U.S. retailers large and small are pressing ahead with testing the use of artificial intelligence to track what products shoppers pick up and
to automatically bill their accounts when they walk out the door, eliminating the need for checkout lines.
The concept got a push from Amazon Go stores, which Amazon.com Inc. launched in early 2018; there are now 15 stores, with two opening last week, in New York and San Francisco. Amazon Go relies on hundreds of cameras and sensors in each store to identify products that customers take off the shelves. Shoppers typically scan a code to enter the stores.
Recent AI adopters include Sam’s Club Inc., the warehouse retailer owned by Walmart Inc., and Giant Eagle Inc., a regional chain of grocery and convenience stores. Giant Eagle said last month that it would test a technology similar to Amazon Go’s at a convenience store in Pittsburgh, where it is based. Several companies that sell cashierless technology—including Standard Cognition Inc. and Vcognition Technologies Inc., which does business as Zippin—said they are working with U.S. customers but declined to give details.
Sam’s Club plans to offer AI-powered cashierless shopping later this month at a 32,000-square-foot store in Dallas, a quarter of the size of its average store.
Currently, customers shop at the store by scanning barcodes on the products, an older cashierless-checkout technology. Once the AI system is in place, customers will use their smartphone cameras to scan the product itself. The cloud-based system, which uses computer vision and machine learning, recognizes products by matching them to a database of stored images. This is different from Amazon Go, where cameras installed in the stores do the work of scanning the products.
Customers at the Sam’s Club store can’t pay using cash at the register, as they can in certain Amazon Go stores.
A global survey of about 400 retailers conducted in June by research and advisory firm International Data Corp. found that 28% are testing or piloting cashierless systems, said Leslie Hand, vice president of IDC’s Retail Insights division. Ms. Hand said she knows of nearly 100 companies world-wide that are trying out the systems, adding she can’t discuss the details because of nondisclosure agreements.
“It’s awoken that fire for retailers to understand that really this is the future of retail and they need to invest in it,” Ms. Hand said.
Cashierless technology is being tested by U.K.-based Tesco PLC and France-based Carrefour SA . Tesco has said its method costs a tenth of systems used by its competitors, partly because it uses only cameras, not sensors.
Not every type of store is suited for cashierless technology. Walmart tried out a cashierless system based on scanning barcodes for about six months in more than 100 stores but discontinued it in April 2018. The technology proved impractical for pricing produce and other items that had to be taken to a cashier to be weighed, causing delays, a spokesman said.
Theft is also a concern. Manual scanning operates on an honor system and some customers don’t scan every item, often requiring stores to validate purchases, said Richard Crone, chief executive of Crone Consulting LLC, an advisory firm focused on retail, convenience and restaurant businesses. In the Sam’s Club trial, for example, an employee checks customer purchases as shoppers exit, though the clerk samples just one product per customer to see if it’s listed on the electronic receipt.
Still, the potential benefits include speed and convenience. Even small companies are testing the waters.
Choice Market Holdings LLC, which operates a Denver convenience store focused on fresh food, plans to open another location next month and is developing three others. It plans to introduce a cashierless system, using in-store cameras and sensors, in two of the planned stores next year, said Mike Fogarty, Choice Market’s founder and CEO.
The company is considering technology providers including AVA retail Inc. for the project.
“This technology will allow us to extend our hours with little to no labor, which leads to more transactions,” Mr. Fogarty said.
AVA retail CEO Atul Hirpara said his company’s system virtually eliminates retail fraud such as price-tag switching, shoplifting and “sweethearting” by checkout clerks who deliberately don’t charge a customer for a purchase.
Mr. Hirpara said planning, installing and deploying a typical system costs between $300,000 and $400,000 but the price could rise to $800,000 for a 2,000-square-foot store. Annual maintenance and service costs between $25,000 and $45,000, he said. He said the error rate is one or two per 1,000 purchases.
Mr. Fogarty said Choice Market expects its costs would be at the lower end of AVA’s estimates because the stores won’t be retrofitted but rather built with the technology integrated into the design.
Amazon Go’s, AVA’s and other cashierless systems don’t use facial recognition to identify customers. Instead, the systems track customers’ movements in the store and link to their online accounts. Sensors installed on store shelves augment the computer-vision systems by providing data on the weight of items lifted from shelves to help the AI count the number of items purchased.
Corrections & Amplifications
The Sam’s Club cashierless test store in Dallas doesn’t accept cash payments. An earlier version of this article said it would accept cash. Also, the store currently lets customers check out without a cashier by having them scan barcodes on products; it will introduce an artificial-intelligence system this month that will allow customers to use their smartphone cameras to scan the product itself. An earlier version of this article didn’t make it clear the store is already operating. Sam’s Club announced the AI-powered cashierless system in March. An earlier version of this article said it was in July. (Aug. 12, 2019)
DENVER — Choice Market will be the latest convenience store retailer to enter the autonomous checkout space with the opening of its third location.
The new, 2,700-square-foot format will open during the second half of 2019 at 2200 East Colfax and feature fuel pumps, electric vehicle supercharging, a bike share terminal, electric scooter charging stations and solar collection on the canopy.
It will also offer autonomous checkout, order and pay ahead via the Choice mobile app and traditional checkout.
"There's nothing more valuable than our customer's time and we are really excited to offer this new format which allows them to combine several different shopping occasions in one stop, while providing them the option to skip the checkout process all together," said Mike Fogarty, founder and CEO of Choice Market. "If customers cannot make it to the store, we will deliver any of our products to their doorstep within 45 minutes. That is true convenience."
Fogarty was a featured speaker at the 2018 Convenience Store News Convenience Foodservice Exchange in September.
To enable the autonomous checkout, Choice partnered with Ava Retail, which uses artificial intelligence, computer vision and internet of things to track customer's purchases within the store. This platform uses less hardware and infrastructure than other competitors while still leveraging the powerful Microsoft Azure cloud, according to the company.
"Real convenience is what Choice Market is doing using our technology — offering their customers a truly automated experience," said Ava Retail CEO Atul Hirpara. "Retail is undergoing a major transformation. With the power of Ava's technology, Choice Market is pioneering this transformation."
Choice currently has one location open in downtown Denver. A second store, which is under construction, is set to open in the second 2019 in south Denver. With the upcoming changes to liquor laws, Choice will also be one of the first companies in Colorado to offer delivery of prepared foods, groceries, and full strength beer in one transaction, according to the company.
To facilitate the company's growth, the company hired industry veteran John Varsames as its chief operating officer. Varsames has more than 30 years of experience with opening and operating natural groceries, including leadership positions at Wild Oats, Whole Foods and Alfalfas.
"I am thrilled to be joining the Choice Market team to help lead business operations and grow this exciting brand," Varsames said. "Healthy convenience is a fast-growing segment and our innovative approach will be a great addition to Colfax."
"We're honored to partner with Choice Market to create a fresh, new concept at the intersection of healthy living and convenience. Chute Gerdeman and Choice Market share similar brand values — belief in doing good for the people and communities that we serve," said Chute Gerdeman CEO Brian Shafley.
"As creators of brand experience and customer engagement, we look forward to our collaboration with this future-looking brand partner, and are confident our work together will further propel the mission of Choice Market," he added.
For this project, Choice has partnered with local developer St. Charles Town Co., which has a history of adaptive reuse and urban revitalization in the Denver area.
