Autonomous Retail Systems – Autonomous systems for the retail sector (Smart & Walk-In Stores)

➡️Autonomous Retail Systems (ARS) – Allowing the possible to achieve the impossible creates a new reality – Expansion of distribution channels

The philosophical concept of autonomy was significantly shaped by the German philosopher Immanuel Kant: Autonomy depends on overcoming existing forms of dependence and external control, even if these appear to offer a certain degree of security. Autonomy thus refers to the state of self-determination, independence, self-governance, or freedom of decision and action.

Today, many people immediately associate autonomy or automation in retail and logistics with job destruction, robotics, zero service, no people at the checkouts, coldness and bleakness.

Topics like urbanization frighten some people. They live in it, yet it's taboo to talk about it. Even when there are opportunities for improvement, they prefer to cling to the illusion of security. They want everything to stay the same, out of insecurity or convenience. The only certainty is that nothing is certain. Not even that.

For "lazy" editors, it's a sure thing if they don't want to alienate their readership. This partly explains the skeptical views of the general public. Take the two camps, for example, regarding Tesla: its fans and its haters. Those in favor of environmental protection, but insist that gasoline-powered heating must remain. Coal must not die out, and so on. Hardly anyone sees the opportunities in the new technology because it isn't covered to the same extent as the "lazy" editors devotedly serve up their topics again and again. Or, even more simply: because they have no clue about it and therefore can't report on it. But that's only part of the truth. We live in a time of great change, and that brings with it a lot of ignorance and, indeed, a lot of uncertainty. What happens next? What else will happen? How much will it affect me personally?

Above all: What impact does all this have on existing, trusted, and reliable processes that have been in place for decades? And because of this, we are flooded with all sorts of confusing and diverse information. But that doesn't make things any better.

So let's start from the beginning, with autonomy, with the ARS.

Shopping is currently tied to a specific time and place. The same applies to how it's done. How one can shop is determined by prevailing strategies and systems, whether in the city or the countryside.

How can we shop better? More efficiently for suppliers and customers? The following conditions apply:

Home Shopping

• Collect goods
• Continue shopping on site
• Delivery service

Mobile shopping

• Collect goods
• Continue shopping on site

Hub Shopping

• Online shopping in the meeting area (e.g., in a cafe, Hubspot)
• Real shopping experience

Payment systems

• Cashless
• Contactless payment
• Paying at the non-autonomous checkout (presence of cashiers)

Special features

• 24/7 Service – Shop and receive your goods around the clock
• 24/7 Meeting Area – Café, snacks etc. available around the clock

Automated warehouse

We've all been there. No condensed milk for coffee? Accidentally forgot to buy drinks in time? It's Sunday? Many a trip to the gas station has saved the day. But even that's not always enough. Not all products are available at gas stations, and their opening hours are limited.

But wouldn't an autonomous retail system also be profitable where there's already a gas station? The catchment area and infrastructure are there.

It absolutely must be an automated warehouse. This allows for the optimal and intelligent storage of the maximum possible number of items in the smallest possible space. Monitoring product expiration dates and ensuring the correct storage of dry or temperature-sensitive products are essential features.

Allowing the possible to achieve the impossible creates a new reality

For many, the imagination stops short of being able to manage all these factors: "Not feasible," "too complicated," or "it won't work" are the prevailing opinions.

E-Mart

E-Mart is the largest retail company in South Korea. Samsung, Hyundai, KIA, and LG are well-known South Korean brands. South Korea has a population of 51 million and is about 3.5 times smaller than Germany. With 515 inhabitants per km², it is one of the most densely populated countries in the world.

E-Mart is the oldest and largest discount retailer in South Korea, with total sales exceeding US$15.8 billion in 2018. As of December 2016, it had 160 stores nationwide. The company was founded on November 12, 1993, by the Shinsegae Group as the first discount retailer in South Korea. With new store openings and the acquisition of Walmart Korea in 2006, E-Mart has solidified its leading position in the retail and discount sectors. E-Mart offers a wide variety of goods, from groceries and clothing to personal care items. E-Mart also operates an online store. In addition to South Korea, the company has stores in China, Vietnam, and Mongolia.

Shinsegae

Shinsegae is a South Korean conglomerate headquartered in Seoul that operates, among other things, upscale department stores under the name Shinsegae in Korea and budget-oriented department stores under the name E-Mart in South Korea and China. The name Shinsegae means "New World.".

