Retail IoT: The new cashier-free stores transforming shopping

Retail IoT: The new cashier-free stores transforming shopping

Cashier-free stores are shaping up to be the future of retail – but that future is likely to be led by China, as Jessica Twentyman reports.

Could a combination of in-store cameras, artificial intelligence, smart-shelf sensors, and a handy mobile app, put an end to the irritation of waiting in line for the checkout?

Zippin thinks it can. This week, the San Francisco start-up launched what it calls its “next-generation checkout-free technology, which enables retailers to quickly deploy frictionless shopping in stores and brings an end to waiting in line for good”.

The company also announced the opening of a concept store in San Francisco’s Soma district, where it is showcasing the technology – first to invited guests and then, during limited hours from mid-September onwards, the general public.

According to Zippin CEO Krishna Motukuri, “Consumer frustration with checkout lines is driving a tidal wave of demand among retailers and real estate owners keen to provide a frictionless retail experience.”

The prime focus for the company is convenience stores, along with fast-food restaurants.

Zippin in action

In order to have that ‘frictionless’ experience, customers must first download the Zippin app and input details of their preferred payment method. The app contains their store ‘key’ – in the form of a QR code – which they use to gain entry to a shop.

Overhead cameras follow customers’ movements around the store. It sounds creepy, but the company is keen to emphasise that its system doesn’t use face recognition; the cameras, along with smart-shelf sensors, are there to track which products are picked up or put back, and when.

As a shopper puts an item in their basket, the same items are added to their virtual cart and, on leaving the store, they receive a receipt for all the purchased goods.

Not only do customers benefit from a queue-free shopping experience, according to the company, but so do retailers, who free up floor space by getting rid of cash registers, don’t need staff to operate them, and can use the real-time data captured by the system to make better decisions about inventory.

“With Zippin, traditional retailers can now compete against e-commerce companies, which until now have had the advantage of leveraging a host of key data about their customers,” said Motukuri.

Cashier-free goes global

The idea of a cashier-free store isn’t unique to Zippin. Back in January, online retail giant Amazon opened a convenience store in downtown Seattle that operates along similar lines.

For now, it’s unclear if Amazon plans to open more outlets, use the same technology in the Whole Foods supermarket chain that it owns, or indeed, sell it to other retailers, perhaps via Amazon Web Services (AWS).

Earlier this month, UK supermarket chain Sainsbury’s announced that it is trialling its own approach to checkout-free shopping at the Clapham North branch of Sainsbury Local, while earlier this year, the Co-op also announced smartphone-based checkouts.

However, the real home of cashier-free convenience stores is China, where mobile wallets are already a well-established and widely used way of paying for goods and services.

There, a number of start-ups, such as BingBox, are opening cashier-free stores countrywide. However, the technology used in many of them tends to be rather less sophisticated, being based less on cameras, sensors, and AI, and more on RFID tags on products and self-scanning by customers. However, that could change quickly.

Chinese e-commerce giant Alibaba, meanwhile, is blazing a trail that other retailers may follow. In 2016, its chairman Jack Ma coined the phrase ‘New Retail’ to describe a shopping experience that seamlessly blends online and offline elements.

In April this year, the company opened a grab-and-go convenience store, Futuremart, at its Hangzhou HQ. The shop operates along much the same lines as Amazon Go and Zippin. And last year, it launched Tao Cafe, a cashier-free coffee shop, open to users of its Taobao e-commerce site.

Internet of Business says

Amazon fans may be surprised to know that China is already number one in e-commerce, in terms of the proportion of overall retail sales made up by online revenues. That’s according to Mary Meeker’s Internet Trends 2018 report – which the renowned venture capitalist presents each year at the Recode conference in California.

• This week, the number of internet users in China passed 800 million: more than the US and India combined. The figure can only rise significantly, as it currently represents just 57 percent of China’s population. By contrast, the EU’s 434 million internet users represent roughly 86 percent of the population.

And, as the authors of a mid-2017 report from strategy firm Boston Consulting Group, put it: “China’s unique retail history has given rise to one of the most advanced digital marketplaces in the world.

“With its sophisticated shoppers, massive volume of transactions, rapid rate of innovation, and integration of social media, multimedia, and other channels, China’s online environment offers a glimpse into the future.”