Cashierless checkout: Everything you need to know

Amazon Go may be stealing the spotlight, but it is far from alone in the rush to revolutionize in-store checkout through the use of sensors, scanners, mobile devices and more.

The ultimate goal of these projects is to reduce lines and increase foot traffic, but they rely on a solid foundation of digital payments technology. All of these systems have, in their DNA, a desire to move consumers to a digital payment option and away from cash and checks.

It's no accident that most of these projects often occur in a grocery store setting. That industry is notorious for long lines, aggravated by carts full of groceries that take a long time to unload, ring up, and bag — a process made even longer if the shopper pulls out a checkbook at the end.

This item is compiled from reporting by PaymentsSource writers including John Adams, Kate Fitzgerald, David Heun and Michael Moeser. Click the links in each item to read more.

Amazon Go's rapid expansion
amazon go store
Employees stand outside the new Amazon Go grocery store in Seattle, Washington, U.S., on Tuesday, Dec. 6, 2016. Amazon.com Inc. unveiled technology that will let shoppers grab groceries without having to scan and pay for them -- in one stroke eliminating the checkout line. Photographer: David Ryder/Bloomberg
Following the January debut of the first Amazon Go store in Seattle, the e-tailer planned several more stores to follow in locations such as Chicago, San Francisco, Los Angeles. Its second Go store opened in Seattle at the end of August.

It's a surprising show of confidence from Amazon, which only opened the doors to its first Seattle store after internal employee tests reportedly challenged the premise that the store's cameras and mobile technology could keep up with the crowds. And when Amazon Go finally did open to the public, early news coverage depicted the line-busting store simply moved its lines outside, as eager Amazon shoppers flocked to the store but had to wait their turn to step inside.

More shoppers may soon get the opportunity to try Amazon's new model, and it's clear that the timing will be key if Amazon is to demonstrate that its cashierless store concept is more than a novelty. It may seem fast for Amazon to already be picking out new locations, but Amazon has to move fast to fight off a growing wave of copycats and skeptics.

That said, even if the Go concept is a hit among Amazon employees and Seattle's tech-savvy shoppers, that doesn't mean it could succeed anywhere else. Mobile and digital payments tend to have trouble building a mainstream market, instead finding only pockets of success such as commuters and Starbucks patrons.

Shoppers entering the store scan a mobile app at a glass-gate turnstile, much like entering a subway. Cameras and other sensors detect which items shoppers pick up and carry out of the store, after which the purchase gets charged to whatever payment method the shopper has on file with Amazon.
Microsoft, Walmart test the limits of the Go concept
Microsoft store entrance
An employee waits to greet customers at a Microsoft Corp. store in Bellevue, Washington, U.S., on Thursday, Jan. 26, 2017. Microsoft Corp.'s second-quarter sales and profit exceeded analysts' projections, bolstered by rising customer sign-ups for Azure and Office cloud-computing services. Photographer: David Ryder/Bloomberg
Microsoft is the latest to try to help a big retailer jettison cashiers — and the latest to discover how hard that is.

In June, it emerged that the software giant was working with Walmart on a rival to Amazon Go, the e-commerce giant's checkout-free concept store. At first glance, this would seem to be a formidable challenge to Amazon, given Walmart's huge footprint when compared to Whole Foods, the biggest physical property Amazon owns.

Amazon competes with Microsoft on cloud delivered technology and is in a fierce e-commerce arms race with Walmart. If Microsoft and Walmart team up on a concept that Amazon is heavily invested in, they could put a major dent in Amazon's encroachment into traditional retail. Such a move would also give Walmart the same ability as Amazon to pair e-commerce and in-store shopping.

But there are problems for all of the players involved. The complexity of outfitting a full-sized store with digital sensors — the foundation of Amazon's process for automatically detecting which products a shopper intends to buy — means it will likely be a long time before cashiers disappear from either Walmart or Whole Foods.

Microsoft is reportedly using a crew of about a dozen developers to build its cashierless payment technology, and is reportedly considering attaching cameras to shopping carts instead of Amazon's approach of attaching them to the ceiling. That would be less costly and easier to mass deploy, but would still need to be proven in a real-world setting.
Gambling on a new model
casino gambling
RetailNext's sensors have their roots in casino security. In adapting its technology for a cashierless checkout environment, the company has improved its system to distinguish staff from shoppers, and can ID where shoppers are in stores and what they are buying.

