Has Amazon Go set the new benchmark for cashierless shopping?

A year ago, Amazon opened a cashierless store called Amazon Go, marking its biggest effort yet to change the way people shop in the physical world.

Has Amazon Go set the new benchmark for cashierless shopping?

Today a host of other companies are working to replicate elements of Amazon Go or invent other ways of streamlining store operations.

Many are startups, but established giants are wading in, too. Walmart has been testing Go-style technology, and Kroger and Microsoft recently announced a joint venture to bring elements of the e-commerce shopping experience to the grocery store.

Mighty AI, the company behind the Amazon Go technology, says Amazon Go showed “how far you can go.” Very quickly, according to chief executive Daryn Nakhuda , the state-of-the-art went from you-scan checkout technology to Amazon’s ‘just walk out’ approach and everything in between.

Amazon, which today operates nine Go stores in three cities, has announced no plans to sell the proprietary technology to other retailers. And even if it did offer to license the system, fierce competition with other retailers would probably preclude most partnerships.

“What we are seeing is Silicon Valley at large, venture capital at large, trying to come up with some solutions” to sell to retailers, says Steve Sarracino, founder of Activant Capital, a US, investment firm that has stakes in retail technology startups. “There will be a huge market” for other technology firms to capitalise on, he says in an interview with Bloomberg.

That was on display at the National Retail Foundation’s trade show, where one such hopeful showed off a blue shipping-container sized experiment called the NanoStore.

Built by startup AiFi, the 160-square-foot store’s limited inventory put it somewhere between a vending machine and small convenience store. Like Amazon Go, it was packed with cameras and shelf sensors that track customers as they browse and pick up items. On the way out, shoppers tap an app or swipe a credit card to pay.

AiFi’s chief executive officer Steve Gu says his company is following a similar technological route as Amazon but favours more automation. While Go is staffed by clerks stocking shelves and assisting customers, AiFi’s prototype is designed to be completely autonomous in its day-to-day operation.

Last week, AiFi said Carrefour, the French retail giant, and Żabka, a Polish convenience store operator, had committed to testing the technology.

AiFi has plenty of competition in the effort to eliminate checkout lines. During one four-week stretch beginning in August, three different startups piloted cashierless stores in the US.

One was Standard Cognition, whose inquiry started Mighty AI’s shift to working with retail technology companies. “This technology was coming regardless” of Amazon’s moves, says Standard Cognition co-founder Michael Suswal. “However, Amazon gave the space validity and forced competitors to look for a way to compete.” Investors, he says, have also taken interest.

Venture capital firms backed US companies working on store automation with $111 million in 2018, a record in Pitchbook data going back to 2003. About half of that sum went to Standard Cognition.

The technology behind such pilots is largely unproven. AiFi last year said it would unveil a pilot project at a full-sized grocery store belonging to an unnamed retailer before the end of 2018. But 2018 passed without any launch.

Amazon’s own well-funded research and development operation missed its announced deadline for opening the first Go store to the public in Seattle. The company spent more than a year tinkering with the technology during an employee trial.

What is clear is that a frictionless shopping experience is going to be part of the future and Amazon have set the bench market for others to beat

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