A year after Amazon.com Inc opened its first cashierless store, start-ups and retailers are racing to get similar technology in stores throughout the world, letting shoppers buy groceries without waiting in line.
If they work, cashierless stores could not only save time, but maybe money too. From cameras and sensors, the stores would know when shoppers pick up a product and put it down, and can send them a discount to tempt them to buy it.
Merchants would receive more insights into how people shop. They could create more space for merchandise, better track when shelves need replenishing and draw more business from the hordes of customers who detest long lines.
However, the monitoring systems underlying cashierless technology are bound to raise new privacy issues and worries about customer data falling into the wrong hands, especially if stores deploy facial recognition software in the omnipresent cameras watching shoppers.
“It could be scary and it could be creepy,” said Peter Trepp, chief executive of FaceFirst Inc, a Los Angeles company that so far has only sold its facial recognition tools to retailers trying to identify shoplifters and other criminals.
Amazon has a head start in the US, opening 10 convenience stores in three cities: Chicago, San Francisco and Seattle. The stores sell salads and sandwiches for lunch, everyday items like toilet paper and Advil, and groceries, such as Cheerios and raw ground beef.
Shoppers scan an app to enter the Amazon Go store, grab what they want and walk out. Cameras and sensors on the ceiling track what is taken so that credit or debit cards are automatically charged when they leave.
Shoppers know how long it took to shop, as Amazon sends an alert with their shopping time.
Amazon does not say how much money its cashierless stores make, but analysts from RBC Capital Markets visited Amazon Go’s two San Francisco stores to come up with a number.
Based on their observations of traffic patterns, they estimated that about 400 to 700 customers per day visit each of the 185m2 Amazon Go stores, generating sales of US$1.1 million to US$2 million annually, assuming an average purchase of US$10, RBC said.
At the high end of that range, it works out to twice the sales of a typical US convenience store, it said.
Several start-ups are pitching technology to retailers that want to create Amazon Go-like stores of their own.
One of the companies, called AiFi, said it has signed deals with France’s Carrefour SA and Poland’s Zabka Polska sp. z o.o. convenience stores.
Others, including Zippin, Grabandgo, Trigo Vision Ltd and Inokyo, said that they are negotiating deals with retailers in the US and other parts of the world, although none were ready to identify them yet.
So far, companies working on the technologies are finding ways to do without facial recognition. Their systems rely on cameras for identifying objects rather than people.
Standard Cognition Corp and Zippin both opened small stores in San Francisco last year that have held invitation-only demonstrations or been open for limited hours with a scant selection of merchandise.
Amazon appears the most likely to make cashierless stores a more common sight, partly because it can afford to open stores with the technology already built into them, given its market value of about US$800 billion — ranking among the most valuable companies in the world.
However, the US’ biggest retailers are also trying to speed up the shopping process.
Sam’s Club, a warehouse-style club owned by Walmart Inc, opened a test store in Dallas, Texas, that has no cashiers. Instead, shoppers use their smartphones to scan products and pay.
7-Eleven Inc is testing something similar at 14 stores in Dallas.
As cashierless stores become more common, there will likely be more political pressure to ensure that they still offer an option to pay by cash to avoid discriminating against lower-income consumers without bank accounts and credit cards.
For now, Amazon appears to have its eye on smaller stores: Late last year it introduced a 42m2 version of Amazon Go that can be plopped into office buildings or hospitals, like a walk-in vending machine.
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