[Initial Insight] The Accelerated Era of Automation

A small pharmacy that had stood at the corner of a neighborhood alley for over 20 years has closed its doors. Occasionally, when stopping by to buy digestive medicine or headache pills, one would find an elderly couple well over seventy leisurely handing over the medicine and taking a long time to press each number on the credit card payment terminal, carefully checking through their magnifying glass. It was an old and worn pharmacy. Last spring, during the COVID-19 mask shortage when sales were rationed by a five-day rotation system, the grandfather pharmacist, unable to quickly input data into the computer system, made customers wait a long time. Feeling sorry, he personally told neighbors who couldn’t purchase masks when to come back again.

Within less than a week, a 24-hour unmanned pet supplies store opened in the place where the pharmacy used to be. Dog and cat food and snacks, hygiene products like waste pads, leashes, and dog toys were displayed, and customers could select the items they needed and scan the barcodes themselves at a kiosk to pay. It was also announced that customers could help themselves to free gifts given when purchasing above a certain amount. Although pet food can be bought at convenience stores and most pet supplies can be ordered online with next-day delivery, it made sense that the store was opened in a residential area because running an unmanned store would save labor costs.

After the minimum wage for next year was set at 9,160 won per hour, the convenience store industry collectively voiced concerns about the rising labor costs. Already, 20% of all convenience stores are operating at a loss, unable to cover labor and rent expenses, and there are worries that the number of loss-making stores will increase with the higher minimum wage. As a result, some stores have given up operating during late-night hours or have rapidly increased the number of 'hybrid stores' that switch to unmanned operation at night. In the first half of this year, the number of unmanned stores among the four major convenience store chains approached 1,000 (990), accounting for 2.19% of all convenience stores (45,277 as of the end of last year), most of which converted to unmanned operation between last year and this year.

However, the rapid increase in unmanned stores is not solely due to the minimum wage hike. Kiosk systems have already been rapidly spreading across the distribution and food service industries, including cafes, fast food, large supermarkets, and electronics stores, enabling consumers to handle ordering, payment, and packaging themselves. Unmanned convenience stores are also an option since the headquarters develop and install automated systems. Previously, unmanned stores had restrictions on selling alcohol and cigarettes due to difficulties in adult verification, but now purchases can be made using mobile IDs, intensifying the competition among companies to develop new technologies.

The COVID-19 pandemic has also fueled this unmanned trend by increasing non-face-to-face consumption activities. Sales methods where staff would kindly approach and guide customers are no longer welcomed in an era where masks and social distancing are the norm.

Ultimately, rising labor costs, technological advancements, and the COVID-19 situation have accelerated and transformed the era of unmanned stores. This inevitably reduces service jobs, while increasing the need for investment in unmanned store management and security. It is also pointed out that measures should be taken to prevent the elderly, who are not familiar with kiosk use, from being excluded and to avoid frequent system errors that cause inconvenience to consumers. Rather than simply accepting the deepening trend of unmanned systems in our daily lives as inevitable, thorough preparation and strategies are needed to bring real benefits to both small business owners and consumers.

/Deputy Head of Consumer Economy Department

This content was produced with the assistance of AI translation services.