"The shopping experience needs to change, and retailers now understand that and consumers are craving it," said Bridget Johns, head of marketing and customer experience at RetailNext. "One of the options for brick and mortar to strike back at e-commerce is real-time in-store analysis, where nascent technology gives consumers the a personalized experience without stopping to pay or engage with staff.

Over the past couple of years, Activant Capital has been part of more than $100 million in investments in RetailNext. The New York-based Activant has also been part of more than $60 million in investments in ShopKeep POS, another New York-based company that embeds payments and digital content into tablets and other mobile devices. More recently, Activant led a $17 million investment in NewStore, a Boston-based mobile retail platform that combines in-store and online engagement to create a single view of a consumer's shopping and payments across channels.

"It's the last mile," said Steve Sarracino, founder and partner at Activant Capital. "You know who is doing what … and you can connect a shopper to an item."
'Go' on a budget
Surveillance camera in a grocery store
CCTV camera security in shopping mall with supermarket blur background.
Since Amazon Go's announcement, there has been a rush to duplicate the company's cashierless store concept without the same level of tech investment. The latest competitors are focused on the cameras that identify items as consumers take them off of the shelves.

Amazon's store was built from the ground up with cameras and sensors to detect which items are being taken by which shoppers; it's unlikely that rival supermarkets will want to do as much heavy lifting in their existing stores.

Trigo Vision, a Tel Aviv-based computer vision startup that serves retail clients, on Wednesday announced it had emerged from "stealth" following a $7 million investment from U.K.-based Hetz Ventures and Vertex Ventures Israel. Trigo combines conventional surveillance cameras with machine vision algorithms to identify and capture shopping items.

The company's goal is to require fewer and less powerful cameras by relying on a data collection and analytics. Trigo Vision wants to undercut the the other developers pursuing cashierless stores that use a denser array of advanced cameras that cost significantly more per unit.

Trigo Vision relies on the general surveillance cameras that most retail chains already use, which cost between $50 and $200. The highest resolution security cameras vary widely in price, but are mostly above $500 and often higher than $1,000.

"We're using basic cameras that most stores have today," said Michael Gabay, co-founder and CEO of Trigo Vision. "There are already lots of cameras in stores."

Rather than investing in more expensive hardware to enhance the accuracy of image capture, Trigo Vision has focused on leveraging deep learning and artificial intelligence to develop tracking that identifies items, brands, price, discounts and pairs that information to the shoppers' e-commerce accounts.
Can you do it without cameras?
Smartphone user
Close up of a man using mobile smart phone
The cashierless Amazon Go store is also very much a metaphor for the surveillance state — cameras are everywhere, and each shopper's every move is tracked meticulously to determine which products they picked up, put down or left the store with.

For stores that don't want such a high-tech makeover, options for automatic checkout options are being built on a much simpler foundation.

The Boston-based Moltin merges an IoT transaction concept with in-store contactless payments for self-checkout.

"It's easier than putting 200 cameras on the ceiling. That's the issue the retail industry has," said Jamus Driscoll, Moltin's CEO. "[Automatic checkout] needs to be simple so everybody can take advantage of it. We wanted to look at the assets that are available for all of us, like smartphones."

With Moltin's system, consumers navigate to the store's URL and scan a bar code on an item to automatically charge the consumer's Apple Pay, Google Pay or card account without having to download an additional app from the store. A receipt appears on the consumer's phone, which he or she shows to a store rep on the way out.

The setup is not the simple "just walk out" experience that Amazon Go promises, but it still eliminates the point of sale terminal, dedicated self-checkout kiosks, e-commerce checkout pages, and special video-sensing equipment deployed inside stores, which carry a cost that may not be affordable for all retailers.

Moltin recently completed its first deployment at Stance, San Clemente, Calif.-based retailer that specializes in athletic socks (as narrow as that sounds, Stance is the official sock of Major League Baseball and the NBA).
Fast follower
Standard Cognition concept store
"Our company would exist and we would be doing this without pressure from Amazon, but we have gotten more funding because of Amazon and that pressure is felt and understood by retailers," said Jordan Fisher, CEO of Standard Cognition, a Palo Alto-based startup that is selling artificial intelligence technology that uses advanced cameras to eliminate most of a store's need for traditional checkout.

