Spurred by Amazon, Supermarkets Try Swapping Cashiers for Cameras
July 07 2019 - 5:59AM
Dow Jones News
By Parmy Olson
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 PLC, 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.
Write to Parmy Olson at parmy.olson@wsj.com
(END) Dow Jones Newswires
July 07, 2019 05:44 ET (09:44 GMT)
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