6 Frictionless Concepts
CHICAGO -- Suddenly, no-checkout and frictionless concepts are popping up across the United States. Six separate companies have either launched or announced plans to launch a store with some sort of streamlined shopping experience in the past month.
Amazon originally announced the concept of its Amazon Go store with a YouTube video in December 2016, but the first store did not open until January 2018. During that time, other companies were busy building their own frictionless convenience stores. Now, eight months after the first Amazon Go store opened to the public, no-checkout units are popping up a little more than once a week.
Click through for a glimpse inside today’s frictionless stores and what they could mean for the future of shopping …
1. Amazon Go
Arguably the concept that started the trend, Amazon opened its second Amazon Go corner store in Seattle seven months after its first in late August, quickly followed by the third location in Seattle less than a week later.
More recently, Amazon opened its fourth Go store in Chicago, the first to open outside Seattle. Amazon has confirmed plans to open additional stores in New York City and San Francisco, but the e-retailer has not given any indication as to when these stores might open.
If a recent report from Bloomberg citing sources familiar with the matter is accurate, Amazon could be considering plans to open up to 3,000 Amazon Go locations across the country by 2021. The report also indicates that Amazon is experimenting with the format with each Amazon Go opening, going between a store more akin to a c-store with grocery items or a simpler grab-and-go setup.
One thing is for sure: Amazon has quietly been collecting troves of data on Amazon Go visitors. With cameras and sensors watching shoppers' every move, Amazon is gaining invaluable insights into customer purchasing patterns. The sensors apply artificial intelligence (AI), computer vision and deep learning to track shoppers, while additional sensors on the shelves detect when an item is picked up.
2. Skip Checkout
Skip burst onto the c-store industry in August when Anderson, Ind.-based Ricker’s announced it would launch the app’s self-checkout service in all 58 of its c-stores.
- Ricker's is ranked No. 117 inCSP's 2018 Top 202 list of c-store chains by number of company-owned retail outlets.
Since the initial announcement of partnership with Ricker’s, Skip has announced integrations with tech suppliers such as ZipLine, PDI and Koupon Media.
More specifically, the mobile checkout company integrated with ZipLine’s automated clearing house (ACH) private-label debit consumer payment platform. With PDI, Skip integrated with the brand’s back-office enterprise resource planning (ERP) software. Finally, Skip partnered with Koupon Media to send consumer packaged goods (CPG)-funded offers to customers as they shop.
Skip aims to become the largest connected network of retailers in the nation, and the company’s rush to partner with c-store retailers and suppliers suggests it is working its way toward that goal.
Like Amazon Go, Zippin requires visitors to launch an app on their mobile device and swipe a QR code over a turnstile to enter. The store also uses weighted shelves and AI-powered software to track customers and products. But unlike Amazon Go, Zippin’s store in San Francisco only uses three cameras.
The concept uses payment processing company Stripe to charge customers and send their mobile device a notification with a receipt once they leave the shop.
Zippin is looking for retailers to integrate the tech into their own stores. Zippin told CSP during an exclusive tour that it is already in talks to form pilot partnerships with convenience stores in other urban markets. One of the shop’s founders, Krishna Motukuri, said each camera currently costs about $200, with additional costs for the weighted shelves and software. Additionally, retailers can choose to use the Zippin app or embed the app’s functions into their own existing app.
Photograph courtesy of Zippin
4. Standard Market
What sets Standard Market apart from similar concepts is the unobtrusive nature of its tech. Unlike Amazon Go, Standard Market does not employ sensors on its shelves. The system relies on nearly 30 cameras and AI to track people and products.
Zippin and Standard Market from Standard Cognition both claim to be the first no-checkout store to open in San Francisco. Zippin was the first to set up shop and open to a select set of media and consumers, while Standard Cognition was the first to open to the public.
For now, anyone shopping at Standard Market needs to download the Standard Checkout app onto their mobile device before entering, but eventually shoppers who do not have the app will also be able to shop there and pay via cash or credit card later this year, according to the company. Like Zippin, Standard Market is actively looking for retailers to use the company’s technology in their own stores.
Photograph courtesy of Standard Market
Inokyo dominated tech headlines in mid-August as a stripped-down version of Amazon Go. The store, in Mountain View, Calif., is little more than a cordoned-off section of a room with a relatively small number of SKUs.
Like Amazon Go and Zippin, the concept requires the customer to scan a QR code to enter. It also employs cameras, both on the walls and in the shelves, in addition to facial recognition. The concept requires visitors to scan their QR code again before they leave—not because the system demands it, but to assure customers that they are not stealing when they walk out of the store with their purchases.
The store’s shelves are mostly filled with kombucha, snacks, protein powders and bath products. A Tech Crunch article said that Inokyo is focused on collecting consumer data, and it has yet to decide if it wants to sell its technology to other stores, open its own chain or work with brands to improve the product. The Inokyo website is down as of the posting of this article, and Inokyo has not responded to CSP Daily News' request for comment.
Photograph courtesy of Shutterstock
6. The Drug Store
More of a pop-up than a burgeoning frictionless concept, beverage brand Dirty Lemon is opening a store where customers log their purchases via text, simply called The Drug Store. The store only sells Dirty Lemon beverages in New York’s Tribeca neighborhood, and customers simply walk in and grab one from a standing cooler.
The store monitors the space using cameras, heat mapping and an radio-frequency identification (RFID) tracker to monitor which products have left the shelves, but the concept largely depends on the honesty of its customers.
Dirty Lemon recently purchased Poncho, a weather chatbot service, and has integrated that technology into the text-to-buy platform. The company is reaching out to its customer database of 25,000 people, inviting them to have their first bottle free.
Photograph courtesy of Dirty Lemon Beverages
These concepts have not risen without controversy. Critics have pointed out that unbanked customers will struggle to shop in the no-checkout stores that require users to connect the store’s app to a working debit or credit card. Surveillance is also a problem for some shoppers. While the extra convenience of skipping a line is undeniable, some are uncomfortable with cameras and sensors watching and analyzing their every move.
There is also the labor issue. Without the need for cashiers, many fear businesses will use the technology as an excuse to shut out workers; however, as CSP has reported, a lack of cashiers has not kept Amazon Go from hiring a substantial staff for each location. Whether they are stocking shelves, answering customer concerns or assembling packaged food products, there appears to be plenty of work for human hands.
The real issue that will dictate the popularity frictionless stores is customer adoption. If people decide the risk of surveillance and automation is worth the ease of shopping without waiting in line, it will only be a matter of time before cashiers become the new gas station attendants—a largely abandoned relic of the past.