Nov. 2, 2011
Cashierless shopping may be just around the corner if Ran Margalit has his way. The CEO of ShelfX is confident that retailers all over the world will benefit from his company's "revolutionary checkout and inventory management solution" equipped with RFID and NFC technology offering shoppers checkout in aisles.
Equipped with highly-sensitive scales, a ShelfX Smart Shelf knows the exact item and quantity of the item being stocked. When shoppers approach the shelf (with an RFID-enabled ShelfX Card) to take an item, the system greets them by name, tells them what they have purchased, offers discounts and additional suggestions based on their customer profiles and processes their payments. On the back-end, the inventory is automatically updated.
"ShelfX ends cumbersome lines at checkout counters at grocery stores, big box stores and stadiums," Margalit said. "It also provides retailers with added-value benefits such as improved inventory management, real-time pricing updates throughout a retail chain, enhanced customer loyalty, and increased shopper conversion rates."
How it works
The system is comprised of ShelfX Smart Shelves, Software and Server platform, ShelfX Cards and Kiosks and the ShelfX App. Shoppers register one time for their RFID-enabled cards at a kiosk, which can be used at any retail location that has the ShelfX system. Once the shopper has collected his items, he approaches the ShelfX Kiosk to be identified and to see his purchases. All the information is transferred from the ShelfX Card. Preferred payment information such as a credit card, PayPal account, or Google Wallet can be stored on the ShelfX Card to process payment. A receipt may also be printed from the ShelfX kiosk.
"The obvious benefit here is for the shopper," said Margalit, who has not yet deployed the program in a store but said he is planning a large pilot launch. "They come in, take their items and leave; no hassles, no waiting in lines."
ShelfX also analyzes each personal shopping session in real-time to offer discounts via the LCD screen on the ShelfX Smart Shelf. An additional ShelfX phone app is also available to track shoppers' buying history and deliver personalized incentives.
"ShelfX will revolutionize the way we shop, and it's about time," Margalit said. "But in the same respect, we are taking the shopper back to a time when shopping was simple. The customer walked into a store, was greeted by name, told about the specials, paid without hassle and left."
ShelfX offers even more to retailers, according to Margalit, who pointed out that since pricing is updated by store managers in real-time using the ShelfX Software, the manual process of labeling shelves during store promotions or regular updates is no longer necessary.
Retailers no longer have to send store personnel to walk though aisles to check stock levels. Instead, ShelfX provides up-to-the-minute reports on inventory and alert store managers when certain items are running low and require re-stocking.
Out-of-stock products and mismatched inventory levels are a huge cost inefficiency that could be mitigated when shelves know how much product they have, according to Jason "Retailgeek" Goldberg, vice president of strategy and customer experience for CrossView, a provider of cross-channel shopping solutions.
"Imagine a shelf being able to page a stock person when it's running low on a popular product," he said.
ShelfX isn't the first system to promote a 100-percent self-service shopping experience. AisleBuyer has been working on mobile self-service checkout for a few years, and Apple may even be getting on the bandwagon. Full-scale adoptability, however, may take a while, according to Goldberg. Although he admits ShelfX sounds like a valid idea, he said there are some precursor technologies that need to happen first.
"No major retailer is likely to invent or adopt a new RFID based payment mechanism just to enable this technology, and there are major security implications, but when a touchless mobile payment standard emerges, and it inevitably will, companies like ShelfX will be able to leverage it for a variety of exciting new experiences," Goldberg said. "There are going to be loss prevention concerns, but I am confident they will be able to be overcome."
Margalit said loss prevention won't be an issue because stores will have guards in place with iPad kiosks to ensure customers don't leave with unpaid for merchandise.
Partnering for success
Goldberg predicts that ShelfX will have to partner with larger retailers and vendors to see success.
"I always worry when I see small startups like ShelfX trying to innovate a major new solution for retail. Their business model will require them to sell a high volume of solutions to make them cost efficient, and with all the consolidation that has occurred in retail, that volume is only achievable by selling to major retail corporations," he said.
Retailers simply can't buy a major piece of infrastructure or replace their legacy inventory management software with something provided by a startup, according to Goldberg.
"Hopefully, ShelfX has a plan to partner with some larger vendor," he said.
That's exactly the plan, said Margalit, who is not yet ready to discuss who his partners will be or where his pilot studies will launch.
"At the end of the day, I actually think the underlying components in the ShelfX system add a lot of value in retail environments, even if the total self-service vision is never realized," Goldberg said. "The retail industry needs smart-shelves that are aware of their inventory levels."
The industry, according to Goldberg, also needs to see paper fact tags replaced by digital smart displays/electronic fact tags.
"A digital system allows retailers to use more interesting pricing models (and) share custom offers with recognized shoppers," he said. "So even if it's several years before a major retailer is ready to pilot a completely self-service checkout store, I think we'll see great utility in some of the elements that ShelfX has demonstrated."