Amazon Go faces heat from retail startups implementing autonomous checkouts in their stores

September 5, 2019 5 Minutes Read

Autonomous checkouts are breaking boundaries for retailers. The checkout experience is the Achilles heel for retailers. Shoppers have been known to abandon their shopping carts seeing the long queues at the counters. In spite of the amazing strides retail industry has seen, what customers’ want is freedom from the endless lines at the checkout counters for a seamless shopping experience.

The future of retail is autonomous checkouts. That’s where AI, machine learning, deep learning, predictive analytics and sensor technology plays a big part. The combination of affordable ceiling-based cameras and precise in-store navigation maps is giving stiff competition to Amazon Go, where the shelves are packed with expensive sensors to track customer movement.

A frictionless shopping experience is the driving factor for retailers to strive for cashierless stores. Amazon Go made its debut in Seattle leading the AI powered autonomous checkout wars among the big retail giant and the SMB retail startups.

A number of startups are challenging Amazon’s dominance in dealing with the customer’s experience. Although the numbers are small, the technology is gathering a lot of interest among the in-store retailers. The startups that are taking on Amazon-Go’s dominance in automated checkout systems include Standard Cognition, Grabango, Pensa System, Trigo Vision, Caper, Zippin and Mashgin among others.

Why Amazon Go doesn’t gel with existing retail stores?

Amazon Go catered to its Prime members, who downloaded an app, entered the payment option and scanned the app during their entry to the store. Using the AI powered series of cameras and shelf sensors, they are able to track what each shopper put into their bags as they went around the store. They would then be charged via the app through the payment option preselected during their registration process and receive a receipt moments later on their phones.

The issue with Amazon Go and other shelf based approaches is that it requires hundreds of sensors, RFIDs, depth sensors, biometric trackers and a bottom-up restructuring of the stores. Plus the gated entry needs complete floor re-planning for the merchandise.

While Amazon Go is the latest tech that’s offering customers’ this shopping experience, it’s just not suitable for smaller grocery and convenient stores. The infrastructure and operational costs of setting up similar Amazon Go technology at the smaller convenient stores is too much for them. As a trend it still has a lot of catching up to do, with respect to being widely accepted by the customers and retailers.

Future of retail is in automated checkouts

The mobile scan and go self-checkout apps are gaining traction over the more expensive Amazon Go tech solution. They allow the customers to walk in, grab what they want, and leave without physically paying at the checkout counters. This is setting a new standard for the customer convenience and experience.

What the Standard Cognition and other startups offer as part of their autonomous checkout solutions is the convenient and cost effective overhead cameras and sensors to monitor the customer movement and shopping. Also they can cover large retail spaces unlike the autonomous solution offered by Amazon, which is limited by the large number of expensive shelf sensors required by the brands. While Amazon Go has introduced it only to its own stores, these startups offer the autonomous checkout solutions for existing stores. This vital distinction is the USP of the startups who wish to enter the autonomous checkout market currently dominated by Amazon Go.

As with any new technology, there are some concerns that needs to be addressed before customer’s line up (pun intended!) for autonomous checkout. There are some basic prerequisites that are essential for implementing the autonomous checkout feature as a viable market solution.

According to Michael Suswal, co-founder and chief operating officer of Standard Cognition, the top challenging autonomous checkout startup with a $50 million funding, has identified the below five priorities for making autonomous checkouts a must-do feature for retailers.

Privacy: Whether online data or financial data, shoppers demand their data privacy and protection without compromising on their customer experience.

Scalability: The data deluge seen with the adoption of autonomous checkout systems must be scalable without requiring complex installations or disrupting the store operations.

Customer Experience: A common complaint among customers is the long checkout lines and poor customer service. Autonomous checkout is the solution for retailers to delight customers.

Flexibility: Autonomous checkout systems provide retailers the flexibility to choose the type of payment options for the customers (accept cash, credit or other online payment options). They have the flexibility to monitor their merchandise and amplify their brand experience.

Insights: A lot of information can be gathered through the autonomous checkout systems, but the retail analytics should be leveraged without infringing on the customer’s privacy.

The disruptive potential of AI powered checkout systems is here for the brick-and-mortar stores to adapt to this new shopping experience. Fewer cashiers, reduced checkout lines, and reinvented shopping carts will redefine the customer experience. Amplified by machine learning, image recognition, sensors and deep learning algorithms, frictionless checkout systems are a long lasting technology. Autonomous checkout technology will reduce labor costs, improve customer experience and improve profit margins for retailers.

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