Following Amazon’s widely-publicised foray into cashierless stores, a group of startups are now chasing the prize of creating the tech underlying what is believed to be a new phase of convenience retail – but the e-commerce giant will be tough to beat.
A small area of San Francisco’s business district has become testing ground for tech that is set to revolutionise the store checkout process.
Within a few streets of each other, four Amazon cashierless stores seek to prove their technology will lead that revolution, while nearby, two start-ups vie to demonstrate their own brand of cashier-free tech is a winner, reports The Wall Street Journal.
At stake is the potential to transform the way consumers checkout of stores across the U.S.
Amazon’s first Amazon Go store opened at the online retail giant’s HQ in Seattle in 2018, and rapidly inspired rival concepts of allowing customers to pick up the items they want instore and then leave seamlessly – no checkout lines, no struggling with card payments and, of course, cash is nowhere to be seen.
Many of Amazon’s competitors, like start-ups, Zippin, and Standard Cognition in San Francisco, are using similar technology to carry out a similar process – cameras using computer vision and machine learning track shoppers as they pick up items. Others are trying to find simpler solutions that won’t require entire store redesigns, such as automated shopping carts.
The prize is enormous, and startups are pitching their ideas not only to grocery chains, The Journal reports, but also to sports stadiums and convenience stores. The benefits of automating the check-out process extend to cutting theft and raising profits.
Amazon is widely expected to license its tech to other businesses, the Journal says, and some start-ups are already pitching themselves as smarter alternatives.
“We don’t compete with our customers. And that’s a big advantage when we pitch to retailers,” Zippin Chief Executive Krishna Motukuri told The Journal.
But there is a recognition that Amazon will be tough to take on – it has deep pockets, plus a head start.
“They are years ahead of everyone,” said Mark Cohen, business professor at Columbia University and former CEO of Sears Canada Inc. “Not just in figuring this out but in actually proving out the concept.”
Currently, the tech is expensive and limited to smaller stores selling packaged goods. But Amazon Go’s idea does seem to be a hit with shoppers. Amazon now has 16 shops, ranging in size from around 450 square feet to 2,300, in four U.S. cities, with plans for a further two. All the time it is gradually increasing the range of products, and, perhaps most usefully, learning about shoppers.
Sourced from the Wall Street Journal; additional content by WARC staff