At its core, unattended retail refers to a shopping environment where consumers can browse and purchase goods without the need for face-to-face interaction. Once associated with low-ticket purchases of goods, such as snacks or soda at vending machines, unattended retail has expanded to higher-value products due to technological advances and shifting consumer preferences.  Further, emerging formats, such as micro markets and smart stores, are quickly taking share from the vending machine market and are further expanding unattended retail into higher-value items. Micro markets offer self-service access to a variety of goods, while smart stores use cashierless checkouts to automate processes entirely, allowing customers to walk out of the store with their purchases.

In a recent report, Cristopher Kennedy, CFA, analyst in William Blair’s financial services and technology sector, examines unattended retail and highlights  key beneficiaries of this growing market.

While small-ticket items still account for the majority of vending machine sales, higher-value items, such as fresh foods and nonconsumables, are a growing trend in the market. Micro markets and smart stores are new channels of growth within the unattended retail market, enabling broader product assortments, higher average ticket sizes, and strategic placements in high-traffic areas. Our analysts believe this growth is sustainable, estimating micro markets can generate four times the volume per location, while smart stores achieve an average ticket size of $4.25, more than double that of traditional vending at $2.11.

We view unattended retail as a compelling yet often underappreciated growth vector for electronic payments. Small-ticket transactions remain largely cash-based, and similar to tap-to-pay cards, technology in unattended retail is helping convert small-ticket transactions. Unattended retail should represent a tailwind to the electronic payments’ ecosystem, including the card networks, merchant acquirers, card issuers, and payment processors.

For more information on the companies from Cristopher Kennedy’s coverage list, please contact us or your William Blair representative.