Back in the day the U.S. was filled with cutting edge venture capitalists who would drive innovation in retail foodservice and the world watch, copied and U.S. branded innovative foodservice grew. Today foodservice innovation and venture capital is center stage in China and Asia according to Tacoma, WA based Foodservice Solutions® Grocerant Guru®, Steven Johnson.
Consumers in China are just as time starved as anywhere else in the world and retailers looking to reduce consumer time in the stores think going ‘cashier-free is the way to go. The question is this the next big thing or are retailers and venture capitalist throwing money at China’s cashier-free convenience stores?
First does the technology in a cashier free store work? Will the retailer actually make money, or learn once again that retail, even tech-driven retail, is a brutal business of low margins, low barriers to entry and high fixed costs? Our Grocerant Guru® asks how much would your margins improve without cashiers?
This year alone in China there are eight start-ups in the space have raised a total US$385 million. The investment premise seems simple: tap into an ongoing retail revolution in a nation with 1.3 billion potential shoppers with a track record of embracing new retail experiences.
The fact is China’s cashier-free stores are very different from Amazon Go, the fully automated checkout-free stores launched by Amazon, something all of the Chinese start-ups tried to copy but found it too difficult. Amazon Go has delayed it’s rollout due to ongoing technology and operational glitches according to Amazon.
Most of China’s cashier-free stores fall into two types. The first looks like traditional convenience stores with row of products displayed like in a 7-Eleven, or with product images displayed on a computer screen. Shoppers scan a QR code or their faces to enter the store. They then scan the products they want and check out via mobile payment. In other cases, they are clicking pictures of products and pay via mobile payment.
The products are then dispensed like from a vending machine. Bingobox, Bianlifeng and Xiaomai belong to this category, with most placing box-like stores “in the wild”, such as in parks or on the sidewalk.
The other type are essentially a vending machine, or shelves, placed in office buildings and powered by mobile payment and QR codes. The only difference between this type and a traditional vending machine is the addition of mobile payment enabled by easy scan of QR codes. Guoxiaomei and Citybox are examples of this type.
Here is the point international retailers are expanding into new points of fresh food distribution, that may very well save them lots of money while driving top line sales and bottom line profits? So we ask does your company look more like yesterday than tomorrow? Will you brand be replaced by a new start-up from Europe, Asia, or the U.S.?
Success does leave clues www.FoodserviceSolutions.us is the global leader in grocerant niche business development. We can help you identify, quantify and qualify additional food retail segment opportunities. Has your company had a Grocerant ScoreCard completed a Grocerant Program Assessment, or new Grocerant niche product Ideation? Want one? Call 253-759-7869 Email: Steve@FoodserviceSolutions.us