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Autonomous stores on the way, but is Amazon Go on first?

In many people's eyes, one of the most disruptive retail developments has been the late 2016 launch of Amazon Go, but some observers have questioned its economics and how well it meets customer needs. A number of competitors claim to be addressing Amazon Go's shortcomings.

Michael Suswal of Standard Cognition talks about cashierless stores with Laura Heller of Performics at the CES show.

January 23, 2019 by Elliot Maras — Editor, Kiosk Marketplace & Vending Times

Will autonomous stores be the next trend in retail? Presenters at the Hi-Tech Retailing Summit, now in its second year at CES in Las Vegas, didn't seem to feel much doubt about it. The first presentation at the Summit was, "The death of shopping as usual."

One of the most disruptive retail developments in many peoples' eyes has been the late 2016 launch of Amazon Go, the cashierless convenience store that allows people to pick up items and leave without having to check out. Once a shopper leaves the store, the shopper's credit card is charged and they receive an email receipt.

"Hello to the new retail world order," Laura Heller, director of external communications at Performics, a performance marketing agency, said at the start of the summit. "Autonomous stores are going to be it."

Amazon, which has displaced Microsoft as the nation's most valued company, plans to have 3,000 Amazon Go stores up and running within the next few years, Heller said.

Amazon Go draws competitors

Heller then introduced Michael Suswal, chief operating officer at Standard Cognition, one of several technology companies focused on the delivery of autonomous shopping solutions. Where Amazon Go has introduced its own stores, Suswal's company is among those that offer autonomous checkout solutions for existing stores.

In the year that Amazon Go has been available to the public, retail observers have questioned whether the economics are viable, and how well the store meets consumer needs. In the past year, Standard Cognition and others have attempted to address what they see as Amazon Go's shortcomings.

Suswal didn't pull any punches about what he saw as Amazon Go's weak points, despite the fact that his company's single store in San Francisco uses some of the same technologies, such as artificial intelligence, machine learning and computer vision. While Standard Cognition operates its own store in San Francisco, the company plans to offer technology to existing grocery and convenience stores that will integrate with their existing point-of-sale software.

Standard Cognition, according to Suswal, features competitive cost, flexibility and customer privacy in comparison to Amazon Go.

He said that Amazon Go hardware — including ubiquitous built-in cameras and shelf weight sensors — is both expensive and maintenance-intensive. Standard Cognition's store, by contrast, only has 27 cameras.

Shelf sensors like those used by Amazon Go are not viable in all retail environments, Suswal said. Standard Cognition, by contrast, uses an overhead camera that can be installed quickly without disrupting customers or operations.

Providing a flexible technology that existing retailers can adopt will allow them to sustain their own identities, as opposed to taking a "cookie cutter" approach. The less hardware used, the more flexibility the store has for merchandising, he said.

Customer privacy issues

Suswal believes that a key selling point that Standard Cognition has over Amazon Go is its ability to respect customer privacy.

"Privacy is a major issue," he said. "We don't want your payment information, ever."

In a recent blog on his company's website, Suswal referenced a class-action lawsuit filed last year claiming that Walmart video recording technology at self-checkout kiosks collects personal identification information in violation of a California state law. He said biometric identification, especially facial recognition, is not needed for autonomous checkout.

Retailers and brands can gather a significant amount of data about what customers buy without gathering information about the individuals themselves, Suswal said. Much of this valuable information is currently only available via e-commerce, but AI-based computer vision can provide the same capability in the physical store, he said.

Suswal also believes it is important for a store to accept a wide range of payment options. The Standard Cognition solution accepts cash and loyalty cards in addition to other payment methods. In integrating loyalty cards, he said Standard Cognition ensures that the process takes place in a way that is transparent to the end user. The customer will be aware of what data is being collected, and all data will be anonymized.

Improving the customer experience

Suswal was quick to acknowledge that one of the greatest retailer concerns today is improving the customer experience. The two biggest customer complaints, he said, are long lines and poor customer service.

He believes that autonomous checkout allows retailers to amplify their brands with customers, and that technology is rehumanizing retail.

"Anywhere eyes and brains are helpful, this platform is useful," he said, adding that manufacturing companies and hospitals have inquired about using his company's technology. But while there are even plans to deploy the technology in airport kiosks, he said the company's main focus is on grocery and convenience stores.