"A contemporary, fresh, and local market will fill a huge void in this dense part of the city. It has been nearly two decades since we had Wild Oats next door to this site," said Charlie Woolley, principal at St. Charles Town Co. "We are pleased to partner with Choice to bring fresh food and innovation to the neighborhood."
Denver-based Choice Market combines the operating hours, store size and transaction times of a traditional convenience store with the product selection of a natural grocery and fast casual restaurant.
Lowe’s is testing augmented reality and virtual reality tools it says helps customers visualize and “feel” a large home improvement product in the context of the customer’s living space.
“We look at age-old customer problems,” said Josh Shabtai, Lowe’s director of lab productions at Lowe’s Innovation Labs. “These are problems that keep resurfacing that folks haven’t solved yet. Our hypothesis is that as we move people closer to realizing their visions, they’ll feel more confident.”
Lowe’s Innovation Labs, with offices in Kirkland, Washington, Mooresville, North Carolina and Bangalore, India, were established four years ago to delve deeper into these questions, said Shabtai. Often working with startups, the company has since rolled out several pilot projects to test customers’ comfort with virtual and augmented reality, including Holoroom How-To, which immerses a customer in a DIY project – such as tiling a shower – and gives them step-by-step instruction to complete the task; employee training programs that involve virtual reality; Holoroom Test Drive, a feature that uses VR to offer customers a chance to sense the feeling they are actually holding and using a power tool; and “View in Your Space,” a mobile app feature which lets customers visualize how a piece of furniture may fit within the physical dimensions of their own living spaces. Of these pilots, two currently are still in market, including Holoroom Test Drive in Charlotte and the AR feature which went live for Android users in March.
While quick turnaround trials may suggest there are challenges getting customers to comfortably use the technology on a regular basis, Shabtai said the timing is part of Lowe’s approach to test new use cases, study the outcomes, and apply the lessons to future releases. Other retailers are also jumping on the VR/AR bandwagon, including Home Depot and Walmart.
“We’re trying to refine the experience and move on to an application that will be better and ready to scale,” Shabtai said.
Shabtai said early results are showing that VR-and AR-enabled tools offer two key use cases: helping customers better navigate how they’ll use tools or whether products are physically compatible with their homes; and helping employees learn more quickly to offer more personalized expertise, and ultimately, add more value to the in-store experience.
“When [customers] come into a Lowe’s store, they want to talk to an employee who is a real expert in the space,” said Shabtai. According to company proprietary data, employees who are trained on machinery using VR are 76 percent more likely to try out a piece of machinery compared to those who were trained using conventional methods; and customers have 42 percent greater recall with VR tools compared to YouTube how-to videos.
He conceded that the biggest challenge standing in the way of more mainstream adoption is cost, while AR can be more quickly deployed given the ubiquity of smartphones that are already equipped with enabling technology. Retailers’ advantage — particularly those whose core product offerings are big-ticket home appliances — is to tie the customer closer to the brand through these types of immersive efforts. Tactile experiences through virtual and augmented reality ways legacy retailers can keep customers loyal, especially with competition from Amazon.
“Amazon wins on convenience and selection, so how can retailers combat that?” said Jim Cusson, president of retail marketing agency Theory House.”A lot of this has to do with the experience and brand engagement [derived from immersive tools like VR and AR].” Morningstar analyst Jaime Katz wrote in a recent report that Lowes’ business model is built off of customer service, knowledge, and innovation; using VR and AR could help augment its reach.
Despite larger retailers’ shift to AR and VR as differentiators, there’s a risk customers may preview items within the VR and AR interfaces and simply buy them on Amazon, so retailers like Lowe’s need to focus on those customers whose core goal is the pride they derive from carrying out hands-on home improvement projects. These customers aren’t necessarily motivated by price, said Atul Hirpara, CEO of AVA Retail.
“DIY shoppers enjoy visiting stores and build things that make them proud,” he said. “It’s not necessarily about money; what AR can do is augment their imaginations.”
Amazon dominated the headlines this week with its annual July holiday. But I, for one, did not give it much notice. It has become de rigueur for Amazon. In fact, whatever hiccups Amazon did encounter this week will only make it stronger in the long run and possibly better prepare Amazon for what I fear more than anything else in the world—a last-minute preemptive Prime Day a week or two before Black Friday somewhere down the line. Such a move would be the Death Star, planet-destroying blow to traditional holiday retail. Even a minuscule 0.000001% chance of this happening frightens the hell out of me.
So, until then, July is just an amuse-bouche and not a time to get overwhelmed with Amazon-related Prime Day shenanigans. It is far more important to keep one's eyes on the prize each week, to look past Prime Day, and to maintain focus on who (and who is not) planning ahead for the future and going after the next great innovation in retail—the personalized physical store—so as not to be left in a cloud (pun intended, as you will see) of dust ten years down the road.
The most important news of this past week was therefore not Prime Day, but Walmart's clear decision to throw its hat into the next-generation retail ring with its new long-term partnership with Microsoft.
Just as e-commerce debuted in the late 1990s, nearly 30 to 40 years after the last large-scale innovation in retail, quite soon a new technological operating system for retail will also emerge on the same time trajectory, sometime between 2020 and 2030. The race is on to see who cracks the code first and who then benefits from selling this system to the countless other retailers that could never develop something so advanced on their own.
Sound familiar? It should. It is the same mousetrap Amazon laid with its e-commerce browser at the turn of the century, when Amazon powered many retailers' e-commerce businesses. No one should be surprised that Amazon is at it again and that Alibaba is thinking the same way.
Enter Walmart.
Walmart smartly realizes that it cannot lay dormant while Amazon and Alibaba chase this Holy Grail, which is why the announcement of its partnership with Microsoft this week was so important.
Walmart inked a partnership with Microsoft for a five-year, full-suite cloud deal. According to Retail Dive, Walmart will "capitalize on Microsoft's artificial intelligence, machine learning and data solutions for cloud innovation projects, including building out its global IoT platform on Azure."
Effectively this statement means that the deal could begin to give Walmart the three legs to the stool it needs to compete effectively in the world of next-generation retail: cloud commerce, mobile applications and location analytics (aka the Holy Trinity).
The intersection of these three technological capabilities is what will give retailers an unprecedented level of data capture within a physical retail store. It is what will turn physical stores into the analytical equivalents of e-commerce browsers. It is what will enhance not only the science of physical retailing, but the artistic expression of it as well.
Harnessing these three technologies will give retailers, all things being equal, an almost regression-like understanding of the value or impact in real-time of every action and reaction within a store, meaning physical experiences will be able to be tailored uniquely to each individual who decides to enter a retailer's four walls.
The days of a "mass" experience will be over. Every experience from one individual to the next will be different.
Microsoft is a strong partner to help Walmart pull something off within this realm. Microsoft's Azure cloud services give Walmart the speed, scale and security to process the data required in real-time; Microsoft's stable of mobile application partners, often on display annually in Microsoft's booth at NRF, is incredibly formidable; Microsoft's recently announced Partner of the Year, AVA retail .AI , also happens to specialize in location analytics and visual recognition technology, which, for those scoring at home, happens to be similar to the components within Amazon's Go concept; and Microsoft, unlike other cloud providers not named Amazon, actually runs its own stores.
