At 8 p.m. one evening earlier this week, on a dark university campus with no option for grabbing a snack after studying into the night, Wei Li, a junior majoring in computer science at Hefei University, saw a glimpse of the future of retail.
Parked in a big open square on campus was a vehicle resembling a bus. Through its floor-to-ceiling glass front, shelves could be seen stacked with red boxes.
At the entrance, Wei Li scanned a QR code using his iPhone. A glass door slid open, and he stepped inside a store with no checkout and no staff.
A holographic human face with a calm expression and neatly cut bangs greeted him. There was no sound, just a move of the face from one side to another. Li said he was impressed by the range of products sold there: fruits, potato chips, coffee, magazines, and even sneakers, each with a bar code on the package. He liked the ease with which he could buy things: all he needed to do was scan the bar code using a smartphone app with his banking card information registered in it. As he approached the exit, another glass door slid open automatically to let him out.
This was Moby Store, launched by Wheelys, a Stockholm-headquartered crowdfunded startup. Originally focused on making cafés that can be moved from one spot to the next by bike, the company is now testing out a model of a 24-hour store run entirely by technology.
Its test site is located on the campus of Hefei University, about 450 kilometers west of Shanghai, where Wheelys is working with professors on the technology backbone for the stores.
Li, who is not working on that research, saw the vehicle as he walked across campus with a friend and decided to have a try. He did have questions about how the store can handle many people shopping at the same time, and how they will avoid shoplifting. “There is a huge flow of people right after classes,” says Li, 22.
Unlike the taxi and hotel industries, which are being changed in China as they are around the world by ride- and home-sharing companies such as Uber and Airbnb, brick-and-mortar retail has yet to undergo significant technology-driven change. Amazon, which announced today that it is buying upscale U.S. grocery store chain Whole Foods in a deal valued at $13.7 billion, is testing a similar clerk-free shopping concept at its Amazon Go store for Seattle employees (see “Amazon’s Grocery Store Doesn’t Have a Single Checkout”).
The Wheelys cofounders decided to test in China rather than Sweden in part because of China’s large population, but even more so because of the country’s near-ubiquitous adoption of paying with your phone. Some 60 percent of the 175 million transactions per day processed by Chinese online payment app Alipay in 2016 were done through a mobile phone, according to the Better Than Cash Alliance.
Coupled with rising rents and wages in many places, it is becoming more expensive to maintain small stores. Bo Wu, who oversees the Wheelys operations in Shanghai, says he has received many inquiries from big supermarket owners looking to gain a competitive edge by becoming staffless.
The company has moved its entire research and development department and its design department from Sweden to China, and is also locating Himalafy—an offshoot of the company that focuses on developing the automated store system—in China.
One of the cofounders, Per Cromwell, says the next step for Wheelys is improving the technology that powers its mobile bus store. Security is one big aspect. For this, Wheelys has collaborated with Hefei University to develop a system that collects the shopper’s biometrics—most notably walking gait—as he or she scans the QR code and uses sensors on the shelves to detect removal of items. Shoppers must register ahead of time for an account. Once an item has been removed, it is linked to the shopper’s ID in the smartphone app to prevent theft.
After the shopper has completed payment, the biometric information collected at the door is automatically deleted.
This biometric security system will be installed in the store this summer, and at that point anyone will be able to download the Wheelys 247 app and go shopping at the store.
Wheelys hopes to integrate even more technology in the future. It envisions the holographic human face that greeted Li becoming an AI-powered assistant, helping a shopper stay within a certain budget, for example, by choosing different products and offering customized suggestions.
They have plans too for a cloud-based system that will store information about general customer behaviors as well as preferences of individual shoppers, and analyze that to help shop owners predict what products will sell at what places. They even see a time when the bus will be able to autonomously restock by driving itself back to warehouses when supplies run low, and also increase sales by moving to different locations according to predictions of demand.
Like many technological advances, the staffless store could render a lot of people jobless. According to China’s Chain Store and Franchise Association, there are currently nearly 100,000 franchised convenience stores in the country.
Recommended for You
But Cromwell, who is from Sweden, sees it differently. In many small cities and villages in Sweden, he says, there are no stores anymore because people have moved to big cities, and local populations have grown smaller. Now the people remaining in those villages have to drive a long way to buy their supplies, he notes.
Entrepreneurs can franchise a Wheelys bus and operate at costs low enough to support profits in a shop even in a remote area, or one selling specialized items of interest such as comic books, old records, or second-hand books, he says.
AI is here.
Own what happens next at EmTech Digital 2019.