Frictionless in San Francisco

SAN FRANCISCO -- Two blocks from San Francisco’s Salesforce Tower and a brisk nine-minute walk from the city’s Financial District sits an unmarked 180-square-foot convenience store that just might give retailers a fighting chance against Amazon Go.

Zippin, the newest entrant into the checkout-free technology space, operates the concept store designed to introduce itself and refine its product offerings. In mid-September, the doors will open to the public for limited hours. Right now, the windows are papered up from the inside and reflect the brightly colored tresses of the city’s techies and the orange vests of the developing area’s construction workers.

The idea for the proprietary technology, which has attracted $2.7 million in seed funding, came to co-founder and CEO Krishna Motukuri during a fateful trip to Trader Joe’s. When Motukuri’s wife asked him to pick up milk on one weekday evening, the new dad was met with sprawling checkout lines. “I thought, ‘No way am I going to stand in this line for one item—there has to be a better way,' ” he told CSP Daily News.

The executive now heads up the first major answer to Amazon Go’s smart convenience store and “just walk out technology.” Behind the stores’ shelves filled with grab-and-go entrees, packaged snacks and beverages, four members of the Zippin team work at a table. Over the next few months, however, Motukuri plans to expand the demo concept to take up the whole workspace. His goal is not to become a retailer but to put the technology in every single store.

Read on to find out how ...

Photo courtesy of Alaina Lancaster

Like Amazon Go, Zippin uses cameras, weighted shelves and software with vision cognition and artificial intelligence to allow shoppers to walk out of the store without once reaching for their wallets. Customers launch an app with a QR code to swipe in the turnstile, and the cameras installed in the ceiling begin visually tracking each person. “You can think of it as an internal GPS system,” Motukuri said. “Cameras give a birds-eye view of the entire store, so customers essentially become a dot on a map.”

Compared to Amazon Go’s more than a hundred cameras, the tiny story only has three cameras that are somewhat hidden by the glare of nearby fluorescent lighting. That’s on purpose to maintain privacy and set consumers more at ease. The Zippin system also does not rely on facial recognition. “We want the technology to blend into the store,” he said. “We decided early on they would have to be more like sensors than cameras. No human really gets to see that the video clip, just the data.”

The cameras, weighted shelves and software work in conjunction to detect when customers pick up and put back items. Once patrons exit the turnstile, the app charges their preloaded payment information via payment processing company Stripe and generates a notification with a receipt.

Although Zippin aims to enter c-stores, drugstores and supermarkets, Motukuri said the first objective is to target wherever there are lines. In San Francisco, where people are willing to stand in line to browse footwear made from recycled water bottles, it’s safe to say he’s come to the right place. The company has put a flag in the ground as the first checkout-free store in the city ahead of Amazon Go, which began hiring for a San Francisco location back in May. Zippin is currently in talks to form pilot partnerships with convenience stores in other urban markets. Motukuri declined to name the specific retailers.

The company designed the technology so that stores could seamlessly retrofit the product into their locations. “Our main goal is to make it a turnkey solution for owners,” he said. Right now, each camera would set retailers back around $200, with additional costs for the shelves and software.

When it comes to labor, small urban stores that invest in the technology could go unmanned and workers at larger stores can focus on customer service, he said.

Photo courtesy of Alaina Lancaster

Motukuri wants c-stores to know that Zippin aims to offer more operator control. “We’re a technology provider, it’s your store,” he said.

The product unlocks a treasure trove of data about consumer purchase decisions, including items they picked up and put down, how much time they spent in the store and how they moved through the store. And retailers have full access to all those metrics, which can help even the playing field with e-commerce giants who have access to consumers’ browsing habits, Motukuri said.

Retailers also can choose to use the Zippin app or embed the capability into their existing app.

Photo courtesy of Zippin