Everything within this potential partnership just passes the smell test.
But keep in mind, Walmart is only through mile one of the next-generation retail marathon.
While partnering with Microsoft is the right move by Walmart, Walmart's next-generation life will only take shape once the company pushes itself to the edge of its current comfort zone. Amazon and Alibaba likely both have a leg up in the race because of their lack of existing physical retail operational, technological, architectural and cultural debt, so Walmart will, in many ways, have to work harder than the next guy.
The greatest barriers to entry for new retailers are physical stores themselves. Physical stores are expensive for upstarts to build. What matters, then, is not so much the Walmart stores that people know today, but the Walmart stores that people will know 10 to 20 years from now.
Future Walmart stores will need to look vastly different, regardless of how ready the Baby Boomers and Generation X are for the eventual transformation. Transforming Walmart stores for future generations will require thinking similar to how Apple designs its products. Just as Apple removes features that customers love in nearly every new product release—things like disk drives, earphone jacks, etc.—so too must current aspects of Walmart's business go away in the aim of long-term generational progress.
Will Walmart have the grit and determination to keep at it?
Yes.
Doug McMillon has thus far shown that he is the right man for the job. The partnership with Microsoft signals that he is taking the right approach and will not go down without a fight. While many retailers find themselves in a position unable to fight or are even happy treading water in the hopes of riding out what is, in reality, an insurmountable storm, McMillon appears to be willing to make the tough choices required to move Walmart forward.
McMillon appears to be playing the long game—selling off assets to sharpen the company's focus (Asda), bringing in new talent and perspectives (Marc Lore, Valerie Casey and others), focusing more on R&D (Store No. 8), and finding the right partners that could be essential to survival (Microsoft).
2019 could be the watershed year for McMillon and for Walmart. It could be the year that the seeds of his hard work, firmly planted in the ground, take root, begin to sprout and give the public a glimpse of Walmart's own Amazon- and Alibaba-like vision of what the future could be.
Until now, the public has seen only small, incremental tidbits of what Walmart's store of the future could look like, but this new partnership with Microsoft likely portends that there is far more on the horizon, that Walmart too will dream the American dream of entrepreneurship and do all that it can to lead retail through the next great innovation cycle in retail.
The clock is ticking. Now is not the time to follow. Now is the time to lead. America needs Walmart to do exactly what it appears to be doing.
AVA retail, utilizing the “internet of things” has created a smooth, quick and easy solution that transforms store visits for the customer and the retailer. Our frictionless experience allows the customer to check in, shop and automatically check out without ever having to stand in line.
Once a customer enters the store, checks in via the AVA SmoothShop app, (or through the retailer’s app) AVA SmoothShop does the rest. Our system validates every item selected and holds them in our SmoothShop Cart, intelligently removing any products that may have been placed back on the shelf. Once the customer has left they instantly receive a confirmation and receipt on their smartphone. It’s that easy! AVA SmoothShop enables friction free, self-checkout!
AVA SmoothShop puts the customer first, offering a convenient and time saving option for shopping on the go.
Microsoft is testing technology that will track what items people pick up while shopping, and another Redmond company is working with Microsoft on the technology for physical stores, news services reported.
Microsoft may be gearing up to challenge Amazon on its home turf — the world of retail shopping — by developing cashier-less technology for grocery stores.
Six people told Reuters news service that the Redmond software company is testing technology that will track what items people pick up while shopping, something that could eliminate or reduce the need for cashiers.
Redmond-based AVA Retail, which develops technology to collect data about shoppers in stores, also told The Associated Press it is working with Microsoft on the technology for physical stores.
Amazon’s convenience store that uses cashier-less technology, Amazon Go, opened to the public in Seattle in January.
That store requires shoppers to swipe an app when they walk in, then uses computer-vision technology to track them and their purchases around the store. When people are done shopping, they can walk out and are charged through the Amazon app.
Amazon could sell that technology to other retailers. But a competing technology from Microsoft could be an attractive option because retailers might see Microsoft as less of a competitive threat than Amazon.
A Microsoft spokeswoman declined to comment.
Microsoft’s interest in the technology is hardly a secret. Microsoft for years has operated a Retail Experience Center from a nondescript building near its Redmond headquarters campus, meant as a showcase for Microsoft products as well as an experimental environment for the company’s business-sales groups to try out emerging technologies and show them to potential customers.
During a media tour in 2015, Microsoft showed how a big-box electronics store could keep track of where customers were and what items they were looking at or picking up by using technology borrowed from Microsoft’s Kinect motion sensor.
A tour of the same Microsoft retail facility in 2016 showed Bluetooth beacons that could track customers’ movement, Redmond Magazine reported. At the time, the company was partnering with AVA Retail to pinpoint what a shopper was reaching for on a shelf.
AVA Retail CEO Atul Hirpara said Thursday that the company is using Microsoft’s Azure cloud to develop technology that will enable stores to have a clerk-less checkout experience. AVA’s technology could roll out in the next six to eight months, he said.
The company plans to co-sell the product with Microsoft, but the clerkless techology is owned by AVA, Hirpara said.
Reuters reported that Microsoft’s technology could be getting closer to deploying in stores. Microsoft could be in talks with Amazon rival Walmart, Reuters’ sources said.
AVA’s Hirpara declined to disclose if his company has any ongoing talks with Walmart.
Microsoft is working on automated checkout technology that could help retailers compete with Amazon’s new cashier-less stores.
One firm building automated checkout systems, Ava Retail, said Thursday it is working with Microsoft on the technology for physical stores. Both companies have headquarters in Redmond, Washington.
Ava Retail CEO Atul Hirpara said Microsoft could become a leader in the field because it has a strong cloud computing platform. That technology would power the retail system by pulling in data from in-store cameras or sensors.
Microsoft's interest in working with retailers on similar technology was reported earlier by Reuters. It remains unclear how far along Microsoft is in the project. The report of its involvement didn't surprise others in the fast-growing automated checkout industry.
Michael Suswal, co-founder of San Francisco-based startup Standard Cognition, said Microsoft has the teams capable of developing the software and the infrastructure needed to deploy it broadly.
Suswal said his firm is also working with retailers — but not currently with Microsoft — on its own automated checkout system using overhead cameras.
"Within five years, everyone in the country will have visited an autonomous checkout store," Suswal said.
Microsoft is working on automated checkout technology that could help retailers compete with Amazon’s new cashier-less stores.
One firm building automated checkout systems, Ava Retail, said Thursday it is working with Microsoft on the technology for physical stores. Both companies have headquarters in Redmond, Washington.
Ava Retail CEO Atul Hirpara said Microsoft could become a leader in the field because it has a strong cloud computing platform. That technology would power the retail system by pulling in data from in-store cameras or sensors.
Amazon opened its first cashier-less Amazon Go store in Seattle this year and plans more locations in Chicago and San Francisco. Overhead cameras and other technology help keep track of customers and what they're buying.
Microsoft’s interest in working with retailers on similar technology was reported earlier by Reuters. It remains unclear how far along Microsoft is in the project. The report of its involvement didn’t surprise others in the fast-growing automated checkout industry.
Michael Suswal, co-founder of San Francisco-based startup Standard Cognition, said Microsoft has the teams capable of developing the software and the infrastructure needed to deploy it broadly.
Suswal said his firm is also working with retailers — but not currently with Microsoft — on its own automated checkout system using overhead cameras.
