Shekel Brainweigh (ASX: SBW) is leading the automated shopping micro market transition with its smart coolers that comprise advanced weighing technology, artificial intelligence and are equipped with the company’s “smart shelves”.
At the recent Chicago-based National Automatic Merchandising Association show, director of strategy and planning at PepsiCo Inc Bill Moxey said it is anticipated that thousands of locations will be implementing unattended retail concepts and technologies.
This is driven by consumer demand for self-service so they can shop at their own pace, with the unattended setting also believed to be more efficient.
These findings were made from a PepsiCo consumer study.
Research has also shown consumers spend between 20-40% more in a transaction in an unattended setting because they feel “less pressure”.
PepsiCo’s study also found a third of consumers in the US will use unattended retail more if there were loyalty programs, more channels and the right products were on offer.
The food and beverage giant has followed up its findings by beginning development of its own unattended retail offerings.
Shekel already there
After identifying the shift to automation in retail, Shekel has already created several solutions including its Innovendi and Hubz smart or micro coolers, which are gaining popularity around the world.
According to Shekel chief business development officer Rami Bahar, the company’s micro coolers effectively change how customers’ see and engage with products.
Introduced in 2019, Shekel’s Innovendi is its first-generation smart cooler that incorporates Shekel’s product aware shelves and allows for stocking of fresh and healthy foods and beverages.
When using an Innovendi unit, consumers present an ID or credit card to unlock and open the door. They can then grab items from various areas of the Innovendi and even place ones back. Once the final decision on purchases is made, consumers close the Innovendi door with their item selection in hand, and their payment is automatically taken.
Inventory management data is communicated in real-time to the Innovendi operator. This allows for the operator to manage its stock and products more efficiently.
Shekel’s Innovendi units are already operating and can be installed in airports, gyms, unit complexes, hospitals, campuses, hotels, and micro-market stores, among others.
The Innovendi unit won the Connected Retail Innovation of the year IoT Breakthrough Award for 2021.
Hubz smart stores
Meanwhile, the Hubz units are Shekel’s second-generation smart cooler – offering a wider product selection with up to 30 different SKUs (stock keeping units), temperature control and “health lock”, which automatically locks the door if temperature values deviate from the fresh food storage recommended range.
Similar to the Innovendi, a Hubz cooler is only accessible when a customer presents a payment option.
It also contains Shekel’s product aware technology, which uses sensors, and machine learning algorithms to track exactly what product has been selected.
When the Hubz door is opened, a customer’s selection is detected and relayed via an interactive touch screen.
Payment is made once selections are decided upon and the door is closed.
Hubz is also backed by Parlevel Systems’ powerful management tool, which enables businesses to garner valuable insights to make informed decisions to maximise inventory efficiency, optimise service and increase “space-to-sales”.
Value to owners
Mr Bahar says Shekel’s smart coolers are essentially a tiny autonomous store.
The units provide operators with numerous benefits compared to selling products through a large retailer such as Woolworths (ASX: WOW) or a traditional vending machine.
For Israel’s largest dairy company Tnuva Group, Shekel’s smart coolers enabled it to sell a variety of its milk, cheese and other dairy products exclusively from each unit – eliminating any competition for its products and a third party taking a cut in the revenue.
Unlike a traditional vending machine, sales from Shekel’s units are much higher, because they are used as a micro store and can stock any product the owner chooses.
Adding to operator benefits is the collection of “real-time” data that shows product selection and inventory. This can boost efficiency in re-stocking and assist the operator with pricing, offerings, positioning and profit margin controls.
Mr Bahar also noted the Shekel units require less maintenance, with temperatures able to be set and modified to keep products in optimal condition.
Shekel’s Hubz units are currently deployed in Israel, the US, and Europe and demand is growing, with multiple large orders coming through this year alone.
Two hospitals in Australia also have Shekel’s machines, with more requested.
Another advantage of Innovendi and Hubz, is the ability to deploy and run several machines as part of a fully autonomous store, or side-by-side with complimentary offerings.
Greater variety for consumers
For consumers, Shekel’s units offer the convenience of opening a fridge door with a variety of fresher and healthier products available 24/7.
Shoppers can select from an array of items, including fresh and healthy meals and beverages without pressure.
Products that are unwanted can be placed back on the shelf, with Mr Bahar likening the process to using your own fridge at home.
He said there was a “significant increase” in demand for small urban grocery stores to service young and small families that are seeking convenient and healthy options.
“With smaller homes and tight schedules, shoppers are looking to purchase the same day dinner near their home – sometimes ready-made fresh and healthy food.”
“These small groceries with limited selection and shoppers’ traffic cannot afford labour intensive services, and autonomous shop models are critical to present realistic return on investment,” Mr Bahar explained.
Endorsed technology and multiple revenue streams
The contactless retail market is predicted to boom in the coming years and Shekel has developed three primary streams to generate revenue as it cements its foothold in the sector.
The first revenue avenue comes from sales of the hardware – in this instance, Shekel’s Innovendi and Hubz units.
A second revenue stream is through selling its software as a service technology that provides real-time data on product inventory movement for the operator.
Eventually, Shekel plans to harness the information it has developed from its AI and machine learning to generate a data analytics as a service product, which can provide operators of the hardware with greater consumer and product insights.
Shekel’s technology has secured gold partner status with technology giant Intel across several of its offerings including the Innovendi and Hubz units.