The concept strongly resembles Amazon Go. At the time Standard Cognition developed its technology, Amazon Go was still in a prolonged pilot, reportedly struggling to deal with large crowds. Despite those problems, Amazon has proven that such a model is possible, Fisher said.

"We would be in much more of a research phase, trying to convince the world that this is even theoretically possible," Fisher said. "Because of Amazon's pressure there's more of a willingness to accept this."
Albertsons gives it a Go
Grocery delivery
Close-up Of Man Delivers Crate Of Groceries At Home
Following the path paved by the checkout-free Amazon Go concept, the newly merged Albertsons and Rite Aid are developing their own technologies for faster and more efficient checkouts.

The cashierless Amazon Go store is barely more than an experiment, but it has already sparked a race to put similar models in place. This competitive trend is particularly heated among grocery stores, where Amazon competes directly through its ownership of Whole Foods and AmazonFresh.

Albertsons unveiled its plans for an Amazon Go-style store during a presentation to analysts in May. The store's cashierless checkout system will support a limited set of products such as Albertsons' meal kit line, Plated, said Shane Sampson, chief marketing and merchandising officer. The system will be supported by an app for mobile checkouts as well.

“We’re experimenting with Amazon Go-like technology today, where for example someone could go in and pick up a Plated order, it would know that you’re in the store, it would tender and order and you can leave outside of the check stand,” said Sampson.

In broad strokes, this is very close to Amazon's model, which uses a mobile app to determine which customers are in its store and automatically charge their default payment card for any products they walk out with.

During the presentation Albertsons revealed other technologies it is in the midst of developing, including a mobile app which would allow a customer to buy and pay for fuel automatically at corresponding gas stations. It is in the process of patenting this technology.
Before Amazon, there was Kroger
Kroger shopping bag
An employee bags a customer's purchases at a Kroger Co. store in Peoria, Illinois, U.S., on Tuesday, June 16, 2015. Kroger Co. is expected to release quarterly earnings on June 18. Photographer: Daniel Acker/Bloomberg
Many retailers are watching Amazon Go as a test case for their own innovations. But from the perspective of Kroger payments chief Kathy Hanna, it's Amazon that can learn from her.

"It's a very interesting idea," said Hanna, senior director of Enterprise Payments & Store Support for the Cincinnati-based grocery chain and one of PaymentsSource's 2017 Most Influential Women in Payments. "They're all trying to do what we are already doing, which is using digital to make it faster and easier to shop. They're just taking a different approach."

Kroger's been adding online tools at a rapid pace. The company's Kroger ClickList enables people to order groceries online, choose a pickup time and retrieve items at the store. But it's not skimping on the personal touch. A store employee greets the shopper and helps load the groceries.

"ClickList makes it easier for customers to engage with us," Hanna said. "They are extremely busy and have children and parents, jobs, etc. The digital platform helps make the grocery experience a lot easier."

Consumers pay at the point of pickup, with some stores also supporting an online payment option. "We want to make that smooth as it ties to our loyalty program," Hanna said.

And there you have it: The cashier-free grocery shopping experience.
China's cashierless economy
made in china technology
A cashierless chain called BingoBox has grown to 300 locations and 30 cities in China in about two years, and is planning to expand to other cities in and outside of China. To shop at BingoBox, consumers use an app to gain access to the store by scanning a QR code. They then select items and pay via WeChat Pay or Alipay, with sensors "checking" the card to make sure no unauthorized items were selected.

By comparison, Amazon opened its first Go store in January in Seattle, and will reportedly add up to six stores by the end of this year. Even though that's much less than BingoBox, there are some signs that Amazon's pace of expansion may be too fast given the lack of consumer adoption of the necessary technology in much of the U.S.; and there's no sign Amazon is planning to turn its acquired Whole Foods network into cashierless stores.

In China, BingoBox isn't the only major cashierless chain in town. JD.com, China's second- largest online retailer after Alibaba, is in the midst of opening hundreds of unstaffed stores in collaboration with the real estate developer China Overseas Land & Investment, according to The Telegraph. These stores use facial recognition technology to generate heat maps to identify and track users, who then pay via a linked mobile app. JD is also piloting driverless cars to deliver groceries.
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