“Within five years, everyone in the country will have visited an autonomous checkout store,” Suswal said.
Microsoft is working on automated checkout technology that could help retailers compete with Amazon’s new cashier-less stores.
One firm building automated checkout systems, Ava Retail, said Thursday it is working with Microsoft on the technology for physical stores. Both companies have headquarters in Redmond, Washington.
Ava Retail CEO Atul Hirpara said Microsoft could become a leader in the field because it has a strong cloud computing platform. That technology would power the retail system by pulling in data from in-store cameras or sensors.
Amazon opened its first cashier-less Amazon Go store in Seattle this year and plans more locations in Chicago and San Francisco. Overhead cameras and other technology help keep track of customers and what they’re buying.
Microsoft’s interest in working with retailers on similar technology was reported earlier by Reuters. It remains unclear how far along Microsoft is in the project. The report of its involvement didn’t surprise others in the fast-growing automated checkout industry.
Michael Suswal, co-founder of San Francisco-based startup Standard Cognition, said Microsoft has the teams capable of developing the software and the infrastructure needed to deploy it broadly.
Suswal said his firm is also working with retailers — but not currently with Microsoft — on its own automated checkout system using overhead cameras.
“Within five years, everyone in the country will have visited an autonomous checkout store,” Suswal said.
SAN FRANCISCO (Reuters) - Microsoft Corp (MSFT.O) is working on technology that would eliminate cashiers and checkout lines from stores, in a nascent challenge to Amazon.com Inc’s (AMZN.O) automated grocery shop, six people familiar with the matter told Reuters.
The Redmond, Wash.-based software giant is developing systems that track what shoppers add to their carts, the people say. Microsoft has shown sample technology to retailers from around the world and has had talks with Walmart Inc (WMT.N) about a potential collaboration, three of the people said.
Microsoft’s technology aims to help retailers keep pace with Amazon Go, a highly automated store that opened to the public in Seattle in January. Amazon customers scan their smartphones at a turnstile to enter. Cameras and sensors identify what they remove from the shelves. When customers are finished shopping, they simply leave the store and Amazon bills their credit cards on file.
Amazon Go, which will soon open in Chicago and San Francisco, has sent rivals scrambling to prepare for yet another disruption by the world’s biggest online retailer. Some have tested programs where customers scan and bag each item as they shop, with mixed results.
For Microsoft, becoming a strategic ally to retailers has meant big business. In addition to developing retail technologies, it ranks No. 2 behind Amazon in selling cloud services that are key to running e-commerce sites, for instance.
It is not clear how soon Microsoft would bring an automated checkout service to market, if at all, or whether its technology would be the answer retailers are looking for. But some see the technology as the next big innovation in shopping, one that Amazon’s competitors cannot afford to ignore.
“This is the future of checking out for convenience and grocery stores,” said Gene Munster, head of research at Loup Ventures in Minneapolis. The venture capital firm estimates the U.S. market for automated checkout is worth $50 billion. Cashier is one of the most commonly held jobs in the United States.
Microsoft said it “does not comment on rumors or speculation.” Walmart and Amazon declined to comment.
● EXPENSIVE EQUIPMENT
Microsoft’s effort to date has largely fallen under its Business AI, or artificial intelligence, team, one person said. A group consisting of 10 to 15 people has worked on a host of retail store technologies, and they have presented some of their efforts in front of CEO Satya Nadella, the person said.
In a meeting with the team several months ago, Nadella recommended an “intelligent edge” device that could manage connected gadgets such as cameras on site with minimum data transfers to the cloud, which would cut down on costs, said the person.
Making its technology cheap enough so it does not eviscerate grocers’ already thin profit margins is a major challenge for Microsoft, another person said.
Microsoft already showcases the basics for automated checkout at its Retail Experience Center in Redmond. It has half a dozen partners, including Redmond-based AVA Retail, that are building their own checkout-free or related services atop Microsoft’s cloud, some of the people said. Sales of partners’ services result in cloud revenue for Microsoft, along with insight into the market for new retail technologies.
Meanwhile, Microsoft’s internal team, including a computer vision specialist hired from Amazon Go, has worked on attaching cameras to shopping carts to track customers’ items. And it has studied novel ways for smartphones to play a role in the shopping experience, people said. Still, the industry is playing catch-up to Amazon.
The company spent four years building Amazon Go in secret, before launching an employee-only pilot on its Seattle campus in 2016. It collected data for nearly 14 months more before opening the doors to its first Seattle store. Amazon has said it has no plans to introduce checkout-free technology to its Whole Foods Market grocery chain, which it acquired last year.
The company is still hard at work improving the service. Amazon Vice President Dilip Kumar told Reuters in an interview earlier this year that the company is training computers to identify items or activities with as little information as possible. “It’s a really hard problem,” said Scott Jacobson, managing director of Madrona Venture Group, adding it’s “one that Amazon is uniquely positioned to solve.”
• Microsoft is reportedly working on technology that would eliminate cashiers and checkout lines from stores, in an early challenge to Amazon's automated grocery shop, Amazon Go.
• Microsoft has shown sample technology to retailers from around the world and has had talks with Walmart about a potential collaboration, according to sources.
• Amazon Go, which will soon open in Chicago and San Francisco, has sent rivals scrambling to prepare for yet another disruption by the world's biggest online retailer.
• Microsoft said it "does not comment on rumors or speculation." Walmart and Amazon declined to comment.
SAN FRANCISCO (Reuters) - Microsoft is working on technology that would eliminate cashiers and checkout lines from stores, in a nascent challenge to Amazon's automated grocery shop, six people familiar with the matter told Reuters.
The Redmond, Washington-based software giant is developing systems that track what shoppers add to their carts, the people say. Microsoft has shown sample technology to retailers from around the world and has had talks with Walmart about a potential collaboration, three of the people said.
Microsoft's technology aims to help retailers keep pace with Amazon Go, a highly automated store that opened to the public in Seattle in January. Amazon customers scan their smartphones at a turnstile to enter. Cameras and sensors identify what they remove from the shelves. When customers are finished shopping, they simply leave the store and Amazon bills their credit cards on file.
Amazon Go, which will soon open in Chicago and San Francisco, has sent rivals scrambling to prepare for yet another disruption by the world's biggest online retailer. Some have tested programs where customers scan and bag each item as they shop, with mixed results.
For Microsoft, becoming a strategic ally to retailers has meant big business. In addition to developing retail technologies, it ranks No. 2 behind Amazon in selling cloud services that are key to running e-commerce sites, for instance.
It is not clear how soon Microsoft would bring an automated checkout service to market, if at all, or whether its technology would be the answer retailers are looking for. But some see the technology as the next big innovation in shopping, one that Amazon's competitors cannot afford to ignore.
"This is the future of checking out for convenience and grocery stores," said Gene Munster, head of research at Loup Ventures in Minneapolis. The venture capital firm estimates the U.S. market for automated checkout is worth $50 billion. Cashier is one of the most commonly held jobs in the United States.
Microsoft said it "does not comment on rumors or speculation." Walmart and Amazon declined to comment.
● Expensive equipment
Microsoft's effort to date has largely fallen under its Business AI, or artificial intelligence, team, one person said. A group consisting of 10 to 15 people has worked on a host of retail store technologies, and they have presented some of their efforts in front of CEO Satya Nadella, the person said.
