If there is one thing that turns shoppers off, particularly those in a rush, it is the long queues at checkout.
More often than not, the hold-ups are enough for them to abandon their shopping carts. Those who do not have the luxury of putting off their shopping until another time endure the painfully slow inching forward.
Although the business of retail has been altered in many ways, much of the enhancements so far have been focused on e-commerce infrastructure, store performance management system and omnichannel connections. Now, it is entering the next frontier — the automation of check-out services itself, says Lim Yee Yun, founder of Aye Solutions Sdn Bhd.
When the coronavirus pandemic hit and the stringent physical distancing requirements were imposed, retailers scrambled to try and accommodate the changes in shopping behaviours.
Lim felt that there had to be a better way to do things. Drawing from her experience while travelling in Japan, she saw an opportunity to introduce autonomous retail solutions locally.
“At a convenience store at the metro station, all I had to do was tap my local travel card at the machine and I was able to grab-and-go without the hassle of queuing,” says Lim.
The experience stayed with her. “When the Movement Control Order (MCO) was implemented in March last year, I stopped by a pharmacy after work just before they were about to close to get personal items.
“The queue to get into the store snaked all the way across the corridor down a few lots and customers were fumbling with the multiple steps they had to do before they could enter the store, which is now part of the new shopping standard operating procedures (SOPs),” she says.
Lim got to thinking about how such a simple process had become so complex, time-consuming and frustrating. A month later, she resigned from her job and started tapping into her network to set up Aye Solutions.
She wanted to establish a company that would make artificial intelligence (AI) technology accessible to Malaysians and applicable to the mass market through its plug-and-play model — starting with retail.
Necessity is the mother of invention
“One change brought about by the pandemic was inconvenience and, to some extent, inconvenience can be solved with technology. Although I don’t have a background in technology, I have been exposed to many people in this field and constantly briefed about the newest technologies,” says Lim, formerly a consultant at strategic advisory firm, Bower Group Asia.
“Having been exposed to such technology in the past and having witnessed how crucial it is to everyday life in Japan, I wondered why it was not in Malaysia yet.”
Physical retail is ripe for technological disruption as people prefer contactless convenience, especially when shopping for routine supplies, she points out.
“We noticed that one of the industries most hampered by Covid-19 was retail. Many bricks-and-mortar businesses moved online, making them more accessible.
“But I knew that physical retailers didn’t have to be left out and there is a way to help them survive and sustain their business in the long term. The solutions we offer are going to save them costs in the long run, upskill their manpower, and improve efficiencies in their operations and waste management,” says Lim.
For starters, Aye Solutions is rolling out technology to enable unmanned retail outlets. Unlike some of the unmanned stores that have mushroomed since the pandemic, Aye Solutions doesn’t require one to download a dedicated mobile application to enter or checkout of a store.
And while barcode-based self-scan checkout lanes have been available in Malaysia for some years now, they still require in-store personnel for theft supervision, manual overrides and problem resolution.
With technology and powerful equipment fitted by Aye Solutions, all customers need to do is tap their credit or debit card at the autogate upon entry, load their bags and walk out of the store. “If a receipt is required, tap your card on the receipt generator upon exit and the receipt will be printed,” says Lim.
This is made possible using a combination of sensors, AI-powered cameras, computer vision and deep-learning software algorithms used to identify people, their poses and hand positions in 3D. The solution is simplified in a way that can be scaled to fit everything from kiosks to large grocery stores.
Business owners then use an application developed by Aye Solutions to run the stores.
“Let’s say you pick up a water bottle, and realise after several minutes you don’t want it and you place it back on the shelf, the cameras and sensors will capture this as well,” says Lim.
The shelves are equipped with digitalised LCD bars, which will display the price of items and reflect changes in prices automatically during sales or flash promotions. “So, every time you decide to drop the price of an item, you don’t need to print out new labels; you can just enter the new prices in the back-end system and the changes will be reflected. It is also feasible to run one-minute promotions this way.”
Returns and refunds still have to be done manually. Lim says business owners have the flexibility of hiring a person to manage customer service, as they will still have a server room. If they opt not to do so, customers can contact the helpline to arrange for the refund.
She adds that the technology can also be outfitted to recognise minors — seeing that there are age restrictions on purchasing products such as cigarettes and alcohol. “We can add many layers of security not just to prevent theft but also to restrict certain purchases.”
The company is still working on embedding e-wallets into the checkout system, but Lim says this option will be rolled out later, as the majority of Malaysians still use credit or debit cards to complete their purchases.
“There is also the problem of your mobile phone running out of battery when you need to make a purchase,” she says.
According to Bank Negara Malaysia data, principal credit cards in circulation increased from 7.2 million in January 2015 to 9.1 million in January last year. In 2019, the number of credit card transactions stood at 510 million compared with 359.6 million in 2015. Total purchases using credit cards amounted to RM151.3 million versus RM118 million in 2015.
Aye Solutions will be rolling out its proof of concept (POC) store at UOA Business Park in Shah Alam to showcase the strength of its technologies and give prospective retailers a taste of what it can offer.
“We are also doing this to change the view of AI being too complex. We want to change the mentality and help people see the benefits,” says Lim, who hopes the POC store will draw investors.
While the company is rooting for big brands to onboard its technology, Lim says it is working on keeping the cost of its technology competitive so that even a provision shop could consider adoption.
She says the company is willing to work with small enterprises to come up with a payment plan and even help them apply for Industry 4.0 grants to enable them to improve their business offerings.
According to market research and advisory company Allied Market Research, the retail automation segment was valued at US$11.24 billion in 2018, and is projected to reach US$23.58 billion by 2026, growing at a compound annual growth rate (CAGR) of 9.6% from 2019 to 2026. Asia-Pacific is expected to exhibit the highest CAGR of 11.5% from 2019 to 2026.
On another note, business analytics company CB Insights says AI as a whole is projected to account for US$27.24 billion of the retail market by 2025.
Amid the hype over autonomous technology, there are real concerns of job loss. But Lim says Aye Solutions’ AI offerings are aimed at upskilling existing manpower.
She explains: “Say, you are a cashier at a supermarket. You pack, arrange items on shelves, check stock and man the checkout counters — these don’t really add much to your skills. But having technology do these tasks means the cashier can move on to business analysis using the real-time data the technology is churning out.
“The data is in simple language and, based on it, the cashier who is now the business analyst can analyse and identify purchasing trends for the coming months.
“We want to upskill local talent and minimise low-value tasks such as bagging groceries and cash register duties. Entry-level staff at the store will now be engaged in business analysis, which help them build more in-demand skills in the IR 4.0 economy.
“This way, they will remain employed, but with skills that prepare them for the future.”