Sun, Jan 27, 2019 - Page 15 News List

Amazon Go, one year on, attracts host of cashierless imitators

Several start-ups are competing to seize a piece of what is likely to become a lucrative market as grocery stores look for ways to eliminate long lines without having to install costly and complicated gadgets

By Matt Day and Spencer Soper

A woman pushes a Caper Inc smart shopping cart at a Foodcellar & Co grocery store in the Long Island City neighborhood in Queens, New York, on Saturday last week.

Photo: Bloomberg

Mighty AI Inc spent much of its first five years building software that helps self-driving cars recognize real-world objects. The Seattle start-up went so far as to open a Detroit office to cozy up to the US auto industry.

Then in February last year, Mighty AI’s sales team received an unusual request: Instead of identifying pedestrians and cars, could they track items plucked from store shelves by shoppers?

A few months later, Mighty AI signed a deal to do just that, joining the race to help brick-and-mortar retailers keep pace with Amazon.com Inc.

A year ago, the e-commerce giant opened a cashierless convenience store called Amazon Go, marking its biggest effort yet to change the way people shop in the physical world.

Today, a fleet of companies are working to replicate elements of Go or invent other ways of streamlining store operations.

Many are start-ups like Mighty AI, but established giants are wading in, too. Walmart Inc has been testing Go-style technology, and Kroger Co and Microsoft Corp have announced a joint venture to bring elements of the e-commerce shopping experience to the grocery store.

Amazon Go showed “how far you can go,” Mighty AI chief executive Daryn Nakhuda said.

Very quickly, the state-of-the-art went from you-scan checkout technology to Amazon’s “just walk out” approach and everything in between, he said.

Amazon, which operates nine Go stores in three US cities, has announced no plans to sell the proprietary technology to other retailers.

Even if the Seattle leviathan did offer to license the system, fierce competition with other retailers would probably preclude most partnerships.

“What we are seeing is Silicon Valley at large, venture capital at large, trying to come up with some solutions” to sell to retailers, said Steve Sarracino, founder of Activant Capital, a Greenwich, Connecticut, investment firm that has stakes in retail technology start-ups.

“There will be a huge market” for other technology firms to capitalize on, he said.

That was on display at the National Retail Foundation’s trade show in New York last week, where one such hopeful showed off a blue shipping-container-sized experiment called the NanoStore.

Built by AiFi, a Santa Clara, California, start-up, the 15m2 store’s limited inventory put it somewhere between a vending machine and small convenience store.

Like Amazon Go, it was packed with cameras and shelf sensors that track customers as they browse and pick up items. On the way out, shoppers tap an app or swipe a credit card to pay.

AiFi chief executive officer Steve Gu said his company is following a similar technological route as Amazon, but favors more automation.

While Go is staffed by clerks stocking shelves and assisting customers, AiFi’s prototype is designed to be completely autonomous in its day-to-day operation.

Last week, AiFi said Carrefour SA, the French retail giant, and Zabka Polska sp. z o.o, a Polish convenience store operator, had committed to testing the technology.

AiFi has plenty of competition in the effort to eliminate checkout lines. During a four-week stretch beginning in August last year, three different start-ups opened pilot cashierless stores in the San Francisco Bay Area.

One was Standard Cognition Corp, whose inquiry started Mighty AI’s shift to working with retail technology companies.

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