In a meeting with the team several months ago, Nadella recommended an "intelligent edge" device that could manage connected gadgets such as cameras on site with minimum data transfers to the cloud, which would cut down on costs, said the person.
Making its technology cheap enough so it does not eviscerate grocers' already thin profit margins is a major challenge for Microsoft, another person said.
Microsoft already showcases the basics for automated checkout at its Retail Experience Center in Redmond.
It has half a dozen partners, including Redmond-based AVA Retail, that are building their own checkout-free or related services atop Microsoft's cloud, some of the people said. Sales of partners' services result in cloud revenue for Microsoft, along with insight into the market for new retail technologies.
Meanwhile, Microsoft's internal team, including a computer vision specialist hired from Amazon Go, has worked on attaching cameras to shopping carts to track customers' items. And it has studied novel ways for smartphones to play a role in the shopping experience, people said.
Still, the industry is playing catch-up to Amazon.
The company spent four years building Amazon Go in secret, before launching an employee-only pilot on its Seattle campus in 2016. It collected data for nearly 14 months more before opening the doors to its first Seattle store. Amazon has said it has no plans to introduce checkout-free technology to its Whole Foods Market grocery chain, which it acquired last year.
The company is still hard at work improving the service. Amazon Vice President Dilip Kumar told Reuters in an interview earlier this year that the company is training computers to identify items or activities with as little information as possible.
"It's a really hard problem," said Scott Jacobson, managing director of Madrona Venture Group, adding it's "one that Amazon is uniquely positioned to solve."
• Microsoft is working on technology that would eliminate cashiers and checkout lines from stores.
• It would be a nascent challenge to Amazon.com's automated grocery shop.
• The Redmond, Washington-based software giant is developing systems that track what shoppers add to their carts.
Microsoft is working on technology that would eliminate cashiers and checkout lines from stores, in a nascent challenge to Amazon.com's automated grocery shop, six people familiar with the matter told Reuters.
The Redmond, Washington-based software giant is developing systems that track what shoppers add to their carts, the people say. Microsoft has shown sample technology to retailers from around the world and has had talks with Walmart about a potential collaboration, three of the people said.
Microsoft's technology aims to help retailers keep pace with Amazon Go, a highly automated store that opened to the public in Seattle in January. Amazon customers scan their smartphones at a turnstile to enter. Cameras and sensors identify what they remove from the shelves. When customers are finished shopping, they simply leave the store and Amazon bills their credit cards on file.
Amazon Go, which will soon open in Chicago and San Francisco, has sent rivals scrambling to prepare for yet another disruption by the world's biggest online retailer. Some have tested programs where customers scan and bag each item as they shop, with mixed results.
For Microsoft, becoming a strategic ally to retailers has meant big business. In addition to developing retail technologies, it ranks No. 2 behind Amazon in selling cloud services that are key to running e-commerce sites, for instance.
It is not clear how soon Microsoft would bring an automated checkout service to market, if at all, or whether its technology would be the answer retailers are looking for. But some see the technology as the next big innovation in shopping, one that Amazon's competitors cannot afford to ignore.
"This is the future of checking out for convenience and grocery stores," said Gene Munster, head of research at Loup Ventures in Minneapolis. The venture capital firm estimates the U.S. market for automated checkout is worth $50 billion. Cashier is one of the most commonly held jobs in the United States.
Microsoft said it "does not comment on rumors or speculation." Walmart and Amazon declined to comment.
● Expensive equipment
Microsoft's effort to date has largely fallen under its Business A.I., or artificial intelligence, team, one person said. A group consisting of 10 to 15 people has worked on a host of retail store technologies, and they have presented some of their efforts in front of CEO Satya Nadella, the person said.
In a meeting with the team several months ago, Nadella recommended an "intelligent edge" device that could manage connected gadgets such as cameras on site with minimum data transfers to the cloud, which would cut down on costs, said the person.
Making its technology cheap enough so it does not eviscerate grocers' already thin profit margins is a major challenge for Microsoft, another person said.
Microsoft already showcases the basics for automated checkout at its Retail Experience Center in Redmond.
It has half a dozen partners, including Redmond-based AVA Retail, that are building their own checkout-free or related services atop Microsoft’s cloud, some of the people said. Sales of partners’ services result in cloud revenue for Microsoft, along with insight into the market for new retail technologies.
Meanwhile, Microsoft's internal team, including a computer vision specialist hired from Amazon Go, has worked on attaching cameras to shopping carts to track customers' items. And it has studied novel ways for smartphones to play a role in the shopping experience, people said.
Still, the industry is playing catch-up to Amazon.
The company spent four years building Amazon Go in secret, before launching an employee-only pilot on its Seattle campus in 2016. It collected data for nearly 14 months more before opening the doors to its first Seattle store. Amazon has said it has no plans to introduce checkout-free technology to its Whole Foods Market grocery chain, which it acquired last year.
The company is still hard at work improving the service. Amazon Vice President Dilip Kumar told Reuters in an interview earlier this year that the company is training computers to identify items or activities with as little information as possible.
"It's a really hard problem," said Scott Jacobson, managing director of Madrona Venture Group, adding it's "one that Amazon is uniquely positioned to solve."
While the walk-out-to-pay system that Amazon Go locations are putting to work has captured imaginations for over a decade now, it’s also fairly clear that such a system won’t work for every business. The good news is that this super-mobile payments system will likely work in at least some places, and we know this because there are some who have put it, or something like it, to work.
One of the biggest problems involved in putting in an Amazon Go system is that the hardware involved represents a massive investment. It’s not that retailers aren’t interested, it’s that they straight-up can’t afford to make the kind of investment a company that can run at a loss for years can afford to. That’s actually led other companies to try something similar, like AVA Retail. It’s building what’s called a “closed-loop invisible payments system” any retailer can put in play.
The AVA Retail system is built around a combination of artificial intelligence and computer vision, a combination which can actually be executed in several different ways. One store could ask shoppers to check in with their mobile devices at tapping points or scanning points, and another could use a different approach depending on the individual store’s needs. AVA Retail’s system requires registration with an app called SmoothShop, but thankfully, that’s just a one-time registration.
This raises interesting questions. How can Amazon respond to this? It’s going to be a tough row to hoe, telling retailers “You need this much more expensive system that does the exact same thing this one that costs half as much does because…um…reasons?” Amazon may be able to push its name recognition—why go with some back-alley system when you can have Amazon—but name recognition can only go so far when the choice is between “unaffordable” and “affordable.” It only gets worse when you consider the AVA Retail system can be custom-tailored to each individual shop.
This isn’t good news for Amazon, but it may be great news for its competitors. Since neither system is in wide use yet, there’s a lot of time for things to change. If Amazon can make its system more affordable, it might well win out. If not, competition is waiting to do what Amazon can’t or won’t.
There could be so much more to a cashier-less checkout experience — and for so much less than what Amazon is spending to do it at its bespoke Amazon Go convenience and grocery stores. That’s not to say Amazon Go is a bad system; it just won’t work for every merchant.
As Amazon Go has demonstrated, walking out the door to pay may be the ultimate in terms of a seamless checkout experience. Customers at the eCommerce giant’s brick-and-mortar mini-mart simply go around the store adding the items they need to their shopping cart, then leave the store — triggering an invisible payment to initiate using their Amazon account.
