CSCMP's Supply Chain Quarterly
January 21, 2019
Forward Thinking

No help needed. Really.

Retailer set to open chain of fully automated convenience stores in China.
JD store

Turning a profit can be tough for brick-and-mortar stores, which often struggle to cover the combined costs of rent, inventory, and, especially, labor. But what if a retailer could operate stores without any employees at all?

One of the world's largest retailers, China's, is taking steps in that direction. JD announced in December that it plans to open a string of unmanned convenience stores across that country. The retailer said it will partner with the Chinese real estate developer China Overseas Land and Investment Ltd. (COLI) to open hundreds of retail outlets that replace clerks and cashiers with "smart store solutions."

JD says it has been testing the concept at its Beijing headquarters since October, using radio-frequency identification (RFID) technology as well as facial and image recognition to track customers' movements and product selection. In the first few months of operation, the headquarters store has seen an average daily customer flow of around 1,000 people and a repeat purchasing rate nearing 70 percent, the company says.

Future versions of the smart stores are expected to incorporate JD's "smart logistics" solutions such as autonomous vehicles for last-mile delivery and an "automated pharmacy," featuring a vending machine that can hold up to 1,500 boxes of medicine and that replenishes its own inventory by connecting to JD's "smart supply chain."

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