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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