied on an army of over 1,000 workers in India, who were manually reviewing transactions and labelling images from videos to train the system’s AI model.
The company has since refuted these claims, stating that a team of associates helps to train the AI system by labelling and annotating real shopping data, and not by watching live videos of shoppers to generate receipts.
In China, a rush to open unmanned stores in the 2010s has petered out. There were an estimated 200 automated convenience stores around the country in 2017, but many started to shutter in the years that followed.
Operators were unconvinced by the promises of the tech, which reports by Nikkei Asia said fell short due to a lack of data analysis to ensure items are sold optimally, and a lack of fresh groceries in the shops’ selection. Fresh items, the publication wrote, are key to bringing in more footfall and higher profit margins.
Unstaffed outlets in South Korea have had to grapple with thefts. Meanwhile, these shops accept only credit card verification, so customers who do not own a card are left out.
Unmanned shops in Singapore also have limited product variety, as checks by The Straits Times have found. Most stores sell only packaged food items like snacks and bottled drinks with typically short shelf lives, and never fresh food products or clothes, for instance.
They also require customers to behave in a predictable manner. Customers are urged through notices pasted around the shop not to pass items around to others and to return items to their original spots, in order not to confuse the tracking system.
Desmond Sim, chief executive at real estate consulting firm Edmund Tie, said there has been rising interest from retailers and supermarket chains to deploy unmanned systems to curb costs in the long run, but many are still exploring the tech.
He said: “The concept probably cannot be applied to sell goods like clothes or luxury items where customer service is needed. At the moment, it is more suitable for consumables that have a lower chance of being returned.”
In spite of the teething issues surrounding unmanned shops, he expects to see more outlets in Singapore as the technology gets refined and consumers become used to it.
Dr Kapil Tuli, professor of marketing at Singapore Management University, said the technology has not caught up with the promises of AI-operated shops, including cost savings from not having to hire people to man the shops round the clock.
Although unmanned stores require no queueing, most customers still need the security of having a person to speak to about products. Human staff are also important to maintain order in shops, he added.
Even so, Singapore offers companies a promising test bed for such systems as shoppers here are tech-savvy and generally well behaved, he said.
“There will always be a quest to get unmanned stores right because of the immense cost benefits,” he added. - The Straits Times/ANN
