Asia Business Channel

7-Eleven Japan begins tests of NEC Facial Recognition technology

7-Eleven Japan has opened an experimental concept store in Tokyo offering payment through facial-recognition technology developed by NEC. The test store is located inside a building that is home to companies from the NEC group and can be accessed only by employees.

The pilot store is scheduled to open this month with just over 10% of the floor space of a typical Seven-Eleven location.

Registered NEC employees will by authenticated by scanning company ID cards or facial recognition to enter the store, and then again after scanning item barcodes for purchase. Payments are automatically deducted from the employee’s salary.

Stock is ordered and shelved by human employees of the store, but in addition to making shopping faster, the automated checkout process reduces the staff necessary to run the store from two or three people to only one.

The trial is a precursor to a planned rollout of unmanned convenience stores in locations such as office buildings, car parks and factories allowing consumers to purchase essential items where it may not be commercially viable to operate a full-scale staffed store.

Rival retail groups including Aeon and FamilyMart have already adopted self-service payment checkouts and Lawson is now testing a system that uses barcodes scanned by smartphones.

The use of facial recognition technology in retail remains a complex issue since cashierless stores normally require customers to be preregistered. This is next to impossible for convenience stores, which count children, adults and senior citizens among a very broad customer base.

George Brostoff, CEO of SensibleVision said in an interview with Biometric Update, a industry website, that differences in payment infrastructure, cultural context, and other circumstances make Asia more likely to have production roll-outs of facial biometrics for retail faster than North America or Western Europe,

The global market for retail biometrics is in its early stages and is significantly fragmented between regions.

Retailers in Asia are testing biometric systems for retail payments and customer interaction, while most trials and deployments with retailers in North America are focused on security. The range of applications is broad enough for biometrics to be a potentially disruptive force for the retail industry worldwide in the foreseeable future.

In China, there are more than 1,000 cashierless stores in operation that are run on facial recognition and digital payment systems. Facial recognition technology is also being tested by a variety of retailers in South Korea and now Japanese retail groups are rushing to catch-up and find the retail biometric and payment systems that works best for them and their customers.

Japanese technology companies are also developing and testing other types of retail biometric payment authentication systems. Fujitsu is working on palm vein biometrics while Hitachi is developing finger vein biometrics and both companies say they will partner with banks that can offer digital payments.

The technology companies are pushing Japanese retailers to begin trials of their systems as soon as possible, and in 2019 consumers will likely see a variety of systems being tested across Japan.

Experts also see additional applications for biometric retail systems and expect them to begin trials and then rollouts in the next two or three years.

• Age verification is a logical next-step for automated self-check out systems selling age-restricted items like tobacco or alcohol

• Customer loyalty programs that leverage biometric technologies are being developed by advertising agencies, brands, market research companies and media companies

Alan Goode, Managing Director of the Goode Report summed up the new retail technology market by saying: “What we’re seeing is immense hybridization going on in terms of payment, ticketing, identity all getting molded into one.”

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