7-Eleven to launch automated, self-service convenience stores

Posted on : 2018-08-22 17:11 KST Modified on : 2019-10-19 20:29 KST
Questions abound concerning correlation to minimum wage hike
A vending-machine style 7-Eleven undergoing a trial program at Lotte E&M in Incheon. (provided by 7-Eleven)
A vending-machine style 7-Eleven undergoing a trial program at Lotte E&M in Incheon. (provided by 7-Eleven)

As the conflict among convenience store owners, franchise headquarters and the government intensifies over the recent hike in the minimum wage, 7-Eleven – one of the three major convenience store franchises in the country – has been getting attention with its decision to start rolling out convenience stores largely consisting of a row of vending machines.

Though some convenience store companies have adopted self-service checkouts and simplified vending machines selling cigarettes and other products, this is the first time that entire stores have been operated on a self-service basis.

“We’re testing out 7-Eleven Express, a high-tech vending machine-style convenience store that is fully prepared to service customers’ convenience,” 7-Eleven announced on Aug. 20.

Echoing the name “express,” the design of this fully customer-operated store is modeled after an express train. The store, which consists of five vending machines linked together, is 10.8m long, 2.5m high and 1m wide. The vending machines carry about 200 products, which are divided into five categories for which there is high consumer demand: drinks, snacks, prepared meals, processed food and non-food products.

“Our product selection focuses on small servings of daily necessities and best sellers, to the exclusion of tobacco products and alcoholic beverages,” 7-Eleven said.

After inputting the product number into the vending machine or selecting items from the central kiosk, consumers can make a purchase using a prepaid transit card or credit card. The vending machines don’t support cash purchases. A safety flap is also included to prevent harm when products are being dispensed. Despite consisting almost entirely of vending machines, these new convenience stores also come equipped with a microwave and a hot water dispenser in the central area, enabling customers to make instant ramen noodles or heat up a microwave meal.

In short, 7-Eleven Express provides nearly all the services of an ordinary convenience store with a human staff. The prices are the same as at a normal 7-Eleven, in line with the company’s principle of charging identical prices at all its stores.

A total of four vending machine-style convenience stores are being operated in this trial program: two at the headquarters of 7-Eleven in downtown Seoul, one at Lotte E&M in Incheon, and one at the headquarters of Lotte Rent-a-Car in Anyang, Gyeonggi Province. The company is taking steps to commercialize the vending machine-style convenience stores and will be accepting franchise applications as early as next month.

But rather than regarding the vending machine-style convenience stores as a separate business, the company has decided to only allow current franchise owners the option of opening one as a “second store” in addition to their original franchise. “This model is designed to maximize the profit of our current franchise owners,” 7-Eleven explained.

Previous self-service convenience stores had largely been adopted with the goal of cutting down on personnel costs during the early morning hours, when there are fewer customers, but the vending machine-type convenience stores are regarded as a completely new model since they have no regular employees.

The sticking point, however, is the cost. Though 7-Eleven has declined to disclose the specifics thus far, many expect that the vending machine-type convenience stores will be more expensive than the ordinary kind. The main reason is that these vending machines are more akin to precision machinery than refrigerators.

“Owners will be very interested in a chance to save on their payroll. But if the franchise opening price is set too high, owners aren’t likely to expend in the short-term because of financial considerations,” said the owner of one convenience store franchise.

By Lee Jung-gook, staff reporter

Please direct comments or questions to [english@hani.co.kr]

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