In these stores of the future, you grab stuff and leave
Until this fall, Chintan Maniar managed nearly 200 employees at a Target store in San Jose, California.
Now, after 20 years at the big-box retailer, he manages a much tinier storefront in San Francisco. It’s staffed by many more cameras than people, and shoppers can walk in, grab a bag of Doritos or a pump-bottle of Mrs. Meyer’s Clean Day hand soap, and just walk out.
Standard Store, operated by a San Francisco-based startup called Standard Cognition, is open to the public and meant to showcase the company’s autonomous checkout technology. When you enter, you use an app to check in. Overhead cameras track you as you wander the aisles, logging the items you pick up and put down. You can connect your credit card to the app to pay, and an itemized receipt shows up within the app after you leave.
If this sounds familiar, you’re probably thinking of Amazon Go, which is the online retail giant’s foray into brick-and-mortar, artificial intelligence-driven, cashier-free stores. So far, Amazon has opened seven of them in the United States, and reportedly plans to have as many as 3,000 by 2021. An Amazon spokesperson said the company doesn’t comment on rumors or speculation.
Although Amazon Go is the most well-known name in autonomous checkout, it’s far from the only company that wants to let shoppers walk out of a store without ever having to wait in line to pay. A range of startups are emerging like AiFi and Trigo Vision that want to sell their own versions of this technology to existing stores.
Some have opened their own demo stores, such as Standard Cognition and Zippin, which have them up and running in San Francisco—a way to showcase AI-driven checkout to retailers who may want to use it, and to let passersby (myself included) stop in and shop.
These moves toward eliminating the checkout counter (or at least flirting with ditching it) come as consumers spend more and more money shopping online. This year, e-commerce in the United States alone is estimated to climb 16% to $525.7 billion, according to data from eMarketer, comprising nearly 10% of all retail sales in the country.
Customers also spend more time comparison shopping and reading about products online before heading to a store with a specific purchase in mind, rather than browsing like we did before the rise of online shopping.
In response, companies want to give shoppers more reasons to keep coming in, and that increasingly means making the experience more convenient.
Autonomous checkout is just the latest effort. In order to eliminate (or at least shorten) lines, stores are also trying everything from self-checkout stations to smartphone apps like supermarket chain Kroger’s Scan, Bag, Go. Some retailers, such as Apple, even have tablet-wielding employees that can ring you up at different parts of a store.
Katherine Cullen, director of industry and consumer insights for the National Retail Federation, expects that in the coming years large retailers in particular will invest in autonomous checkout systems.
“The reason people come into the store is changing, their expectations about convenience are changing, and that’s giving rise to a lot of the technology we’re seeing,” she said.
The companies building autonomous checkout systems are different, but the technology they use is typically similar. Generally, the stores rely on an app to check shoppers into the store, along with a network of cameras that work with machine-learning algorithms—which have been trained on items that are in the store—to figure out whether you’re walking out with a can of Pepsi or Coke.
The stores also sell lots of packaged goods like canned or bottled drinks, bags of candy, or containers of yogurt, which can be fairly simple to teach software to recognize (unlike clothing on a hanger or individual pieces of fruit).
But the experience of shopping in the stores can be quite different. When you walk into an Amazon Go store, you must scan your phone to open a gate; only then can you wander the aisles to buy boxed meal kits or a squat banana turmeric lassi. On a recent trip to the open store in San Francisco (a second is under construction), I spotted a number of employees that could assist me with questions or help me. Shoppers also filled the small space.
At Standard Cognition’s store, meanwhile, there’s nothing to stop you from entering. The 2,000-square-foot location, which opened on San Francisco’s Market Street at the end of August, has 27 cameras across its ceiling, tracking shoppers in 3-D space as they move from one camera view to another.
Once inside you’re supposed to hold out your phone, facing upward, so it can be scanned from above to check you in. Two employees were in there when I came in—one of whom helped me with the check-in process—but it was otherwise quiet. Standard Cognition cofounder and chief operating officer Michael Suswal said the company had been limiting visitors to up to five people at a time as its engineers work on making the software more certain about what it sees; Standard Cognition plans to allow larger groups starting in December.
Though stores with autonomous checkout are currently concentrated in a few urban, tech-heavy places like San Francisco and Amazon’s hometown of Seattle, they’re about to spread out. Standard Cognition has a deal with Paltac, a Japanese drugstore product distributor, to bring its autonomous checkout to drugstores in Japan. This will roll out first with a drugstore chain called Yakuodo, Suswal said.
And in Tel Aviv, Trigo Vision has a deal with Israeli supermarket chain Shufersal to use its technology throughout the company’s 272 stores. Jenya Beilin, Trigo Vision’s chief operating officer, said shoppers in Israel will be able to try it out within the next 10 months.
Humans and hurdles
Even though AI is becoming increasingly capable in stores, most companies I spoke with are confident that those who currently work as cashiers will still be needed.
Maniar points to the rise of self-checkout in stores like those of his former employer, Target, as an example of what may happen if autonomous checkout becomes more common. At first, he said, employees worried that their jobs would disappear, but it was convenient for shoppers and employees took on other roles in the store.
And there are still many hurdles—some technological, some social—that companies need to overcome to make autonomous checkout work well and to get (and keep) customers interested in shopping this way.
Even with packaged goods, it’s hard to accurately track items people take and put back.
Customers may also foil the system. For instance, at Standard Store I picked up two identical bags of Chex Mix at the same time with one hand—admittedly an effort to trick the cameras and software—and my receipt only included one of them.
“When people try to steal something that’s great,” Suswal said once I told him what I’d done.
He wasn’t kidding, either. His company can take the video footage from my shopping trip and use it to train the company’s AI system to better recognize theft.
Although I might be fine getting a free bag of snacks, I’d be upset if Standard Store charged me for more than I’d taken. Ed Fox, a professor of marketing at Southern Methodist University who studies consumer shopping behavior, stresses the importance of getting this technology working consistently and repeatably because undoing mistakes will take a lot of time.
“If you have an error rate of two or three or four percent, that’s unacceptable to a shopper,” he said.
Cashier-free checkout systems are also expensive—Beilin said it costs roughly $30,000 to install Trigo Vision’s system of cameras and other hardware in an 1,800-square-foot space, plus a recurring fee—and this could prevent or slow adoption by big-box and members-only warehouse stores.
Eddie Garcia, vice president of end-to-end experience for warehouse store Sam’s Club, said that the economics are “really tough” for installing these kinds of systems in, say, a 150,000-square-foot warehouse space (there are 198 Sam’s Club locations, and they average 130,000 to 150,000 square feet in size).
The company recently opened up a tech-testing store called Sam’s Club Now in Dallas, Texas, that has shoppers pay with their phones and use them to find products in the store. There is no traditional cashier, but it stops short of offering autonomous checkout.
That’s not to say Sam’s Club won’t consider such technology, though.
“We’ll go to where the customers take us in terms of their preferences,” Garcia said. “And we’ll be ready if that’s where the puck goes.”