In 2014, the company owned approximately 15 upscale Shinsegae department stores in Korea, as well as 140 E-Mart discount stores in Korea and six in China. Shinsegae is the second-largest department store chain in the country after Lotte. Sales revenue amounted to €4.7 billion in 2006 and €10.5 billion in 2010, with a net profit exceeding €725 million. Direct competitors in Korea include Lotte Shopping and the Hyundai Department Store Group. Shinsegae employed 16,383 people in December 2004, while E-Mart had 12,893 employees in 2010.

On May 22, 2006, the company announced that it would acquire the 16 Korean Walmart stores with 3,300 employees for US$882 million (approximately €690 million) and convert them into eMarts. eMart is the largest retailer in South Korea with a market share of about 30 percent.

Since 2009, the Shinsegae Centumcity Department Store in Busan, with an area of ​​293,905 m², has been considered the largest in the world.

In 2015, there were approximately 15 Shinsegae department stores in Korea, including a branch at Incheon Airport and two smaller Shinsegae Style Markets within E-Mart chains (the latter also managed by E-Mart). In 2011, the company was split into E-Mart Co., Ltd. (discount stores) and Shinsegae Department Store Co., Ltd. (high-end department stores). Since then, both companies have been subsidiaries of the parent Shinsegae Group.

A comparison of figures for food retailers in Germany can be found here:

• Local decentralized hubs – logistics centers

E-Mart's e-commerce strategy

In March 2019, the Shinsegae Group, operator of the largest South Korean discount chain E-Mart, launched the online shopping mall SSG.COM.

It is an integrated company consisting of two online retail stores – the Shinsegae department store shopping center and the E-Mart discount store shopping center.

The integration of online shopping processes is intended to efficiently expand the rapidly growing demand for e-commerce offerings under the SSG.COM brand into the future market.

Shinsegae aims to achieve a revenue of 2.3 billion euros from its online shopping business in 2019, representing an increase of 29 percent compared to 1.74 billion euros in the previous year.

In the long term, the group aims to achieve a turnover of 7.25 billion euros by 2023, which will be supported by the increasing demand for delivery services.

The group also operates Shinsegae, the country's second-largest department store chain after the Lotte chain.

The online portal SSG.COM is fully controlled by E-Mart.

Before SSG.COM, several other online shops had already successfully entered the e-commerce market. The first home shopping portal was CJ O Shopping. GS Home Shopping is also among the digital pioneers of online sales, having introduced TV shopping to South Korea for the first time in 1994. In 2001, Hyundai Home Shopping Network Cooperation, Lotte Home Shopping, and NS Shopping joined the market.

And then, in 2010, SK Planet, a subsidiary of SK Telecom, was founded. SK Planet is an internet platform development company that focuses on e-commerce, online-to-offline services, and digital marketing with its shopping portal, 11st. As early as 2016, 11st became the most visited e-commerce website in South Korea. It is also the number one mobile shopping app.

In 2019, the Shinsegae Group launched E-Mart and SSG.COM to close the gap. They are relying on four components:

 

1. Online shopping platform SSG.COM

 

2. Offline pickup service for online orders (home or mobile shopping)

PIXEL, short for Pick Cell, is a pick-up service via smartphone (cell phone). PIXEL is an online home and/or mobile ordering system that allows customers to pick up their goods locally.

The first O2O (Online to Offline) service in Korea.

 

 

3. Delivery service

 

4. Automated warehouse system in the physical shopping mall of E-Mart for 24/7 stock availability

(Department stores in South Korea are open from Monday to Sunday between 10:30 am and 8 pm or 8:30 pm).

 

 

So, all the basic requirements for an ARS are met.

Approximately half of South Korea's 51.4 million inhabitants live in the capital city of Seoul or in adjacent satellite cities. The greater Seoul area is therefore the most important metropolitan center. Consequently, E-Mart operates what is currently probably the most modern shopping mall in the world in Cheonggyecheon (a 10.9-kilometer-long, modern public recreation area in downtown Seoul).

 

Since almost everyone already owns a smartphone, there's no need to provide separate internet terminals. Here at the Meeting Point, customers can comfortably order goods via SSG.COM while enjoying a coffee.

In a well-designed system, the human factor is not overlooked. However impressive the technological possibilities may be, the sociological aspect of human coexistence is also taken into account. The face of autonomy is not the machine, but still the human being.

In addition to the information center (service station), cashiers and other staff can be found in the aisles. Even if only during regular opening hours, this is a humane overall concept. No jobs are being eliminated, and the shopping experience is not being diminished; it has been optimized for the future, benefiting both retailers and customers.

 

 

 

 

Related to this:

• Urbanization in South Korea
• South Korea – Future market for renewable energies
• South Korea is a pioneering market in online retail worldwide