World’s biggest retailers race against Amazon to automate stores
SEATTLE — To see what it is like inside stores where sensors and artificial intelligence have replaced cashiers, shoppers have to trek to Amazon Go, the internet retailer’s experimental convenience shop in downtown Seattle.
Soon, though, more technology-driven businesses like Amazon Go may be coming to them.
A global race to automate stores is underway among several of the world’s top retailers and small tech startups, which are motivated to shave labour costs and minimize shoppers’ frustrations, like waiting for cashiers. They are also trying to prevent Amazon from dominating the physical retail world as it does online shopping.
Companies are testing robots that help keep shelves stocked, as well as apps that let shoppers ring up items with a smartphone. Hightech systems like the one used by Amazon Go completely automate the checkout process. China, which has its own ambitious e-commerce companies, is emerging as an especially fertile place for these retail experiments.
If they succeed, these new technologies could add further uncertainty to the retail workforce, which is already in flux because of the growth of online shopping. An analysis last year by the World Economic Forum said 30 to 50 per cent of the world’s retail jobs could be at risk once technologies like automated checkout were fully embraced.
In addition, the efforts have raised concerns among privacy researchers because of the mounds of data that retailers will be able to gather about shopper behaviour as they digitize their locations. Inside Amazon Go, for instance, the cameras never lose sight of a customer once he or she enters the shop.
Retailers had adopted technologies in their stores long before Amazon Go arrived on the scene. Self-checkout kiosks have been common in supermarkets and other stores for years. Kroger, the grocery chain, uses sensors and predictive analytics tools to better anticipate when more cashiers will be needed.
But the opening of Amazon Go in January was alarming for many retailers, who saw a sudden willingness by Amazon to wield its technology power in new ways. Hundreds of cameras near the ceiling and sensors in the shelves help automatically tally the cookies, chips and soda that shoppers remove and put into their bags. Shoppers’ accounts are charged as they walk out the doors.
Nowhere are retailers experimenting more avidly with automating store shopping than in China, a country obsessed by new tech fads.
One effort is a chain of more than 100 unmanned convenience shops from a startup called Bingo Box, one of which sits in a business park in Shanghai. Shoppers scan a code on their phones to enter and, once inside, scan the items they want to buy. The store unlocks the exit door after they have paid through their phones.
Alibaba, one of China’s largest internet companies, has opened 35 of its Hema automated grocery stores, which blend online ordering with automated checkout. Customers scan their groceries at checkout kiosks, using facial recognition to pay electronically, while bags of groceries ordered by customers online float overhead on aerial conveyors.
Not to be outdone, JD, another big internet retailer in China, said in December that it had teamed up with a developer to build hundreds of its own unmanned convenience shops. The businesses put readable chips on items to automate the checkout process.
Back in the United States, Walmart, the world’s largest retailer, is testing the Bossa Nova robots in dozens of its locations to reduce some tedious tasks that can eat up a worker’s time. The robots, roll up and down the aisles looking for shelves where cereal boxes are out of stock and items like toys are mislabeled. The machines then report back to workers, who restock the shelves and apply new labels.
At 120 of Walmart’s 4,700 U.S. stores, shoppers can also scan items, including fruits and vegetables, using the camera on their smartphones and pay for them using the devices.