Business

Supermarkets grapple with checkout-free stores

A small area of ​​London’s Holborn borough busy with office workers and shoppers has become a testing ground for supermarket chains.

J Sainsbury’s on Monday became the latest to open a cashless store in the region and the first in Europe to license Amazon’s “just go out” technology for its own use. A few days earlier, Amazon opened its own checkout-free store on the same street. Tesco has one nearby.

This is Sainsbury’s second attempt at such a store at the same location. The grocery store abandoned its first try in three months in 2019 because customers were “not ready” for the change.

But the Covid-19 pandemic has helped accelerate the long-standing shift from cash to card transactions and stimulated renewed interest in store automation technology.

The first Amazon Fresh store in the UK Open in March and the company, which now has eight of them, poached former Tesco athlete Tony Hoggett to help accelerate the rollout of its fresh food operation in the UK.

Tesco and Sainsbury’s each opened a store, and both said they would evaluate customer feedback before moving on.

Customers need a QR code to enter a Sainsbury’s store, but when they’re not in the store there’s no need to scan; Shoppers simply put the items in a bag and step out. A combination of weight sensors, motion detectors, cameras and software identifies what items a customer has taken or returned. The card linked to their account is automatically billed when they leave the store.

For its latest effort, Sainsbury’s is using various systems provided by Amazon – the first time its technology has been installed by a third party outside the US, and the first time it has been equipped with add to an existing store.

Sainsbury’s said it chose the Holborn location because it’s primarily focused on providing takeout food and drink to local office workers looking to get their shopping done quickly.

An Israeli retail technology company, Trigo, supplied the cameras, sensors and software powering the Tesco Get Go store on the same street, which opened in October. It also installed them at a Cologne branch of Rewe, the German supermarket chain.

Michael Gabay, co-founder and chief executive officer of Trigo, said the company already has contracts to install “hundreds” of stores across Europe over the next few years, initially in urban areas.

But he predicts the technology will also be used in rural areas, where retailers often struggle with the costs of running staffed stores. “It’s going to be huge.”

Customers need a QR code to enter a Sainsbury’s store, but when they’re not in the store it doesn’t need to be scanned

He said the technology used in all stores is very similar and its benefits include more data and better inventory management as well as eliminating queues.

Some customers are still unconvinced.

On the opening day of Sainsbury’s store, there were more employees than customers. Maria Rus, a student, picked up a flyer but crossed the street to a traditional branch. “I went inside [the autonomous store] to see because it was a good idea,” she said, “but I couldn’t find what I wanted.”

An 83-year-old man turned away after the concept was explained. “I have never owned a smartphone in my life,” he said.

Meanwhile, another customer, Stepan Lavrouk, said he has visited the Tesco store about 10 times since it opened last month. “Apart from the general creepy with the constant monitoring tools, it was pretty good,” he said. “I already have the Tesco app. Once you figure out how it works, it’s easy. ”

Responding to privacy concerns, Gabay said: “We blur the faces of everyone in the stores and we don’t store any of their personal details. All are anonymous. ”

Vasco Portugal, co-founder and chief executive officer of Sensei, another retail technology group, says the payback period for the technology is relatively quick.

“You can see a return on your investment in about a year,” he said, although this depends on store density, the nature of the products sold, and the number of autonomous stores deployed.

Portugal believes that “people are grasping the concept for the first time” but over time will “get used to making purchases without queuing”, with autonomous or hybrid stores becoming popular than.

Sonae, a Portuguese conglomerate, began testing Sensei’s technology at one of the Continente convenience stores in Lisbon in May.

Retailers protested the idea that the pilotless checkouts were an exercise in cost-cutting, pointing to the overwhelming cost of shopping and the number of employees still patrolling aisles to help customers. customers using technology or verifying age-restricted alcohol and drug purchases.

But in an industry that employs millions of hourly employees and has been hit hard by minimum wage laws, the long-term allure of being able to run stores with fewer people is more clearly.

That assumes that the client accepts the concept. Of the three autonomous stores in Holborn, Amazon Fresh was the busiest – thanks in part to offering customers a £10 free credit.

Chloe Konstantinides, another shopper, said she was “honest here with £10 free”. “It saves a bit of time but I wouldn’t say I loved it. It’s a bit personal. The way they get rid of people feels a bit unnecessary.”

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