Why NCR is taking supermarket tech down a different path than Amazon Go
The “Just walk out” technology Amazon Go stores introduced a few years ago was revolutionary for shopping and payments, but it’s a model most supermarkets can’t easily copy, according to NCR.
It's not impossible to retrofit an existing store, according to NCR, which is taking the approach that eliminating the checkout should be a journey rather than an instant makeover.
This is a stark contrast with the rush to develop AI-powered checkout systems from store-tech innovators like Grabango, Zippin and Standard Cognition, which is collaborating with Canada's Alimentation Couche-Tard to pilot autonomous checkout at Circle K stores in the Phoenix area.
Instead, NCR has devised a cloud-based store management platform to help stores get there piece by piece.
“Most retailers can’t afford to completely overhaul 20-year-old store architecture from scratch, so we’ve developed a blueprint that lets stores gradually evolve to quicker, frictionless and tailored checkouts,” said David Wilkinson, NCR’s senior vice president of retail.
The new platform, Emerald, uses APIs to streamline supermarkets' clerk-assisted and self-checkout models, and it enriches stores' customer loyalty, promotions, payments and merchandising capabilities. Five supermarket chains have gone live with it, and three more are in preparation. NCR claims about half of the smaller U.S. supermarket-chain sector, Wilkinson said.
NCR's platform upgrade also introduces a quasi-open architecture approach for supermarkets to customize functions and add certain third-party services, including new data management tools that could let stores share customer data with rival retailers in accordance with emerging data-sharing regulations.
Emerald replaces a decade-old platform called StoreLine, and its cloud computing approach dramatically cuts the time needed for technology and POS upgrades. This improvement — as opposed to a full Amazon Go-style overhaul — is enough for most supermarket operators at the moment, according to Wilkinson.
“We experimented with mini-stores in some locations where consumers could walk in and walk out without physically scanning items, but it required a lot of cameras and store re-engineering, and our core supermarket customers weren’t interested,” Wilkinson said.
Industry observers say the move to the cloud is a major improvement for supermarkets from legacy server-based platforms, but NCR may soon regret not solving for a full autonomous checkout solution.
“If any of the new crop of autonomous checkout tech providers successfully retrofits a larger, traditional supermarket with a walk-in, walk-out shopping and payment service, it will freeze the market for existing POS technology,” said Heidi Leibenguth, managing partner and research director with Crone Consulting LLC.
NCR needs to build its platform with the horsepower to keep up with the retail industry’s rapid shift to blended online and in-store shopping with predictive analytics, Leibenguth added.
“It’s great NCR is talking about opening up its platform, but it will be interesting to see if they're really prepared to let third parties plug into its systems in the way open banking has enabled fintechs to modernize legacy banks,” Liebenguth said.
Dynamic data tools within Emerald already have helped adapt to rapidly changing supply chain and customer behaviors during the pandemic, Wilkinson said.
“We aimed for a platform that lets stores deploy technology at a faster rate, and COVID-19 has substantially accelerated that speed,” he said.
During the peak of the pandemic, NCR tested Emerald by using API-devised microservices to add capabilities on the fly, Wilkinson said.
Bashas’, Arizona’s largest independent grocery chain, was early in its Emerald rollout across its 100 stores when the pandemic struck, Wilkinson said, but the initiative moved forward.
California’s Northgate Gonzalez Market has already migrated to the Emerald platform, and to date the Anaheim-based chain added 14 different customized store services through Emerald's API menu. One example is a trigger that authorizes the store to order a free Lyft ride home for senior citizens spending more than $50 on groceries.
NCR said Emerald also represents a huge leap forward in supermarket data capabilities that use shopper information to fine-tune store operations and promotions.
“We’re developing use cases where stores can gather their inventory and customer data to push out promotions in real time, and use geo-fencing to map the results back to them," Wilkinson said.
Although some consumers may prefer autonomous checkout, consumer shopping habits vary widely and most stores need to hit the middle ground with a mix of streamlined and assisted services.
“The spectrum of shopping preferences is huge. There are people who want to shop online, but a large proportion of consumers still want to check out with a clerk, and another large chunk prefer self-checkout and they all need to be accommodated,” Wilkinson said.
Emerald is designed to continually refine the checkout process. NCR’s Computer Vision within Emerald uses cameras and AI to identify items accurately and block theft, according to Wilkinson.
“Self-checkout, where consumers scan their own items and pay in-app or with a card has improved exponentially within the last few years," he said. "The system can identify a lemon, but it also deters theft and shrinkage because it knows when a customer has put the lemon’s bar code sticker on a bottle of wine, for example.”
Emerald’s checkout process also uses facial recognition for security, and it’s configured for managing data under new global data-privacy standards like GDPR and CCPA to give consumers control over their own shopping data.
“Data-privacy regulations are changing the game. Retailers always thought they owned the data, and consumer package goods companies also thought they owned product data, but it’s consumers who ultimately own it,” Wilkinson said.
NCR is working toward a point where consumers could make their shopping preferences available to any retailer instead of just at certain merchants.
“Shoppers could make their Bashas’ shopping history available to Kroger and other stores, opening all kinds of possibilities for getting what they need where and when they want it,” Wilkinson said.