Big chains explore AI following the initial success of Amazon Go
By NACS Online // August 13, 2019
U.S. retailers large and small continue to test the use of artificial intelligence to track what products shoppers are buying and then automatically bill their accounts when they walk out the door, reports the Wall Street Journal.
The concept of cashierless stores was born with Amazon Go, which launched in early 2018 and has since expanded to 15 locations. Amazon Go relies on cameras and sensors in each location to identify products that customers take off the shelves.
Cashierless checkout—both in the United States and in Asia—is a major theme in this year’s Ideas 2 Go video that will debut October 3 at the NACS Show.
Recent entrants into the cashierless shopping arena include Sam’s Club Inc., the warehouse retailer owned by Walmart, and Giant Eagle, the Pittsburgh-based grocery and c-store chain. In July, Sam’s Club announced it would offer a version of cashierless payment at a 32,000-square-foot store in Dallas starting this month. AI technology will allow shoppers to use their smartphones to scan an image of the product they want to buy. The cloud-based system uses computer vision and machine learning to identify products selected by matching them to a database of stored images.
In June, a global survey of about 400 retailers by International Data Corp. found that 28% are testing or piloting cashierless systems, according to Leslie Hand, vice president of IDC’s Retail Insights division. She knows of nearly 100 companies worldwide trying out the systems. “It’s awoken that fire for retailers to understand that this is the future of retail and they need to invest in it,” Hand said.
United Kingdom-based Tesco and Carrefour SA of France also are testing cashless systems. Tesco has said its method costs one-tenth of systems used by competitors, because it relies only cameras, not sensors.
Not every form of cashierless technology is a success. For six months, Walmart tested a cashierless system that was based on scanning barcodes but discontinued it in April 2018. The technology was impractical for pricing produce and other items that had to be weighed by a cashier, which slowed the checkout process.
Another issue is potential theft. Manual scanning operates on an honor system, and some customers don’t scan every item, often requiring stores to validate purchases. In the Sam’s Club trial, for example, an employee checks customer purchases as shoppers exit, but 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, which operates a Denver convenience store focused on fresh food, plans to open four other locations. Next year, it hopes to install a cashierless system using in-store cameras and sensors in two of the stores, said Mike Fogarty, Choice Market’s founder and CEO.