This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.
There is a surge of interest in autonomous checkout technology for convenience stores, as the retail industry struggles more than most through this extended global crisis. The pandemic has helped bolster the case for a checkout-free contactless shopping experience, which mitigates the spread of viruses. The technology also makes sense for major retailers in many markets, allowing them to scale their stores for shoppers, collect unprecedented levels of customer data, and massively reduce labour costs.
Memoori reviewed Amazon’s autonomous checkout plans to disrupt this industry in September 2020. Since the introduction of Amazon Go stores, and the acquisition of WholeFoods, Amazon convenience stores have become a major force with which to be reckoned for bricks-and-mortar grocery retailers. But Amazon’s solutions come with a heavy price tag that not all grocery retailers can afford. The hardware for each Amazon Go convenience store costs about $1 million on average.
One of Amazon’s rivals, Standard Cognition, a San Francisco startup, is challenging the giant with a less expensive retrofit solution for smaller retailers. Standard Cognition claims to provide the only checkout-free solution that can be quickly and easily installed in existing stores without making any changes to shelving, lighting, layout and inventory management processes. Without the use of shelf sensors, Standard’s ceiling-mounted cameras and its proprietary AI and machine-vision software, which accurately associates each shopper with the items they pick up to purchase, is a simpler approach.
The company has been boosted by raising $150M in their Series C funding round this month led by SoftBank Vision Fund 2 with participation from EQT, CRV, SK Networks, and other investors.
With this single largest investment in a pure-play computer vision company, Standard Cognition becomes a smart buildings unicorn at a billion dollar valuation.
In August 2020, Alimentation Couche-Tard, a Fortune Global 500 company that operates close to 14,500 convenience stores worldwide, including under the global brand Circle K, selected Standard to pilot touchless, autonomous checkout technology for its stores. Together, the two companies have launched the world’s first convenience store retrofitted with AI technology, located in the Phoenix, AZ area, with other stores to follow. With over 150,000 convenience stores in the U.S. alone, this is a key market for Standard.
Compass Group PLC, a U.K. based foodservice conglomerate, is also a customer. Compass, which operates thousands of locations including canteens, has installed Standard Cognition technology in three locations so far, including a convenience store at the University of Houston. Scott Wu, chief technology officer of Compass’s retail research and development unit, is a believer in automated checkout but says it will take time for the technology to become ubiquitous. “The cost is still really high, because it’s new and not at scale yet,” he said. “When the technology is mature, and the price is at a point where its scalable, it will be everywhere.”
Another startup addressing the autonomous checkout market is Qualcomm Ventures backed Aifi, an AI technology company automating the world’s stores for retailers and brands of all sizes, from small footprint pop-up stores to supermarkets. AiFi is building out hundreds of new and retrofitted autonomous stores around the world. With 330 stores slated to open in 2021, AiFi has partnerships with five of the top 10 U.S. grocery chains, three of the top six European chains, and with a number one store chain in Australia.
In December 2020, a Shanghai store, owned by a local retail chain in the city, was retrofitted with AiFi's all-in-one technology platform that includes multi-camera, multi-person tracking, real-time product recognition and live inventory tracking for a checkout-free experience. Customers use their WeChat app, the most popular mobile payment app in China, to enter the store, grab whatever they want and walk out.
In February 2021, AiFi announced that Wundermart will implement AiFi's computer vision technology into existing stores throughout Europe. Wundermart's 70+ stores vary between 50 to 200 square feet on average and are currently located in areas such as hotels, offices, and transportation hubs in the Netherlands, Belgium and Germany.
Despite the initial over-optimistic projections of autonomous store expansion, new social-distancing behaviours have given checkout-free convenience stores a boost. Furthermore, retrofit solutions are attractive in that they rely on a camera-only approach, making them cost-effective to implement and speedy to deploy in existing retail environments.