According to the National Retail Federation there were approximately 3.8 million retail stores that provided more than 42 million jobs in the US in 2016. Retail store sales are forecasted to grow 3.4 percent this year, although this trails the 7-10 percent sales rise expected from E-commerce sites. Meanwhile in China, the number of convenience stores exceeded 100,000 for the first time in 2017, and an increasing number of these are smart stores developing new retail models for example by automating checkout. Loup Ventures estimates the US market for automated checkout is worth US$50 billion. This is a huge industry in a process of global transformation, presenting many opportunities for AI to make a difference.
Traditional convenience stores already have a huge amount of transaction and inventory data. With the help of digitization, this data can reveal users’ gender, age, the items they bought, and repurchase rate. All this data can be also used not only to make business decisions, but also to discover ways to upgrade the store itself to the next level. In this article we’ll look at current trends in checkout-free retail and what the future holds for this growing sector.
Amazon
Amazon was one of the earliest companies to realize the check-out free store concept. Amazon Go debuted in Seattle last January and there are now four of them in the US. Amazon’s “Just Walk Out Shopping” is a new retail experience: users enter the store using the Amazon Go smartphone app, then simply grab the items they want and then leave. The store is equipped with an array of cameras and sensors which track customers’ movements and which items are taken from the shelves, and process the data using computer vision and machine learning to determine who to bill for what. Amazon Go’s launch was widely covered in American media, and its success has attracted other retailers to the checkout-free concept.
Trigo
Israel-based computer vision startup Trigo Vision’s automation platform aims to bring a checkout-less retail experience like Amazon Go to existing brick-and-mortar stores. Trigo is developing a solution that uses tracking software powered by machine learning and ceiling-mounted RGB cameras to track customers and items. The company says this subscription-based solution allows retailers to keep most of the original structure of their store and simply apply the system over it. Trigo is currently conducting tests in several locations and discussing partnerships with global grocers.
AiFi
AiFi, a Santa Clara-based computer vision startup, is developing a scalable, checkout-free system for retailers. Like Amazon Go, this system also uses cameras, AI algorithms, and sensors to create the checkout-free experience. AiFi’s system prioritizes scalability and stores need not undertake heavy physical restructuring, making AiFi easier to adopt. Moreover, AiFi’s computer vision technology is suitable for spaces much larger than the Amazon Go stores (which are around 18,000 square feet / 1,672 sqm). The company will launch a pilot project by the end of this year, and envisions transforming retail superstores into “grab and go” shopping environments without checkout lines.
Walmart/Microsoft
US retail giant Walmart is collaborating with tech giant Microsoft to upgrade its stores and streamline its shopping experience. The partnership aims to challenge Amazon’s leading position and includes machine learning, AI, and data platform solutions to develop cashier-free, no-scan checkouts, including a system that mounts cameras on shopping carts to track items. Microsoft has already showcased its automated checkout basics at its Retail Experience Center in Redmond.
BingoBox
BingoBox is a Chinese staffless convenience store concept which opened its first location in June 2017. The AI system includes image recognition, dynamic shelves, and AI background solutions. Although BingoBox is also a no-cashier store, it does not operate like Amazon Go, Trigo, or AiFi. Customers access the store using a smartphone app, then scan the products they want using the shopping app. When they’re done, payment is processed and the exit door opens automatically.
| Company | Tech | Application | Phase | Partnerships | Others |
| Amazon | Cameras and sensors to capture the customers’ movements and what items are taken from the shelves | No checkout needed | Opened to the public in 2018 | Opened additional Amazon Go stores in Seattle and Chicago, there are now five in total | |
| Trigo | Developing a tracking software powered by machine learning and a system of ceiling-mounted RGB cameras to track customers and items | Create a platform for retailers and deliver a checkout-less experience like Amazon Go | Trigo is conducting tests in a few undisclosed locations | Discussing partnerships with international grocers | |
| AiFi | SES cameras, AI algorithms, and sensors to offer users a checkout-free experience. | A scalable, checkout-free system for retailers | Rolling out a pilot project in one large store at the end of 2018 | Aims to serve larger stores compared to Amazon Go | |
| Walmart/Microsoft | Uses machine learning, AI, and data platform solutions to develop technologies | Cashier-free, no-scan checkouts, and a system with cameras on shopping carts to track items | Microsoft has showcased the basics for automated checkout at its Retail Experience Center in Redmond | Walmart is collaborating with Microsoft | |
| BingoBox | The AI system includes image recognition, dynamic shelves, and AI background solutions | The first store was opened in China in June in 2017 | Even though BingoBox is also a no cashier store, it does not operate like Amazon Go, Trigo, or AiFi |
Amazon Go’s success and popularity has impacted the retail industry at a global level and inspired others to create their own checkout-free shopping experiences to provide customers a more convenient shopping experience, give their shop an advantage against competitors, and reduce operational costs. For example, 24-hour convenience stores in Japan are struggling with labour shortages, and the new tech can solve this problem. The UK’s Tesco, France’s Auchan and Spar in the Netherlands are also developing checkout-free store concepts.
From the companies’ perspectives, a cashier-free store can reduce labour costs and enable employees to focus on more important tasks. Even though checkout-free shopping remains in its early stages, this is almost certainly a trend we’ll be seeing more of in the near future.
Analyst: Paul Fan | Editor: Michael Sarazen
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