Spurred by Amazon, Supermarkets Try Swapping Cashiers for Cameras

Spurred by Amazon, Supermarkets Try Swapping Cashiers for Cameras

More retailers are embracing product-recognition technology pioneered by Amazon

By Parmy Olson July 7, 2019 5:30 am ET

LONDON—A man strolled down the candy aisle of a grocery store in England last month, picked up a bar of chocolate and stashed it in his back pocket. He wasn’t stealing. Specially equipped surveillance cameras were tracking both his body and the products he was taking off the shelves, to help him pay for them.

Tesco, one of the world’s largest supermarket operators, demonstrated this technology recently to investors, labeling it as one of the retailer’s big ideas for making shopping at its physical stores more convenient. Tesco is one of several grocers testing cashierless stores with cameras that track what shoppers pick, so they pay by simply walking out the door.

The retailers hope the technology—similar to that pioneered by Amazon.com Inc. in its Amazon Go stores in the U.S.—will allow them to cut costs and alleviate lines as they face an evolving threat from the e-commerce giant.

European efforts to scale up the technology in traditional stores—economically and without upsetting privacy advocates—will likely be closely watched in the U.S. Grocers in the U.K. often pioneer new technology like online delivery and self-payment kiosks that their American peers eventually adopt. For instance, Kroger Co. last year hired Britain’s Ocado Group PLC to build an automated warehouse filled with robots to fulfill home deliveries.

“People [in the U.S.] will definitely take note of Tesco’s experimentation, if only because it shows that someone outside of Amazon is now testing the concept,” said Chris Walton, a former Target Corp. executive and founder of consulting firm Red Archer Retail.

Tesco plans to open its self-styled “pick and go” or “frictionless shopping” store to the public next year after testing with employees. Eventually it wants to use the technology, developed by Israeli startup Trigo Vision, in more of its smaller grocery stores.

Tesco’s 4,000-square-foot test store uses 150 ceiling-mounted cameras to generate a three-dimensional view of products as they are taken off shelves. In its recent demo, Tesco’s system detected shoppers as they walked around the store. It also identified a group of products when a person holding them stood in front of a screen, tallying up their total price. Tesco is considering identifying shoppers through an app or loyalty card when they enter the store and then charging their app when they leave.

Tesco told investors its method costs one-tenth of systems used by its competitors, partly because it only uses cameras. Amazon Go uses cameras and sensors to track what shoppers pick. Amazon customers scan a QR code at a gate when they enter a store, then walk out when finished.

French retail giant Carrefour SA is also running tests in at least two stores where cameras track what is taken off shelves and shoppers are charged automatically when they leave. Carrefour is working with French startup Qopius Technology, whose cameras and software can read labels on products.

It used to be difficult to sell product-recognition technology to retailers, said Vasco Portugal, co-founder of Sensei Tech. “It seemed like crazy technology and it sounded like magic.” That changed after Amazon Go launched last year. “Immediately we started seeing a lot of appetite,” he said.

The Portuguese startup, which charges tens of thousands of dollars to fit out stores with the computing power equipment needed to track products, in addition to a monthly fee, said three European grocers are planning to roll out its system this year.

Israel’s biggest supermarket chain, Shufersal, plans to deploy similar technology across all its stores if its own trial works out. “The whole notion of waiting in line will vanish,” a spokesman said.

Retailers face some challenges with this technology. Customers may balk at having their movements tracked, though Tesco said the system used in its trial doesn’t recognize faces. Image-recognition technology is also expensive to run in larger stores, and requires enormous on-site computing resources. But the cost of computing power is falling, Mr. Portugal said, making product-tracking systems more commercially viable.

American grocery chains have typically been slower to adopt new technology than their peers across the Atlantic because the U.S. market is less competitive, said Bruno Monteyne, an analyst at Bernstein Research.

Despite initial excitement after Amazon Go launched, U.S. retailers have also faced concerns about excluding low-income shoppers who tend to pay with cash. Lawmakers in several cities, including San Francisco, have been considering bans on cashless stores. U.S. retailers also operate many large stores, where tracking thousands of products all day long would be more expensive.

Walmart Inc. is testing artificial intelligence-enabled cameras in a store in New York that can recognize hundreds of products, but only to manage inventory levels. The retailer plans to test its system on a 30,000-item “real-world” store that is nearly the size of a football field, but a spokesman said it wasn’t testing cameras for purchases.

Kroger last year launched a system that allows customers to scan and bag products as they shop and then pay by scanning a final bar code. It has looked at ideas for quicker payments but hasn’t embraced Amazon Go-style technology, a former Kroger executive said. A Kroger spokesman didn’t respond to requests for comment.

—Heather Haddon and Sarah Nassauer contributed to this article.


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