While Amazon Go has been stealing headlines since it was revealed last year, we here at TechNode have been covering China’s increasing commitment to unmanned stores for about just as long. But, how exactly are China’s stores different and why are the technological and business models different from Amazon Go?
First is speed: After announcing the project, the Amazon Go store did not actually open until this year (to much excitement.) Amazon is nothing if not an increasing data- and technology-driven company. Much of this time, we can assume, was spent testing not only the technology but also the user experience: Does the store feel good to use? What are the factors that increase purchases? How can we make sure that people aren’t immediately bewildered by the absence of cashiers and rule-enforcers? I have no special insight into Amazon’s internal process; I pose these questions because these are the questions that I would ask if I were developing this new shopping experience. Amazon has the luxury of time: there’s no one else who can come close to succeeding in this space. China is different.
China speed forces everyone in the ecosystem to focus on getting to market as soon as possible. In many cases, this means taking the minimum viable product philosophy to its logical conclusion: it may not look great, but it works. The accepted wisdom in China’s tech space is that companies should look to grow users as fast as possible and then think about UX, optimization, and profit later. Many young companies are currently going through that painful transition.
China’s unmanned stores have taken a much more ad hoc approach both to their UX and underlying technology. In our experiences at unmanned stores, there were many times that things just didn’t work they way they should or users made simple errors due to lack of educating signage or other instructions.
Second is expectation: Many Chinese are so eager to try out new things that they quickly gloss over many “trivial” problems. If they can use it, and it basically works, then they will continue using it. I’m not saying they won’t complain! Just because someone complains doesn’t mean they will stop using it. It’s important to remember why internet services and O2O have become so ubiquitous: Daily life in China is filled with all sorts of friction: from finding the right bus stop to picking up your kids at school at awkward times and buying groceries. Not only have internet companies addressed much of this friction, they’ve lowered it by a phenomenal degree at an amazing pace that many are either willing to accept small flaws or since they’ve never experienced much else, they don’t even notice them. This, of course, is not making the case that UX is not important. Rather, the trade-off (relatively high UX for much less life friction) is one easily and happily made.
Recently, I’ve dealt with so many variations of the same: A consumer-facing business has a way to interact based on WeChat and QR codes. The system itself is poorly designed and doesn’t cover the myriad exigencies (or to give the developers the benefit of the doubt, the company hasn’t invested the time or money into fully integrating the system) of running an offline consumer-facing service business or the staff are just poorly trained. The staff, because of this, begin to mistrust it or find workarounds that eventually break the entire system, rendering it almost useless. At this point, many consumers expect this to happen. When it does, the customer experience is still better (if only marginally) and processes are still more efficient than before.
The combination of both factors above makes for a new normal. China’s people continue to discover their increasing ability to consume. Not only do city-dwellers have more disposable income, the products and services available with that disposable income is increasing. From VR arcades to “4D” cinemas, the number of new experiences and technologies available to the average Chinese consumer has increased rapidly. Couple both the speed of user acquisition and the ever-present demand for new experiences and products and you have a potential recipe for success in China.
Will the unmanned stores in China be as good as Amazon Go? Probably not. Will that stop them from becoming more ubiquitous? Definitely not. The amount of interest from not only investors but also large internet companies—Alibaba, Suning (backed by Alibaba) and Tencent—makes it clear that unmanned retail will grow into a much larger part of the consumer market.
And it’s not just for consumers. Logistics companies, car makers, and more are eyeing unmanned operations. Not only does it offer increased efficiencies across the board, but also lowers overhead and potentially improves overall customer satisfaction.