'New Retail' - using AI to power checkout free stores

Tesco has announced plans to roll out check-out free stores, following a one-year trial at its head office Express store in Welwyn Garden City.

The new plans will enable some customers to shop without the need to use checkouts, with the aim of making their weekly shop faster and easier.

Instead of queuing at checkouts, customers will simply scan items as they go and upon leaving, will be automatically charged only for the items they are taking.

Tesco already has a self-scan offering in place in 573 stores, as do Sainsburys, Asda and M&S, but all still require a visit to a dedicated checkout, albeit with purportedly shorter queues.

This concept follows in the footsteps of Amazon Fresh “just walk out” stores which have opened in several London locations, with the company announcing plans to open more in the future.

Amazon has described its approach as a more "frictionless" experience than other retailers, with shoppers only needing to place an item in a bag or carry it out of store to be charged – no scanning required.

The retail giant is confident in the ability of its tech that shoppers are not under any obligation to check all the items have been accounted for. As the world’s largest online retailer, Amazon has yet to dominate the grocery industry but this expansion could be a sign of its intention and a wakeup call for UK grocery retailers to catch up and invest in their technology and store experience.

Covid-19 led to increased demand for self-scan supermarket shopping in the UK, with Sainsburys reporting that sales through SmartShop have exceeded 50% in some stores and 37% of total sales across the retailer in Q2 2020/21.

Tesco uses AI (artificial intelligence) to power its checkout-free stores, but one retailer truly maximizing the power of AI to enhance the supermarket store experience is Chinese internet giant Alibaba, which has developed a supermarket concept it describes as “New Retail.”

Bringing to life futuristic concepts, the offering extends way beyond a checkout-free store to encompass facial recognition payments, personalized food recommendations and barcodes showing product provenance and sourcing information.

If all of this seems far too futuristic for the traditional shopper, it’s worth pointing out that this all sits amongst the typical supermarket counters containing fresh produce, meat and fish, all served by smiling members of staff. An empty, digital-only store this is not.

Alibaba now operates more than 200 Freshippo supermarkets across China, which all act as super high-tech supermarkets and online fulfilment centres. The speed and efficiency is second to none – all online orders within a 3km radius arrive within 30 minutes of a shopper completing their purchase.

This foray into bricks and mortar grocery shopping from China’s largest e-commerce retailer presents a state-of-the art, seamless “phygital” retail experience, with Guo Xulin, chief of staff at Alibaba’s Freshippo Business Group saying, “Our vision for the future of retail was never digital versus physical, but to build the future infrastructure of commerce, one that seamlessly integrates online and offline.”

The business is already delivering high-tech convenience stores, breakfast pick-up stations and shopping malls.

Already years ahead, in 2018 Alibaba unveiled a pop-up Fashion AI Concept Store, which featured smart mirrors, personalized product suggestions and directions to items in store. Whilst the UK hasn’t quite caught up yet, it all makes for an exciting blueprint on the merging of the cross category digital and in-store retail experience.

Authored by Kate Hardcastle and first published in Forbes