Types of Autonomous Stores & How to Choose the Best One for Your Business

Imagine walking to your favorite store, picking up needed products, and simply walking out. No long checkout line, no scanning products, and no conventional checkout systems. Autonomous stores have the power to do that, and apparently this is exactly what consumers expect from retailers.

According to a 2021 retail shopping survey conducted byShekel Brainweigh Ltd, 75% of consumers are interested in autonomous shopping, even though only 3% have had previous experience with it.

As interest in this technology rises, businesses are on the hunt for effective and flexible solutions to meet customer demands and cater to a broader range of consumers.Statista states that the number of stores offering autonomous checkouts grew from 350 in 2018 to 7,250 in 2023, and is expected to reach a whopping 10,000 next year.

In this article, we will look at the different types of autonomous stores and discuss how they can address the needs of both buyers and businesses.

Understanding autonomous stores

Before we dive into the different variants of autonomous stores, we need to understand the general idea behind the solution.

An autonomous store is a place where customers can choose items from the shelves, put them into their bags, and walk out without having to go through the conventional checkout process. The process excludes the need to involve cashiers or even self-checkout stations entirely as customers can pay via the retailer's app or the money can be deducted from their credit/debit card.

All of this magic comes to life thanks to a blend of several emerging technologies, including computer vision, RFID tags, AI algorithms, and advanced sensors. These tools allow the store to identify the products, recognize the customer, and pinpoint shoppers' activity within the retail space.

Many of the autonomous store infrastructures include such elements as:

• A digital signage kiosk with interactive screens enabling identification and admission at the store’s entrance.
• An integrated camera system recognizing the goods and items selected by the customer.
• A backend technology with a central order processing system that’s responsible for assigning prices, collecting payments, and sending invoices to the buyers via their app.

These components and the way of working might differ depending on the store’s size, location, the type of offered goods, and the customers who visit the spot. That’s why, at the moment, we can distinguish a number of different autonomous store variants in the market.

Types of autonomous stores

Store-within-a-store

A store-within-a-store, also known as a shop-in-shop, refers to a specific scenario where the retailer provides an autonomous shopping experience as a smaller presence within a larger store (often unrelated to its brand).

A good example of a store-within-a-store model isthe facility opened by Żabka (Polish leader in modern convenience stores) in Decathlon back in 2021. Shoppers can visit their favorite convenience store while shopping for sports goods. The camera system and smart algorithms collect the amount due for purchases without the need to involve any personnel or checkout systems. All the customer needs to pay is their app. Since then, Żabka has also opened similar outlets in gyms and Leroy Merlin.

Here’s a preview of the store from Żabka:

Source: https://www.youtube.com/watch?v=ZMVbwVpBkKc

Pros of the store-within-a-store variant

An undoubtful advantage of shop-in-shop is the easy access to the customers. You can gain access to a brand new audience, who can now visit you on the way to their destination.

This way, retailers can monitor the responsiveness of potential buyers to the introduced technological innovations without having to spend a substantial budget on a stand-alone retail space.

Choosing to introduce the shop-in-shop solution can also tighten the cooperation between the two retailers, open up new cross-promotion possibilities, and lead to sales synergies.

Cons of the store-within-a-store variant

The biggest downside to a store-within-a-store is the dependence on the entity providing the shopping space. If the entity decides to close down for renovation, holidays, or any other reason, this will translate to financial losses on the shop-in-shop side.

Another disadvantage of a shop-in-shop solution is the need to limit the assortment. Due to the smaller size of the facility (compared to a stand-alone store), the retailer usually has to present only a part of their offer. This can diminish sales opportunities and discourage customers from visiting the retailer's stores in the future.

Stand-alone retrofit store

A stand-alone retrofit store is a facility that replaces a traditional store previously located on a given premises. This solution is often adopted by retail chains that want to test consumer interest in the idea. A proven spot with a large number of customers can provide lots of insights about the level of shoppers' openness to this type of innovation.

In 2021, Circle K partnered with AiFi to take a swing at the solution andconverted one of their petrol stations into a self-operating facility, becoming one of the first stand-alone retrofit spots on the market.

Here’s how the stand-alone retrofit store works for Aldi Nord:

Source: https://www.youtube.com/watch?v=2UJzfUohk14

Pros of the stand-alone retrofit store variant

The greatest thing about the stand-alone retrofit is the fact that it uses stores that already exist – they are recognized by customers and have established logistics processes in place. There’s no need for additional marketing to get the place going from scratch.

Using a recognized place also allows the retailer to compare the functionality of their conventional service with the new way of working.

Having gained insight from the previous “traditional” operations in this location, the retailer can compare the efficiency of both models and decide whether the autonomous tech works for them and is worth scaling to other locations.

Cons of the stand-alone retrofit store variant

In terms of potential problems, one should bear in mind the need to adapt the store's format to the existing location. In some cases, this may be problematic, especially with larger premises, where retailers would have to invest a substantial sum in order to introduce new technologies to the facility.

Another potential watch out is the risk of outflow of customers who are not convinced by the proposed changes in the modernized shopping experience.

Stand-alone store in a new location

As the name suggests, this type of store is built from scratch, in a place where the retailer has not yet operated.