One of the main problems with Amazon’s technology, however, is that creating the experience requires heavy investments in hardware that not every retailer can afford to make.
That’s why other tech companies are cropping up with the means to build a cashier-less checkout experience for the rest of the world. The CEO of one such company, Atul Hirpara of AVA Retail, told PYMNTS how it’s providing a closed-loop invisible payments system that any retailer can adopt.
● SmoothShop Sailing
Hirpara said there are a few iterations of how the technology could be deployed, depending on the needs of the store. The one thing that remains the same is that a combination of computer vision and artificial intelligence must be combined with the mobile app for the solution to work.
Some stores may ask customers to check in when they arrive by tapping their phone or scanning it at a turnstile. After that, said Hirpara, the phone can go back in the pocket or purse, its job complete. The battery could die and the customer could still complete her shopping trip, including the digital payment at the end, because the computer vision hardware at the store is keeping tabs on her activity and will trigger a payment from her registered account when it detects her leaving the store.
The payment happens invisibly, and a digital itemized receipt is sent to the user’s phone within 15 seconds of leaving the store.
AVA Retail encrypts all payment data, he added, so the actual information persists only on the user’s phone — anything within the company’s system is garbled via tokenization so that, even if a malicious actor got a hold of it, he would be unable to pair it with the correct customer’s identifying credentials.
● One App, Many Stores
Initially, customers must sign up and enter their payment information into the SmoothShop app — but that’s just a one-time friction point, said Hirpara. Once they’ve done so, they can use the app to enter, shop and pay at any store that’s implemented it.
While stores can, to an extent, white-label the app so it suits their brand, Hirpara explained that it’s important to house all stores within one app rather than requiring users to download and register for multiple apps at each store where they shop. Separating stores into bespoke apps would create friction rather than resolving it.
He said that’s even more true for stores that customers may only visit once or twice a year, such as a toy store where a customer buys a Christmas and birthday present for a niece or nephew.
● Philosophy
Hirpara said AVA Retail’s goal is to bring the checkout-free retail experience to a wide range of merchants including convenience stores, toy stores, and quick-service restaurants (QSRs) that have five to 10 locations.
He added that the tech is ready to scale and grow with merchants, but the reason for focusing on small- to medium-sized businesses (SMBs) is to help them keep up with bigger competitors, especially the ultimate competitor: eCommerce.
It’s not easy for SMBs to pay enough cashiers, as the bar keeps rising on minimum wage. Hirpara said that automating checkout can minimize the need for clerks, enabling stores to keep a smaller contingency of employees that are able to focus on helping customers as they need it around the store.
● Differentiation
It’s too early to say whether any checkout-free technology is better than another, but Hirpara said there are a few things that AVA Retail has been deliberate about approaching differently, which he believes can help the platform gain traction on a wider scale.
First, SmoothShop requires less hardware than Amazon Go, making it more affordable (and less of a headache) for SMBs to deploy.
Second, the speed of receipt delivery creates peace of mind almost as soon as the customer leaves the store. Amazon Go can take longer to deliver a receipt, which Hirpara feels can leave the customer anxious about whether he was charged the right amount.
Third and finally, every retailer is different, so each one will need to tailor its checkout-free experience to suit its brands and what it knows about its customer base. Hirpara said that’s why a DIY approach is beneficial. It enables retailers to pick and choose the parts they need and grow the system with them.
For some retailers, waiting in line may not be the biggest point of friction. Or, perhaps what’s needed is more of an in-store enhancement by which customers could tap products with their phone to learn more and share those products with friends.
Any solution that hopes to succeed must fine-tune itself to the nitty gritty of individual businesses, Hirpara said. Retailers must take the time to understand their unique frictions and customer journeys. Only then can they decide which solution is right for them.
AVA retail wants you to know that Amazon Go isn’t the only seamless checkout experience in town.
Though Amazon Go has been grabbing all the headlines, AVA retail—an Internet of Things (IoT) and artificial intelligence-driven retail solutions company—has been quietly working on its own cashier-less checkout experience and formally launched as a multi-solutions company at Shoptalk this week.
Some of the panic over the so-called “retail apocalypse” is prompting many retailers to invest in brick-and-mortar digital transformations, which Grandview Research estimates could drive annual expenditures of $20 billion.
AVA retail brings together top players in tech and fintech, including Microsoft Azure IoT and Mastercard, from which it’s leveraging cashierless technology. According to the company’s CEO, AVA retail wants to bring a more data-driven, consumer-friendly approach to the in-store shopping journey.
“We asked ourselves, ‘Why can’t a retailer better understand shoppers as they travel through the store and interact with products? Why can’t they track dwell time and paths? Why can’t they deliver insights and predictions in real time?’” Atul Hirpara, AVA retail CEO, said.
“With AVA retail they can leverage IoT sensors to digitally transform physical retail locations, creating digital footprints of in-store shoppers, store associates and store inventory that was not available before. AVA retail then converts this data into insights through its Analytics dashboard, empowering retailers and CPG companies to create better shopper experiences, drive staffing efficiency, and higher sales conversion,” Hirpara added. “Taking our AVA Experiences to the next level of truly frictionless shopping was not a huge step for us.”
AVA offers three products: AVA Analytics, which helps retailer conduct A/B testing, generate heat map, perform funnel analysis and more; AVA Experiences, itself a product portfolio comprising mobile apps, smart shelving and displays; and AVA SmoothShop, the cashier-less checkout experience.
According to AVA retail, consumers don’t need a special app or to walk through a turnstile upon entering to shop in a participating SmoothShop store, although retailers can chose those options if they prefer. AVA retail’s solution employ a SaaS model to keep costs affordable for retailers, and the SmoothShop experience relies on computer vision, sensor fusion, machine learning and artificial intelligence to create the seamless customer checkout. Upon completing their transaction, shoppers immediately receive a receipt so they can keep tabs on how much they’ve spent.
In partnering with companies including a major coffee chain, office supply store, superstore and others, AVA retail has tallied in excess of 30 million customer journeys, more than 750 million product interactions at the shelf level, and greater than 20 million checkouts cross four continents.
I was recently invited to Microsoft’s campus to see the cool things they have been up to and one of the highlights was visiting the Microsoft Retail Experience Center. This was an on-premise environment that replicated various retailers and showcased cool technologies that retailers – big and small – could use to amp-up their business, supported by Azure.
Some of the highlights:
● NFC-enabled coaster that by putting it down on your table could enable your server to know that you needed another beer.
● Opt-in beacon technology that allows you to place your coffee order as you near the coffee shop and have it ready and waiting for you when you arrive.
● Digital projection onto the counter, allowing the barista to place your cup in a specifically labeled virtual circle so you know which coffee is yours, no scribble-interpreting needed.
● Opt-in tech that lets retailers track existing customers that are part of their loyalty program in the store, so they know what to recommend and upsell them, based on their location and purchase history.
● Video screens with FaceCake software that let you try on makeup, clothing and accessories “virtually,” see what you look like and even view side-by-side comparisons of different looks right at the point of purchase.
● Tablets that dock for security (so they don’t walk out the door) but disconnect so that sales associates can demonstrate product features to the customers in the store.
● Vending machines, enabled with both interactive information about the product (like nutritional information) and a camera that scans you, analyzes data and tailors suggestions based on demographic information.
