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  • Cashierless Stores Make Inroads in U.S.


    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)

  • AVA retail .Ai opening Choice market stores to public soon with frictionless shopping


    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.


  • AVA Retail’s CEO Shares What Drives Home Improvement Shoppers… and It’s Not Necessarily Price


    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.”