If situated in a location with heavy traffic, there’s a good chance that the cost of investment will pay off – and without the risk of losing shoppers accustomed to a traditional store’s operations.

Pros of the stand-alone store in a new location variant

A lot of stand-alone stores are built in facilities with pre-existing technical setups. This allows retailers to save time and money. With the autonomous store technology in place, facilities can be up and running in as soon as 2-3 days.

Cons of the stand-alone store in a new location variant

Setting the store up in an unexplored location can also bring some new risks.

Contrary to a retrofit’s tried-and-tested facilities, some new spots might turn out to be less fruitful in terms of incoming customers. When operating in uncharted territory, the owner has to attract a new audience that isn’t yet used to the new facility. In some cases, they’ll have to start from scratch by building awareness of the brand, and then the location itself.

Hybrid store

A hybrid facility offers a bridge between an autonomous store and a conventional shopping experience. In this particular model, it’s up to the customer whether they choose to shop with or without the support of a salesperson.

This concept is often confused with the self-service checkouts implemented by major retailers in supermarkets, but they are, in fact, two different things. Self-service checkout refers to the checkout system, where customers single-handedly scan barcodes, bag items, and pay for chosen products at specialized kiosks with barcode scanners.

Hybrid stores, on the other hand, support the grab-and-go approach and they utilize the same autonomous technology as other autonomous shop variants. Customers shop and pay with an app, are followed by cameras, and no other people are involved in the process, but, on top of that, hybrid stores provide a more traditional way of shopping if needed.

This solution has already been adopted by major grocery chains, such as REWE in Germany andTesco in the UK.

Here’s how the hybrid model works for Tesco’s Fulham Reach Express GetGo:

Source: https://www.youtube.com/watch?v=aIYZiAJl8lU

Nevertheless, please note that a hybrid store is not 100% autonomous – which might be perceived both as an advantage and a downside.

Pros of the hybrid store variant

Introducing hybrid store operations can be a great way to start your journey with autonomous stores. It provides time for both the retailer and the customers to get acquainted with the new technology. In case of any issue, there's still that much-needed human presence that can provide the shoppers with support.

By offering customers the choice of shopping and payment methods, it's the most versatile type of autonomous store mentioned.

Cons of the hybrid store variant

The biggest downside of the hybrid choice is the fact that the retailer has to invest in the new solution without immediately decreasing the costs associated with the traditional shopping approach. This means that in the short run, the facility's maintenance costs will rise.

Comparison table of autonomous stores models:

Choosing the right type of autonomous store

Before making the decision to go autonomous, it’s important to take a few factors into consideration.

The store-within-a-store model is often chosen by FMCG companies that sell food-related products. They fit well in other facilities, such as gyms, sports stores, etc.

Opt for this, if:

• You’d like to use this setup to test your customers' responsiveness to the autonomous store concept before expanding further.
• You want to introduce such a store concept to a broader audience without committing to a full store conversion just yet.
• You are collaborating with a larger retailer or a facility owner and would like to take advantage of their customer traffic.

A stand-alone retrofit store is a viable choice for when you already have a successful traditional store in a high-traffic place. It can provide you with some great insights about your customers and give you the ability to compare the store's performance with the traditional version.

Choose this if:

• You already have a successful traditional store in a high-traffic location.
• You’d like to convert your existing store to autonomous to gauge customer interest and compare its performance against the traditional version.
• You have the resources needed to adapt the store’s layout and infrastructure to support autonomous operations.

A stand-alone store in a new location is the ultimate choice for when you're just entering the market or want to expand to places where your brand has not yet operated. It is important to choose a spot with lots of foot traffic and a community open to new tech.

Go for it if:

• You're entering a new market or a location where your brand hasn't operated before.
• You’d like to build a new store and create a fresh, modern image for your brand in a specific area.
• You can leverage already existing formats and established setups to save time and resources.

A hybrid store is the perfect choice for those who wish to dip their toes into the new technology, but don't want to go all the way just yet. It's an ideal way to start, allowing customers and employees to try the system out. It offers shoppers the most flexible shopping experience that caters to both tech-savvy and traditional customers. If the autonomous tech solution proves to be as efficient as it was planned to be, you might then consider moving to a fully autonomous model.

Select it if:

• You want to offer a flexible shopping experience that caters to both tech-savvy and traditional customers.
• You'd like to transition from fully human-assisted to amore automated model gradually.
• You want to engage customers with autonomous shopping while retaining the option for human assistance.

It's also worth remembering that while going autonomous, retailers need to think about store distribution, the distance between facilities, and whether the chosen model addresses the needs of customers in the given area.

Will the future of retail be autonomous?

All the signs are pointing toward a more autonomous future.

Customers want flexibility in their shopping experience, and that’s what autonomous stores can provide them. With more autonomous shopping options in the game, they can now freely choose the way they shop and pay.

Yet, as we notice more and more examples of successful implementations of autonomous stores, we must remember that these solutions are still relatively costly, and they might not work for everyone.

Before going all in, it’s important to start with your customers and their specific preferences. Begin by learning how eager they are to use autonomous technology and how much they rely on the traditional, human-assisted customer experience.

If you see their interest, make sure to prepare yourself well. Choose an accurate model for your business, establish a well-thought-out strategy, get the right technology in place, and build an outstanding CX.

All of this will influence the results and ROI of your investment.