Analysis: BingoBox’s Cashierless Store Concept

Amazon Go may have got the press attention in 2018, raising awareness of cashierless convenience store retail, but with just ten stores trading to date its Chinese rival BingoBox has mastered fast replication with over 500 stores and is achieving a strong foothold in this untapped, high margin channel.

While there are clear pitfalls in BingoBox’s concept – it has a limited range, scan and payment processes are still required and it relies on consumer willingness to adopt technology – as it targets new markets it is essential for established traditional convenience retailers to identify the potential threat BingoBox poses.

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Expanding BingoBox cashierless stores into new markets

BingoBox operates more than 500 flat pack-built stores and has expanded from its domestic market into Taiwan, South Korea and Malaysia with store rollout in Japan and Australia in the pipeline. A typical BingoBox store is 160 sq ft, far smaller than the likes of 7-Eleven or Tesco Express stores at c. 1,400 and 2,300 sq ft respectively, making potential sites easier to source, reducing overheads and supporting high sales densities.

Customers enter the store by scanning a QR code via the BingoBox app on their phone, place their items in a scanner and pay via WeChat or Alipay (or a local alternative). While Amazon Go has eliminated the latter two steps from its stores, the process is still efficient since items do not need to be scanned individually.

The less onerous technological requirements for this concept has meant that it is easily replicated across geographies, using the same AI, facial recognition and theft prevention systems – far more so than the technology implemented by Amazon, contributing to its failure at being able to roll out its cashierless format at a similar speed.

Broadening BingoBox’s product offering

BingoBox has responded to demands for efficient and seamless shopping and consumer willingness to utilise smartphone payment methods. However, the retailer will need to broaden its product offer beyond the c. 200 lines across core categories of confectionary, snacks, soft drinks and essential toiletries, especially in markets where convenience retail is mature and consumer expectations for choice, food service options, and fresh and healthy food ranges continue to rise.

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Partnering with local wholesalers or even existing supermarket chains on a wholesale arrangement, would make the product offer at BingoBox more competitive and improve destination appeal.

Other markets are further behind on consumer adoption of technology compared to China and South Korea – therefore market penetration may be slower and audiences smaller. Targeting tech-savvy demographics, principally millennials and generation Z, is essential to building an initial customer following.

One of the many advantages of cashierless store formats is the access to customer data, a benefit which is less accessible to traditional players given shopper anonymity unless they use a loyalty card or pay via an app or mobile wallet. However, despite it not being an issue in China, BingoBox will need to test consumer willingness to share their personal information ahead of market entry.

The immediate threat on the likes of 7-Eleven and Lawson is minimal, but these convenience market leaders must be prepared to react, particularly since BingoBox can target sites where they would find it more challenging – such as underground subways. Moreover, if BingoBox opens stores in less populated areas and neighbourhoods, where footfall levels would not support a more costly staffed convenience store, it has potential to disrupt shopping habits and the performance of nearby competitors.