"More than a person, I'm a convenience store worker... My every cell exist for the convenience store," declares Furukura-san, the 36-year-old protagonist of Sayaka Murata's award-winning bestseller, "Convenience Store Woman."
She is so dedicated to her work as a part-time store clerk that she makes a vocation out of it. Fingerprints on the glass door need wiping; the ice-cream cabinet must be rearranged; the sundries shelf could use dusting... Nothing escapes her as she "listens to the voice of the convenience store."
This deadpan novel asks what work and happiness mean in the highly industrialized world but -- read with a business mind -- the story also has important implications for the automation of retail, a trend seen in recent years from self-service checkouts to frictionless Amazon Go stores.
Japanese konbini (convenience stores), with 58,000 nationwide, have managed to grow their revenues, even with a deflationary economy and a dwindling population, by expanding their services, from receiving parcels and transacting utility bills to frying chicken and brewing coffee.
Sayaka Yasu, an industry expert, estimates that a regular konbini clerk in a large chain operates approximately 1,200 different tasks, up 30-40% in the last decade, because they need to perform so many services beyond simple sales of merchandise. Multitasking 1,200 operations requires deeply humane dexterity from Furukura-san, even as she seems to renounce humanity in dedicating herself to konbini.
Still, automation is the raging trend in retail worldwide. China recently went through a craze of automated stores only to realize that high-margin and popular to-go items such as fresh groceries are hard to offer without human hands. As the novelty wore off, unmanned stores ended up looking like giant vending machines, stocked with predictable long-shelf merchandise without much allure.
Supermarkets are experimenting with automation particularly in the area of payment, such as Walmart in the U.S. "Scan & Go" started with customers picking up in-store devices to register the bar codes of items they wanted to buy, and has evolved into them using smartphone cameras and cashless payments.
But to breeze through the process, you need to download the apps and register, and be able to operate the camera swiftly. Are we using technology or is tech using us? The hurdle for arriving at a Zen state of automation is so high that it remains to be seen if the experiment will be successful.
Meanwhile, privacy-concerned consumers are wary of the insatiable desire of big chains to get more personal data by twisting their arms to pay cashless.
One vision of the holy grail of automated checkout is offered by Amazon Go, with 11 outlets in U.S. as of July 2019. Amazon Go requires no scanning -- you simply walk out.
The store is equipped to monitor your movement and what you put in your basket, as well as analyze all angles of its retail operation by artificial intelligence to optimize everything from purchasing to pricing. Certainly this is one picture of future retail. But is it the only one?
Retailers would generally like to improve the consumer experience while containing the operational costs, retaining staff and looking after the bottom line, so automation can be useful here, to a certain extent, but it should not be confused as the end.
Scan & Go or Amazon Go promises to ease queuing and payment for consumers, but there are other levers to improve shopper experience which should not be forgotten in the sweeping vogue of automation.
One is to focus on personal contact in the store. Store experience is not all about the shiny, "optimized" merchandise on the shelf, but is affected by the spontaneous interaction with the employees.
Even with a hurried stop in Japanese convenience store, the impression is quite different if a consumer is greeted nicely with eye contact or met by a could-not-care-less attitude. It is time-tested: happy customers make more purchases.
In a market where the jobs-to-applicant ratio nears four times in hospitality, which includes retail, Japanese retail still needs shop floor workers. In the real world, Furukura-sans are hard to come by as konbini clerks have been regarded as the bottom of pyramid for temp work, but does it have to be so?
Yaoko, a grocery market chain with 172 outlets in Kanto area, empowers part-time workers, often local mothers, whom they call "partners," by delegating merchandising decisions. Yaoko's rationale is that the partners, rather than full-time employees parachuted in from headquarters, know best what the locals want.
Empowering and investing in shop floor workers will augment the brand value as well as contain retail's notorious staff attrition rate, which justifies better compensation and welfare. Motivated employees create the virtuous cycle of better performance and treatment.
The business case for investing in sensors and AI to transform a store into a futuristic one, therefore, should be tested against investing in employees, an area where the franchise's headquarters and franchisees can collaborate.
More fundamentally, retail should take another look at consumers to update its business model before rushing to maximize automation. While bricks and mortar are under attack by e-commerce, Japanese convenience stores have managed to survive thanks to the instant nature of the consumption they provide, unlike e-commerce.
The negative side is that konbini are tempted to keep increasing their ranges, perpetually driven to pitch new products to entice shoppers.
But consumers do behave differently in the digital age. We take multichannel shopping for granted. Can bricks and mortar offer something new? What if we were able to pre-order online a daily basket of konbini items and have it ready to collect at the outlet on the way to or from work. From time to time the shop may surprise us with a new product thrown in free as a trial.
These operations will be a hybrid of automation and human handling as automatically generated shopping lists will be assembled by an employee. Not only will the new model create loyalty, but a critical mass of faithful customers will provide the konbini with predictable and stable revenue.
Automation is the buzzword in today's quest for retail efficiency, accelerated by Japan's dire labor shortage. Automation, however, has its natural limit in the complicated operation of an existing real store.
Moreover, retail remains a deeply human industry with regular humane interaction, which should be enjoyable and not trivialized. Automation should help shoppers and workers, but employees and consumers should come first.
Nobuko Kobayashi is a partner with EY-Parthenon, a strategic consulting group within EY Transaction Advisory Services, based in Tokyo