● RFID tags on clothing that project information onto your fitting-room screening wall and also allow you to instantly request a new size or other assistance from a sales associate. This is great not just for customer service, but it can feed information to the associate on complementary pieces to bring to the dressing room for an “upsell.”
There were many more examples, but that’s just some of the creative ways retailers will be using technology, many that could add significant ROI to a retail business.
I will say one other thing that stood out, is that using the Azure platform in the cloud gives companies full control over their own data. This means that the very robust and valuable customer behavioral and related data that you, as a retailer, collect from implementing new technologies is fully owned and controlled by you, and not shared with Microsoft. This is very different from other cloud providers, who, as part of their services agreement, have access to the aggregated data that you collect while using their platforms – something that you should seriously consider before you pick a cloud-services provider.
If you are a retailer or aspiring retailer that wants to implement technologies, there are a bevy of partners that can help you to think through and implement the new technologies in your location. Some of the ones highlighted at the Retail Experience Center included Ava Retail and Swivel.
As a customer as well as a customer loyalty and experience strategist, I look forward to seeing entrepreneurs implement these technologies and variations on them to improve the customer experience – and their own business success.
American artificial intelligence (AI) firm AVA Retail has successfully completed the first trial of its autonomous checkout system.
The SmoothShop system allows customers to scan and pay for items with their smartphones in retail aisles. On finishing, the amounts owed by shoppers are deducted from their connected accounts with a click.
The technology is targeted at high-street retailers and smaller merchants.
● Frictionless shopping
SmoothShop is designed to be a quick and convenient system for both customers and retailers. The checkout doesn’t rely on a third-party app or turnstile – AVA said “shoppers simply enter the store with their phone”.
However, the company explained that it does offer additional software and hardware for stores that want to take extra security precautions. The system is powered by “deep learning, computer vision, and sensor fusion technologies”, added the firm.
AVA announced its frictionless checkout system in August 2016, but didn’t start trialling the technology until September 2017. Since then, it has been testing it in co-working space/start-up community WeWork’s food and beverage kiosks.
AVA has collaborated with Mastercard to bring the latter’s digital payment and security services to AVA’s cashier technology. Mastercard is on a mission to “provide comprehensive solutions for retailers across multiple categories”, explained AVA.
In the UK, the Co-op’s app is also built on Mastercard’s Masterpass secure mobile payments technology.
Stephane Wyper, senior vice president of new commerce partnerships at Mastercard, said, “Mastercard continues to engage with innovative companies that are developing technologies that can transform the in-store retail experience to make the consumer journey as frictionless as possible.
“This collaboration is a great example of how we can couple our rich set of payment, security, and analytic capabilities with AVA’s retail IoT assets to help retailers deploy unique experiences today,” he said.
● Transforming retail
As Wyper suggested, AVA has also developed an analytics solution in partnership with Mastercard, to help retailers gain better insight into their customers’ needs and behaviours.
So far, AVA claims to have processed more than 30 million customer journeys, 750 million product interactions, and 20 million checkouts throughout four continents.
Atul Hirpara, chief executive officer of AVA, explained that firm is helping stores accelerate their digital transformation plans and tap into emerging technologies.
“[Retailers are using] IoT sensors to digitally transform physical retail locations, creating digital footprints of in-store shoppers, store associates, and store inventory that was not available before,” he said.
By tapping into IoT data, retailers can “create better shopper experiences, drive staffing efficiency, and higher sales conversion”, he added.
● Internet of Business says
Mastercard’s strategy to provide the underlying technology for frictionless shopping is becoming clear, and we can expect more announcements in this space in the months ahead. The tipping point will come when the biggest retailers get onboard with smartphone shopping, with many having already deployed automated self-checkouts.
As we reported in our story on the Co-op’s similar programme, frictionless shopping has become critically important to rising numbers of customers. Many use their smartphones for shopping lists, while others compare goods online along with in-store prices from other retailers in the aisles.
Now both consumers and retailers want in-store shopping to be as swift and hassle-free as ordering goods online, but with the added benefit of bricks rather than clicks: instant access to goods.
The result could be greater loyalty to the brands that deploy these technologies – the Holy Grail for all retailers, especially in the squeezed mid-market – and a more efficiently run business.
However, not all retail environments will be appropriate for the instant gratification approach: it will be a ‘horses for courses’ market, with many shops – particularly in higher-end goods and fashion – differentiating themselves by their quality of personal service, as well as their goods.
In the UK, the Co-op has said that it has seen the use of cash in its food stores diminish rapidly as alternative payment methods have become more popular. Cash transactions have fallen by more than one fifth over the last five years, and by 15 percent in the past 18 months alone, it said.
Doubtless competitors will be watching to see how secure this new system is, what the impacts are on shopper numbers, supply chain/ordering processes, and the bottom line – and whether the system is used or abused.
According to a recent study, retailers are expected to invest more than $20 billion per year in the digital transformation of the industry. For consumers, one of the most visible aspects of this transformation will be the growth of cashierless checkout. A newly-formed company, AVA retail, is poised at the forefront of this trend.
AVA refers to the experience as “frictionless” checkout. This isn’t just the self-serve lane at the grocery store we’re talking about; AVA retail deploys internet of things (IoT) sensors within physical retail locations in order to create digital footprints of in-store shoppers, store associates and store inventory. The data is then converted into analytics in order to drive better shopping experiences, maximize staffing efficiency and push for a higher sales conversion rate.
While hardware optimized with AI, deep learning, computer vision and sensor fusion underpins the technology, the frictionless checkout experience is far simpler from a customer point-of-view. Shoppers simply need to enter a store with a phone; there’s no app that needs to be opened. Creating a "pick-and-go" experience for food shopping is a particular focus for AVA; the technology can be used for just about any type of snack bar or quick-serve restaurant that might otherwise be closed during odd hours.
AVA’s product suite for brick-and-mortar retailers also includes “smart” shelves, displays and mobile apps offering personalized promotional content to shoppers.
Machine learning, computer vision and people are the secret sauce making Amazon Go go, executives said during a keynote at ShopTalk Sunday.
It took Amazon several years to develop the technology that lets shoppers simply grab goods and walk away, with payment made automatically through the app. But in typical Amazon fashion, the entire concept began with a finished idea and a mission to reverse engineer the underlying technology to make it happen. "We wrote the press release first and then started building the product," said Gianna Puerini, vice president of Amazon Go. "We had to figure out how to do it."
The technology challenges were many, but boiled down to three, according to Dilip Kumar, vice president of technology at Amazon Go and Amazon Books. First, was to execute the concept in a way that seemed effortless to the customer, where the technology simply fades into the background. "To do this in a seamless way is a lot harder than it seems," he told attendees.
Second, "We decided we wanted to do this using computer vision and machine learning," he said. "To do this we had to invent many algorithms to solve this problem of who took what in a grocery store setting." The technology uses multiple cameras to identify products and shoppers in a crowded place, to a level of specificity that will identify items, down to the flavor of jam.
RFID was not the solution, putting tags on individual items was not the solution. Creating a robust hardware and software solution that worked together was.
One of the biggest challenges, according to Puerini, was simply the art of retailing, in the classic sense. "The more traditional aspects of retail are the ones I spend the most time on during the day," she told the packed auditorium in the Sands Convention Center. "The challenges are a lot like those for most in this room." In particular, to provide a compelling assortment that customers will like, at a good price and in a convenient setting.
