Smart stores put to the test: which technologies and concepts will prevail?

A cashierless pilot store from Rewe at Frankfurt Airport, a staff-free test store from JD in Beijing, smart shopping carts instead of Just Walk Out at Whole Foods – the smart store market is in flux. Retail companies around the world are experimenting with new automation technologies, but not every concept is successful.

Prof. Dr. Stephan Rüschen from DHBW Heilbronn has been keeping track of these developments for years. In lectures and publications, he analyzes the market for staff-free stores, shows which retailers are carrying out which tests – and what insights they are gaining from them. He spoke to us about the current status and future of the smart store format.

Which form of smart store is currently the most successful?

Rüschen: Looking at the product range, two concepts stand out in particular: Local suppliers with a comprehensive range of products such as Tante-M or Tante Enso are gaining in importance. Direct marketing of local products, for example, in village shop boxes, is also establishing itself.

And which smart store technologies are currently gaining acceptance?

Rüschen: If we differentiate between four basic technologies – self-scanning, grab & go, RFID and robotic vending machines – self-scanning at a terminal before checkout in the smart store is the dominant solution. The investment is manageable and customers are familiar with the technology. This facilitates acceptance, while Grab & Go, for example, is still unfamiliar to many.

How do technologies such as smartphone scanning or robotic vending machines perform?

Rüschen: Smartphone scanning, i.e. scanning items with your own smartphone, has the advantage of extremely low investment costs. However, it is less convenient from the customer's point of view, as customers have to register and use an app. This means that a retailer may lose footfall.

Robotics boxes or vending machine stores are expensive and have product range restrictions, as the goods have to fit into standardized compartments and be easy for the robotics to reach. Customers cannot find their way around the range at a glance, but have to scroll through the selection at the terminal. There are also waiting times if several people want to shop at the same time, so they are not suitable for high-frequency locations. Theft protection is an advantage, but overall these systems are not yet widely established.

In 2024, there were media reports that Amazon's Just Walk Out technology was still heavily reliant on human assistance. How automated are automated stores really?

Rüschen: The computer vision technology is largely automated and reliable. Only in exceptional cases, so-called “edge cases”, is it checked manually whether the AI has recognized the article correctly. However, this only requires a minimal amount of personnel.

Amazon itself has reported that it will rely on smart shopping carts, the “Dash Carts”, for Whole Foods supermarkets in future instead of Just Walk Out concepts. What does this mean for automated store strategies?

Rüschen: I can understand Amazon's decision. I also think that Grab&Go concepts are much more practicable for smaller stores than for large supermarkets with huge product ranges. A large number of customers shop there, often in groups, do their weekly shopping with large shopping baskets and have very different customer journeys. In addition, stores with large spaces and product ranges still need staff to stock shelves and keep the store tidy, despite automation. These additional operating costs partially offset the economic benefits of the technology.

A major pain point for retailers at the moment is the lack of staff. Can smart store technologies compensate for this?

Rüschen: In any case, they enable longer opening hours with fewer staff, which is particularly attractive at high-frequency locations or in rural areas. In urban locations, this can be 24/7 operation, while in rural areas it is usually a question of extending opening hours in the evening. In Germany, however, investments in staff-free stores and their roll-outs are being held back because Sunday opening is not yet clearly regulated in legislation. As soon as there is certainty here, we could see a number of automated stores in city centers, whereas previous tests have often been limited to airports or transport hubs. Another concept that I think is promising is hybrid operation. Hybrid stores can be operated both with and without staff.

What conditions must a smart store fulfill in order to be successful?

Rüschen: A decisive factor for the success of a smart store is its location. High footfall and guaranteed Sunday opening are important prerequisites, as can be seen from successful examples in city centers. However, the product range also plays a key role: customers expect a range that suits their shopping habits – be it a comprehensive convenience range or a specialized selection, such as local products. In addition, technological aspects such as reliable recording of purchases and intuitive use must be ensured.

Finding the right conditions is an extremely complex task, as many examples show. Test locations such as the Deutsche Bahn store at Berlin's Ostbahnhof (East Station) failed not only because of unfavorable walking routes, but also because the offer was not attractive enough and there were too many competing shopping options.

Will payment cards or apps prevail as an access solution for automated stores?

Rüschen: Payment cards have proven to be uncomplicated. If customers first have to install an app and create an account to use them, this puts many off, especially walk-in customers who just happen to be passing by. However, smart store apps with customer accounts and digital customer cards naturally have advantages: they enable direct customer loyalty and targeted marketing measures, as purchasing behavior and preferences can be better analyzed. Tante Enso, for example, uses customer cards that are only available from the age of 18. These also serve as proof of age and enable the sale of alcohol in the staff-free stores.

Is there potential for RFID technology to introduce smart processes in stores?

Rüschen: RFID was long considered too expensive, but is gaining importance in niche markets. Some butchers, for example, use RFID tags to sell without staff, as they pack their products anyway and can therefore automate best-before date checks. In the textile industry, too, RFID is now used not only in supply chains but also in stores, as the tags can be applied at the factory. Decathlon uses RFID tags for store inventory, but also to speed up the checkout process. In the long term, this model could become relevant for retail sectors where integration in the supply chain can be standardized. If every item in a large assortment, such as in food retail, has to be manually tagged with an RFID tag, the effort involved is too great.