- Blockstore Group
Unlocking the Financial Benefits of Fully Autonomous Smart Grocery Stores
By Henna Hynynen, Head of Partnerships, Finance & Marketing, Blockstore Group
The retail industry is in a constant state of evolution and the grocery sector is no exception. As a company that prides itself on innovation, we have closely observed the demand for convenience and efficiency drive retailers to explore new approaches. One of the most promising developments in this area is the rise of fully autonomous smart grocery stores which offer a unique shopping experience that combines speed, efficiency, and convenience. These stores are gaining traction across Europe and as experts in the field we are excited to share our insights on the financial benefits they present.
Autonomous smart grocery stores provide significant cost-saving opportunities for retailers. While there are other benefits to consider such as improved sustainability, the financial implications of these stores are particularly noteworthy. To examine the financial impact, I find it is essential first to differentiate between two types of smart stores: checkout-free stores and fully autonomous stores with smart supply chains.
1. Checkout-Free Smart Stores:
Checkout-free stores, eliminate the need for customers to queue and pay at traditional checkouts. These stores use advanced technologies such as computer vision, sensors, and machine learning to process payments automatically. Most current "smart stores" fall into this category as checkout-free technology was the initial step in automating grocery stores. However, as the retail landscape continues to evolve retailers now seek more comprehensive solutions to maximize their return on investment.
2. Fully Autonomous Smart Stores with Smart Supply Chain:
Fully autonomous grocery stores represent the next level of retail automation. As a company dedicated to pushing the boundaries of retail technology, we have developed solutions that incorporate advanced technologies such as robots, AI, RFID, character tracking, computer vision, and more. These technologies enable smart autonomous stores, powered by Blockstore Group, to streamline inventory management, maximize supply chain efficiency, transform customer experience and more – all culminating in fully autonomous operations with the most optimal technology cost.
The financial implications of each store type differ:
a. Checkout-Free Stores:
By eliminating cashiers and checkout lines these stores can reduce labor costs and improve efficiency. Retailers can reallocate resources to other aspects of the business, potentially realizing significant savings particularly for large chains with multiple locations. However, the cost-saving opportunity remains relatively low compared to the potential offered by existing technology and solutions that can automate much more than just the checkout process.
b. Fully Autonomous Stores with Smart Supply Chain:
By automating all processes retailers achieve substantial labor cost savings across various operations, including checkout and shop floor management. The absence and change in personnel requirements significantly streamlines store operations, leading to notable financial advantages.
Moreover, the smaller store spaces help minimize waste and reduce tied capital. This efficient use of space allows retailers to optimize rental and maintenance expenses while still providing a seamless shopping experience.
Real-time data on stock levels with best-before-dates further enhances smart stores' appeal. This valuable information empowers retailers to make well-informed supply chain decisions facilitating optimal inventory management and ensuring that customer needs are met effectively. Consequently, Blockstore Group's fully autonomous stores with intelligent supply chain hold the key to unlocking substantial financial benefits and boosting overall operational efficiency in the retail sector.
In Chart 1, we present our estimate for a comprehensive breakdown of key cost-saving opportunities and their respective shares in the total cost-saving potential for a grocery retail store. These opportunities include staff savings, inventory management, shrinkage reduction, and efficient utilization of store space. As a concluding remark, I would like to emphasize that checkout-free technology is only one aspect of a broader strategy for cost reduction and operational efficiency in the grocery retail industry.
Drawing on our expertise and innovative solutions we estimate that implementing a Fully Autonomous Smart Store with a Smart Supply Chain can increase EBIT by up to 10 percentage points. This can result in a remarkable EBIT of 12%, as depicted in the chart 2 below.
In conclusion, the adoption of autonomous smart grocery stores offers considerable financial benefits to retailers. While checkout-free stores provide cost savings, fully autonomous stores with smart supply chains unlock even greater potential. As a company committed to driving innovation, we invite you to explore how our smart store technology can revolutionize your business.
Contact us today to explore how our expertise and cutting-edge solutions can propel your business forward, regardless of whether you operate a grocery store or seek to expand your food business within gas stations, charging stations, factories, or other diverse settings.