Among the most popular items at Amazon Go are the prepared meal kits created to serve dinner for two in 30 minutes, said Puerini. Developing, sourcing and replenishing these are the kinds of blocking and tackling that retailers everywhere face, and Amazon Go is no different, cutting-edge technology and all.
In spite of the technology, the human element is an important component in Amazon Go. Eliminating the checkout got rid of a major pain point for shoppers, but "physical shopping is fantastic, just not the checkout," Puerini said. "We want to put our resources behind the things that add value — the human team."
"It takes a lot more than just being able to walk out to make a store," said Kumar.
Store associates are readily available throughout the concept, with one or two regularly in place at the exit. Assuring customers that they can indeed, just put items in a bag and leave, is a regular occurrence according to Puerini. It's one they expect will become less frequent as shoppers become more accustomed to the process.
Amazon Go may the hottest retail concept of the year, or the last several years, but it's not the only frictionless shopping solution on the rise. Startups are developing and announcing similar technologies that promise to help retailers stay abreast of this trend. Retail Dive got a demonstration from one such startup, Ava Retail, in a neighboring suite during ShopTalk, and similar pitches are coming in fast.
There are also applications beyond the convenience store concept. Quick serve restaurants are prime candidates — imagine going into a Starbucks to pick up a mobile order, adding a juice or other items from the grab and go case and simply walking out. Not only is the line avoided, which was the point of using the mobile ordering feature, but the store gets the add-on sales that are currently being missed in these more targeted purchases.
Similarly in a hotel where snacks and beverages are often displayed on open shelves, like a pantry. Today these need to be brought to the check-in desk and added to the room bill. But by adding cameras and sensors, and linking the room key which is attached to a credit card on file, that stop at the counter becomes unnecessary.
Transit centers, too, are ripe for these applications. Commuters can quickly grab an item from a kiosk and jump on a train. Cameras track the movement and payments are tied to the auto-replenishment program of the cardholder.
Retailers that are not Amazon are seriously looking at elements of Amazon Go's frictionless checkout, or "walk-out" technology, Ava Retail Founder and CEO Atul Hirpara told Retail Dive. And while Amazon Go packs a lot of hardware, there are solutions that use scaled down versions, making it less expensive to trial and implement.
Amazon itself is not actively marketing or implementing the technology, making it available to other retailers or brands. Nor are there any plans to roll the technology out to Whole Foods Markets, said Puerini.
AVA retail Announces Details of Frictionless Shopping Pilot and Demonstrates Its Advantages at Shoptalk
SHOPTALK CONFERENCE -- MARCH 19, 2018 -- LAS VEGAS -- AVA retail, the retail AI company providing cashier-less checkout and a suite of data solutions for brick-and-mortar retailers, today formally announced the company, its solutions, partners, customers and data from its SmoothShop cashier-less checkout and AVA SmartTrack. This announcement is significant because retailers are expected to invest more than $20B per year in the digital transformation of retail, according to Grand View Research (2017).
AVA retail is a retail AI and IoT company with customers including one of the world’s largest superstores, numerous big-box retailers, supermarkets and one of the world’s largest coffeehouse chains. AVA is partnering with leading technology players including Mastercard and Microsoft Azure IoT. With Mastercard, AVA is collaborating to integrate their cashier-less checkout capabilities with Mastercard’s robust set of digital payment and security assets to provide comprehensive solutions for retailers across multiple categories.
One of the First Companies to Deploy Cashier-less Checkout
AVA retail conceived frictionless checkout in August 2016 and was one of the first companies to deploy it externally in September 2017 in conjunction with Mastercard as a pilot with WeWork to reinvent the Honesty Market experience.
“We asked ourselves, ‘Why can’t a retailer better understand shoppers as they travel through the store and interact with products? Why can’t they track dwell time and paths? Why can’t they deliver insights and predictions in real time?’” said Atul Hirpara, AVA retail CEO. “With AVA retail they can leverage IoT sensors to digitally transform physical retail locations, creating digital footprints of in-store shoppers, store associates and store inventory that was not available before. AVA retail then converts this data into insights through its Analytics dashboard, empowering retailers and CPG companies to create better shopper experiences, drive staffing efficiency, and higher sales conversion. Taking our AVA Experiences to the next level of truly frictionless shopping was not a huge step for us.”
“Mastercard continues to engage with innovative companies that are developing technologies that can transform the in-store retail experience to make the consumer journey as frictionless as possible,” said Stephane Wyper, senior vice president, New Commerce Partnerships, Mastercard. “This collaboration is a great example of how we can couple our rich set of payment, security and analytic capabilities with AVA retail’s IoT assets to help retailers deploy unique experiences today.”
Competitive Advantages
AVA retail’s frictionless checkout provides an immediate receipt so shoppers know how much they’ve spent in the moment. Shoppers simply enter the store with their phone – there’s no need to ‘check in,’ open an app or go through a turnstile, although those are available options. The AVA retail solution is relatively inexpensive because retailers enjoy an SaaS model and standard hardware that’s been optimized with AI, deep learning, computer vision and sensor fusion.
In addition to cashier-less checkout, AVA retail has been supplying the world’s largest retailers and beloved brands with technologies to help them understand their customers’ journeys and behaviors in-store. The biggest retailers, supermarkets, office supply stores and coffee houses understand how long their anonymized customers linger over items, how they travel through their stores, details of customer / product interactions, and which marketing campaigns are most effective, via AVA retail’s technology. The company has logged more than 30M customer journeys, 750M interactions with specific products on shelves, and over 20M checkouts in four continents, helping retailers convert this data into increased sales and an enhanced shopping experience.
AVA retail Product Suite
AVA retail’s product approach includes the following:
● AVA Analytics - State of the art analytics for physical retailers to support Tier 1 digital transformation. These analytics are analogous to the best-in-class web analytics tools for online retailers and hence level the playing field for physical stores by giving them the ability to do funnel analysis, heat maps, A/B testing, campaign measurement and product recommendations and more.
● AVA Experiences - The traditional retail experience as we know it has to evolve to support next-gen experiences for shoppers. AVA Experiences is a product portfolio, comprising smart shelves, displays and mobile apps. It brings the power of just-in-time, personalized promotional video/content to in-store shoppers. It also has a powerful shopper app for endless-aisle capability and an assisted sales toolset for the staff.
● AVA SmoothShop - Cashier-less checkout for retail stores. This technology enables anything from quick service stores to big box stores for a pick’n’go experience that suitably applies to quick-serve restaurants, snack bars in hotels and quick eateries that otherwise remain closed in odd hours. Absolutely no checkout lines for customers, whatsoever.
To arrange a demo of the new SmoothShop cashier-less technology at Shoptalk contact: Kathryn White or Emma Lattanzio.
About AVA retail
AVA retail is an AI company that develops cutting-edge technology for brick-and-mortar stores to deliver more profitable and engaging customer experiences. AVA retail’s digital nervous system (Edge AI platform) uses state of the art deep learning, computer vision, sensor fusion and IoT-based techniques to track in-store shoppers and realize the future of retail shopping and sales. Based in Redmond, Wash., the company has 35 employees and has raised $2M in funding. For more information visit www.avaretail.ai.
