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retail automation

Retailers Race Against Amazon to Automate Stores

A global race to automate stores is underway among several of the world’s top retailers and small tech startups. The motivation is easy – to shave labor costs and to add efficiency.

Amazon has set up Amazon Go, a cashier-less experimental convenience shop in cities like Seattle and San Francisco. The opening in January alarmed many retailers, who saw a sudden willingness by Amazon to wield its technology power in new ways.

Startups are now seeking to give retailers the technology to compete with Amazon. According to Pitchbook, in the US, venture capitalists put $100 million into retail automation startups in each of the past two years. One of those companies, AiFi, is working on cashier-less checkout technology that it says will be flexible and affordable enough that mom-and-pop retailers and outlets can use it. Other companies are testing robots that help keep shelves stocked, as well as apps that let shoppers ring up items with a smartphone.

In the US, 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 roll up and down the aisles looking for shelves where cereal boxes are out of stock and items like toys are mislabeled. At 120 of Walmart’s 4,700 stores in the US, shoppers can also scan items using the camera on their smartphone and pay for them.

China, which has its own ambitious e-commerce companies, is emerging as an especially fertile place for these retail experiments. To be frank, right now, nowhere are retailers experimenting more avidly with automating store shopping than in China.

One effort is a chain of more than 100 unmanned convenience shops from a start-up 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’ve paid through their phones.

Alibaba 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, headed to a loading dock for delivery to shoppers.

“There’s a gold rush feeling about this,” said Alan O’Herlihy, CEO of Everseen, an Irish company working with retailers on automated checkout technology that uses AI. But alongside this gold rush, there are increasing concerns about security. While retail’s next frontier promises to improve the shopping experience, it could also bring retail job loss and consumer privacy abuse.