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Business Trends

Seven-Eleven taps facial recognition for future unstaffed stores

Cashierless shop to take center stage in labor-short Japan

NEC's facial recognition technology is slated to be used in the 2020 Summer Olympic and Paralympic Games in Tokyo.   © AP

TOKYO -- Seven-Eleven Japan is teaming with NEC to open a cashierless convenience store that uses facial recognition to authenticate shoppers and check them out.

Japan's retail sector as a whole faces an urgent need to improve its achingly low productivity. The growing difficulty of hiring staff amid a deepening labor shortage, combined with rising costs for part-time workers, is forcing convenience stores in particular to find other ways to improve efficiency and remain competitive.

Against this backdrop, this move by the Seven & i Holdings unit to test a minimally staffed convenience store could be a first step toward the eventual debut of unmanned stores in Japan.

Seven-Eleven's pilot store will open in December inside a building in Tokyo where an NEC group company has offices. It is a small store with just over 10% of the floor space of a typical Seven-Eleven location, and is meant for NEC group employees who have preregistered to shop there.

To enter, shoppers must either wave their employee identification cards in front of a reader or be authenticated by facial recognition. To check out, they scan the bar codes for items they want to buy and identify themselves via either facial authentication or with their employee ID at a special terminal. Actual payment involves deductions from their salary, eliminating the time spent paying with cash, credit card or e-money.

This pilot store is not an unmanned shop because staff is still needed to place orders and stock shelves. But by eliminating cashiers, a store that might otherwise need a staff of two or three can do with only one.

The design makes shopping faster with less wait time. Seven-Eleven will consider introducing the approach at stores that are limited to shoppers from offices and factories.

In the U.S., Amazon is spearheading the introduction of cashierless stores with Amazon Go, where cameras and sensors track who is buying what and the money is debited when shoppers leave through special gates. The first store opened last January and the company is believed to have an eye on expanding to as many as 3,000 locations by 2021.

In China, about 70 companies, including operators of online shopping sites, are running 1,000 unstaffed stores already, and more companies are stepping over business-segment and business-category barriers to join the fray.

In general, cashierless stores use some means of authenticating shoppers when they enter to prevent shoplifting, requiring that people preregister to shop in such stores.

It has been hard for Japan's leading convenience store operators to expand in this way because their customer base includes everybody from children to senior citizens.

But now that it is growing ever harder to secure clerks, and now that more and more people are using smartphone apps to pay for things, Japan's retailers are exploring minimally staffed and staffless stores.

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