Image source @ Visual China
Wen 丨 Giant Tide WAVE, author 丨 Yang Xuran
The unmanned retail market in 2017 was very hot, and it quickly fell cold in 2018.
According to industry data in the second half of 2017, more than 30 companies in the industry received more than 3 billion yuan in financing, and more Internet giants including Ali, Meituan and JD.com have entered the market.
But in 2018, the industry has changed dramatically. Head enterprises such as Orangutan Convenience and Guo Xiaomei quickly encountered different degrees of difficulties - layoffs, withdrawal of cabinets, closure of stores, layoffs and even dying.
This may be the fastest track stall in recent years. In just two years, the industry has produced such bipolar changes, which are completely unexpected by capital, entrepreneurs and even large manufacturers. So that between 2018 and 2022, the news of unmanned retail in the newspaper is rare and abnormal.
It wasn't until the beginning of 2022 that the industry, which had not heard from it for a long time, ushered in a long-lost transaction: the US-listed company Daily Excellent Fresh became a shareholder of the unmanned container company "downstairs" 100%. Prior to this, the company started its business in 2017 and was supported by investment institutions including IDG, Innovation Factory, and Yuanjing Capital.
For the buyer Daily Fresh, unmanned retail is not a new direction, but a project that has already matured. In 2017, the "Daily Fresh Convenience Purchase" was incubated within the enterprise, focusing on unmanned retail for office occasions. In the first half of 2021, this part of the business provided more than 40 million yuan of revenue for daily excellent fresh.
The recent stock price of Daily Excellent Fresh has not continued to decline with the Chinese stock market
Although the track is cool and quiet, some enterprises represented by daily excellent fresh are still "obscene development", and their performance has continued to grow. In public places such as supermarkets, subways, airports, and communities in first-tier cities, it is also easy to find various types of unmanned retail shelves, and the number has been increasing.
Will this merger be the beginning of a recovery in the unmanned retail industry? At least until now, it has not been possible to draw immediate conclusions.
01, unmanned convenience stores, strategic misjudgment
At least in the segment of unmanned convenience stores, entrepreneurs and capital were wrong at the beginning.
The market was once very optimistic about the development of unmanned retail.
According to the data provided by Emma Consulting, it is expected that the sales scale of unmanned retail will reach nearly 2 trillion yuan by 2025, and the consumer group covered by unmanned retail will also reach 250 million people.
With the coldness of the industry, the relevant industry data has hardly been updated after 2018. However, on the whole, due to the promotion of the supply side and the continuous maturity of mobile payment, machine vision and other technical means, it can be judged that the market size and number of users of unmanned retail have been increasing.
Unmanned retail itself is not a completely new concept. Before this round of unmanned retail concept fire in 2017, there were already various types of unmanned vending machines for coin throwing and paper money on the market, as well as unmanned retail equipment for beverage companies represented by Coca-Cola and Pepsi.
The rise of unmanned retail in 2017 is essentially the product of a round of technological change and industrial upgrading. Entrepreneurs and investors generally believe that with the maturity of technical means such as the Internet of Things, mobile payment, smart tags and machine vision, unmanned retail will replace the end of the social retail network with cost advantages - various mom-and-pop stores and small convenience stores, and spawn some new retail scenarios.
However, the final result proves that mom-and-pop stores and small convenience stores still exist, but many unmanned convenience stores opened in the community have been removed. At least in the segment of unmanned convenience stores, entrepreneurs and capital were wrong at the beginning.
There are complex reasons for the sinking of the track, but on the whole, it is still inseparable from some basic laws of the retail industry:
First of all, as an integral part of the retail channel, unmanned retail terminals follow the "law of scale" like other retail terminals: the more purchase quantities, the lower the cost, and the higher the gross profit of the enterprise. However, the number of unmanned retail stores is small, the scale is small, and the sales volume is lower, so the scale advantage cannot be reflected;
Secondly, although the technical means are innovative, but specific to the actual purchase operation, it is still relatively complicated, and only one link to unlock the lock dissuads many potential consumers;
In addition, the space of unmanned convenience stores is limited, the richness of goods is generally insufficient, and only a few types of goods can be bought. Compared to mom-and-pop stores, convenience stores and community supermarkets, it is at a disadvantage.
Space problems restrict the richness of goods in unmanned convenience stores
High prices, few goods, complex operation. In addition to show off, unmanned convenience stores do not give consumers more inevitable reasons for consumption. Its cold is almost inevitable.
02, unmanned shelves, traffic realization
The essence of the success of unmanned shelves in public places is still traffic realization.
In fact, the falsification of the unmanned retail store model was already before 2019, but in the following two or three years, there was no decent investment and financing or merger and acquisition activity in the entire track. This means that several of the above industry problems have not been solved.
But another branch of unmanned retail, unmanned shelves, has indeed increased over the past few years, with the number of unmanned shelves increasing in public places including hospitals, airports, districts, office buildings and offices.
Take the daily fresh convenience store, its main layout is the office unmanned shelf business. From the perspective of the demand side, employees consume a lot of working hours in the office every day, but lack of fast and convenient shopping channels; from the perspective of enterprises, they are also willing to place some unmanned shelves through outsourcing, which is equivalent to free "employee care".
