Paying in-app or on the handle of a shopping cart could be the future of making purchases at physical stores if some technology companies and retailers succeed in their partnerships.
The technology providers, which exhibited their technologies at the National Retail Federation's 2019 Big Show in New York, began developing their systems before Amazon.com Inc. opened its first Amazon Go store in Seattle in January 2018. But many say that major retailers have become more interested in their offerings as a result of Amazon's push into physical retail.
A demonstration of AiFi's NanoStore stands at the National Retail Federation's 2019 Big Show in New York. (Photo: AiFi)
Some startups are focusing on building small stores and kiosks reminiscent of Amazon Go. Santa Clara, Calif.-based AiFi has developed a store the size of a small shipping container that allows customers to enter by swiping a credit card or scanning in using an app. When they leave, sensors within the store note which products are gone from shelves and debits shoppers' accounts accordingly.
The stores, which do not have to be attended by employees, can function at any time of day and can either augment existing stores or allow retailers to push into new areas, said Steve Gu, AiFi's co-founder and CEO. The company has agreed to build stores for Polish convenience store operator Zabka Polska sp. z o.o.
The model makes sense for locations that retailers want to reach but where "unit-economics wise, it doesn't make sense" to employ someone, Gu said in an interview.
Other startups' technologies focus on changing the checkout process at existing stores. Grocer The Kroger Co. signed an agreement Jan. 13 with Boston-based OneView Commerce to provide back-end technology that can be used to run checkouts, whether on smartphones or other devices.
At traditional grocers, registers and other elements of checkout lanes require maintenance, said Linda Palanza, CEO at OneView. Moving checkout to consumers' mobile devices eliminates much of that cost — an especially appealing prospect for retailers with narrow profit margins such as grocery stores, she said.
"I can eventually eliminate these things that I'm paying for year after year," Palanza said in an interview.
OneView is the latest technology company that Kroger has partnered with. In 2018, the Cincinnati-based grocer said it would work with Ottawa-based Edgewater Wireless Systems Inc. to connect cameras, on-shelf screens and other in-store technology.
While Kroger has developed some of its technology in-house, the OneView deal will allow Kroger to start making changes to the checkout right away, Palanza said. Since Amazon began unveiling its first Amazon Go stores, interest in OneView's technology has spiked.
Savings on personnel are also a factor for retailers, TS Lombard Chief U.S. Economist Steven Blitz said at the National Retail Federation's Big Show.
"The cost of that checkout has gotten pushed down to the customer to do it as opposed to hiring somebody to be a cashier," Blitz said.
New York-based Caper, meanwhile, sells shopping carts with screens that allow customers to scan items as they put them into the basket. Once finished, shoppers can pay for their purchases using a card reader integrated into the shopping cart.
Working with two New York-based retailers, Foodcellar and Gala Fresh, Caper's goal is to improve its technology and ultimately debut carts that can sense what customers place in them.