Retailers Race Against Amazon to Automate Stores
JD and Alibaba both plan to sell their systems to other retailers and are working on additional checkout technologies.
Back in the United States, Walmart, the world’s largest retailer, is testing out the Bossa Nova robots in dozens of its locations to reduce some tedious tasks that can eat up a worker’s time. The robots, which look like giant wheeled luggage bags, 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 American stores, shoppers can also scan items, including fruits and vegetables, using the camera on their smartphones and pay for them using the devices. When customers walk out, an employee checks their receipts and does a “spot check” of the items they bought.
Kroger, one of the country’s largest grocery chains, has also been testing a mobile scanning service in its supermarkets, recently announcing that it would expand it to 400 of its more 2,700 stores.
New start-ups are seeking to give retailers the technology to compete with Amazon’s system. One of them, AiFi, is working on cashierless checkout technology that it says will be flexible and affordable enough that mom-and-pop retailers and bigger outlets can use it. In the United States, venture capitalists put $100 million into retail automation start-ups in each of the past two years, up from about $64 million in 2015, according Pitchbook, a financial data firm.
“There’s a gold rush feeling about this,” said Alan O’Herlihy, chief executive of Everseen, an Irish company working with retailers on automated checkout technology that uses artificial intelligence.
While such technologies could improve the shopping experience, there may also be consequences that people find less desirable. Retailers like Amazon could compile reams of data about where customers spend time inside their doors, comparable to what internet companies already know about their online habits.
“It’s combined with everything else Amazon might know about you,” said Gennie Gebhart, a researcher at the Electronic Frontier Foundation, an online civil liberties organization. “Amazon knows what I buy online, what I watch and now how I move around a space.”
In China, there is less public concern about data privacy issues. Many Chinese citizens have become accustomed to high levels of surveillance, including widespread security cameras and government monitoring of online communications.
Depending on how heavily retailers automate in the years to come, job losses could be severe in a sector that has already experienced wave after wave of store closings by the likes of Macy’s, Toys “R” Us and Sears.
Retailers are playing down the threat to jobs. Walmart, the largest private employer in the United States, says that it does not anticipate automation will lead to job losses, but rather that the new technologies are meant to redirect employees to spend more time helping customers find what they need.
“We see this as helping our associates,” said John Crecelius, vice president of central operations at Walmart. “We are a people-led business that is technology enabled.”
Some traditional retailers are also skeptical about whether the sort of automation in Amazon Go can move to large stores. They say the technology may not work or be cost effective outside a store with a small footprint and inventory.
“That’s probably not scalable to a 120,000-square-foot store,” said Chris Hjelm, executive vice president and chief information officer at Kroger.
But he said it was just a matter of time before more cameras and sensors were commonplace in stores. “It’s a few years out,” he said, “before that technology becomes mainstream.”
News credit : Nytimes