It is understood that the daily excellent fresh convenience purchase can receive a large number of calls from the company's initiative, requesting the configuration of unmanned shelves for employees to use. This basically validates the success of the office unmanned shelf business model. In the first three quarters of 2021, this part of the operating income has reached a scale of 122 million yuan ("other" items in the revenue classification).
The acquisition of the unmanned shelf company "downstairs" is equivalent to the improvement of the unmanned shelf retail scene for Daily Excellent Fresh.
In addition to the office environment, airports, subways, hospitals, enclosed communities, supermarkets, and schools are the main display places for unmanned shelves.
Hospitals are one of the common implementation scenarios for unmanned retail
Looking at these unmanned shelf-intensive (and well-functioning) locations, we can find some common features:
First, they are all activity places that people cannot avoid in their daily work and life, and the natural flow of people is large;
Second, these establishments are basically lacking retail facilities, at least not large-scale retail stores;
Third, all the relatively clear property rights or property management institutions in these fields are convenient for the docking negotiation and management of unmanned shelf enterprises.
Although people are always in a state of mobility, the demand for eating, drinking, hygiene and other aspects has always been there, so these flows can be converted into the sale of goods. It is only due to property management planning and other issues that retail stores have not been set up on these occasions for a long time. The emergence and maturity of unmanned shelves is exactly in line with their management requirements.
Therefore, the success of unmanned shelves in these public places is still essentially a kind of traffic realization, which can hardly be called a breakthrough retail format change.
03, the future belongs to the business
Offline physical retail, which has been hit by e-commerce and various new retail channels, has long ceased to be a good business with stable hematopoietic capabilities.
No matter from what point of view, the speed of unmanned retail cold and the length of silence are rare in recent years for new tracks, and few tracks can have such a collapse.
Some attribute the coldness to the frenzy and push of capital, and in fact there will be similar situations in many other tracks, but none of them have been weak.
It is more likely that, at least at this stage, the business model of unmanned retail with channels as the main function is somewhat problematic.
From the current retail operation situation, there is a general situation of weak profitability in various retail channels:
The first red flag chain of A-share convenience stores, under the excellent operation and management and solid geographical advantages, the annual net profit margin fluctuates only about 5%;
The net profit margin of Yonghui Supermarket has been below 2% all year round, and it has now fallen to negative numbers;
It has RT-Mart, Auchan brand, has been acquired by Alibaba's Hong Kong listed company Gaoxin Retail, net profit margin has been fluctuating around 2% -3%.
Offline physical retail, which has been hit by e-commerce and various new retail channels, has long ceased to be a good business with stable hematopoietic capabilities. Unmanned retail attributes the reason for its lack of profit to the impact of labor costs, which is equivalent to seeing only some of the reasons, without getting a full picture.
As mentioned earlier, even if some labor costs are omitted, the newly increased technology costs and the high procurement costs caused by the lack of scale effect are also problems. Not to mention the manufacturing and operating costs of the cabinet, which need to be borne by the enterprise itself.
In the case of low profit margins, the limited amount of commodity income sold by each offline outlet is often difficult to cover the various manufacturing, technology, distribution, operation and other costs that enterprises need to pay.
So in all kinds of public places, which companies are doing large-scale unmanned container delivery?
Bubble Mart is one of the most aggressive players, with a large number of "robot shops" and "box drawers" placed in major supermarkets, and there are nearly 2,000 robot stores alone;
In addition, according to late reports, at the end of 2021, the beverage upstart Yuanqi Forest has set up a number of teams to try the smart container project, and the internal target is to lay 100,000 smart containers across the country by the end of 2022, and each team needs to bear its own profit and loss. These projects have been advancing since september last year, and thousands of smart containers have now appeared in more than a dozen cities across the country.
Yuanqi Forest's target rival, Nongfu Shanquan, bought all the equity of the vending business from Yangshengtang and put nearly 60,000 smart terminal retail devices in more than 300 cities across the country.
In addition to these giant enterprises, we also see all kinds of special unmanned vending equipment, each with its own characteristics, including selling ice cream, selling freshly squeezed orange juice, and even selling rice.
Different from the start-up enterprises of unmanned retail, these production enterprises or brands have begun to directly participate in the channel construction of unmanned retail. Unmanned retail can bypass intermediate channels, directly face consumers, and obtain greater profit margins, which is equivalent to "winning at the starting line".
Therefore, the unmanned shelves laid by brand owners and production-oriented enterprises have gradually become the mainstream of the existing unmanned shelves in the market.
04, write at the end
In 2016, Amazon announced its unmanned convenience store project, Amazon Go.
Amazon Go stores require, "Before you walk into Amazon Go, you need to download the AmazonGo App, and after registering for an account, generate a QR code through this software and scan the code to enter the store." ”
Chinese entrepreneurs have introduced the unmanned retail model into China, and have also used the infrastructure role of WeChat and Alipay to simplify this process a lot, but in fact, all the processes of scanning codes, unlocking, and self-checkout still dissuade a large number of potential consumers.
This is also one of the important reasons why the daily fresh convenience stores that are concentrated in the office building can still grow steadily in an unfavorable environment – consumers here are much more receptive to new technologies.
Retail is an industry that continues to expand new models with technological advances, but not all technological advances can form new and widely accepted retail models, and not all "old models" should be swept into the garbage of history.