FamilyMart plans to open 1,000 unmanned stores in Japan by 2024

Convenience store operator FamilyMart plans to open nearly 1,000 unmanned stores by the end of fiscal 2024, offering the same products as conventional retail outlets, in the first large-scale rollout of fully automated stores in Japan.

Last year, Japan loosened rules that require employees to be in stores. The country's labor shortage will widen as the population continues to shrink and more businesses are moving towards digital optimization. By the way, in terms of labor productivity, Japan ranks the lowest among the G7 countries and only 21st among the 37 members of the Organization for Economic Cooperation and Development.

Automation has become vital to retail, which has lagged behind other industries in improving productivity, but food safety laws required retail food handlers to have a health controller in place. In June 2020, in response to repeated demands from retail industry groups, the Department of Health and Labor announced that sanitary controls could be carried out by patrols.

Payment systems are another important element of automated stores. FamilyMart will use artificial intelligence cameras as well as shelf sensors to track which products a shopper is buying. When customers stand in front of the payment terminal, product names and prices are displayed on the monitor, after which all that remains is to complete the payment electronically or in cash.

The system eliminates the need to read barcodes and makes it more difficult to steal in stores. To protect the privacy of customers, data that could lead to personal identification, such as facial images, are not stored. Customers will not need to prepare a smartphone app or provide biometric authentication when entering a store.

According to FamilyMart, nearly all of the approximately 3,000 items sold in the chain's regular stores will be available in self-driving stores. A trial store was opened in Tokyo in July. It is noteworthy that it occupies an area of ​​only 50 square meters, which is about 30% less than the area of ​​an ordinary retail outlet of this kind. About 50 cameras were installed in the store with an assortment of 750 items. The age of buyers of alcoholic beverages was checked using a monitor on a payment terminal.

The company decided to start a massive expansion after it made sure the system worked seamlessly, handling about 10 shoppers in a store at a time. It costs about 20% more to open an automated store than to open a conventional store, but labor costs can be significantly reduced as employees are only needed to receive and display goods. Meanwhile, according to a study by the Fair Trade Commission of Japan, 60% of the operating costs of franchised stores are spent on labor.

FamilyMart has approximately 16,000 stores in Japan, opening 200 to 500 new stores annually. From now on, new stores will be "unmanned".

There are more than 50,000 convenience stores in Japan, but the traditional business model limits the number of locations to open stores and a new format is urgently needed. Automated stores should also address the issue of raising the minimum wage and reducing the number of workers.

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