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Future Of Autonomous Retail Store

The global pandemic has accelerated digitization with smart automation in most industries. With the help of emerging technologies like artificial intelligence, the internet of things, autonomous technologies, computer vision technologies and automation, among others, businesses have innovated to survive. More so in a customer-oriented industry like retail, where there is raging competition not only from online stores but from other brick-and-mortar stores as well. What can lead to an effective competitive advantage today is by focusing on customer experience and convenience. Autonomous stores help retailers gain this advantage as it enhances the customer experience store assistance and offers convenience by eliminating the need of standing in queues for a long period of time during checkouts.

What are these stores? Autonomous retail operations are brick-and-mortar stores that have integrated various technologies like IoT, computer vision, deep learning and sensor fusion, etc., that allows customers to simply walk in, select items off shelves and leave with minimal interaction with staff.

In January 2018, Amazon pioneered and popularized the concept of autonomous retail with their Amazon Go location in Seattle, which subsequently expanded to almost two dozen locations in New York, Chicago, San Francisco, and Seattle as of 2019. Is autonomous retail the shopping experience of the future? Let us find out.

Why Autonomous Retail Stores?

Autonomous retail stores are becoming quite sought-after as it not only engages the customers but also benefit the retailers. A lot of prominent retail stores are experimenting with this format, such as Nike’s Speed Shop, a customization studio that allows people to book shoe trials online and try those shoes kept in a dedicated locker that can be unlocked using their smartphones and bought through mobile checkouts. Kroger’s digital price tags is another example that displays nutritional information, pricing, video ads and coupons. It also adds an item by scanning it through your phones in the cart and runs on renewable energy. It helped Kroger's cut down overhead lighting and therefore reduce energy costs.

Customers now largely prefer Autonomous retail stores over traditional ones for the simple fact that it provides a seamless in-store experience resulting in less friction in the buying process. Research shows that in a traditional retail store, an average checkout process takes 3-8 minutes, whereas the self-service checkout takes about 90 seconds. That is a lot of time saved.

Customers have become extremely cautious of the safety and hygiene factors after the pandemic, due to which autonomous retail formats are seeing an accelerated adoption rate as they assist in providing a contactless shopping experience. Also, the technology helps gain valuable real-time insights about the customer preferences and provides them with a much more personalized experience catering to their needs, thereby increasing customer satisfaction.

Retailers are adopting autonomous retail technologies to provide a better shopping experience which has ultimately led to an increase the footfalls and brand loyalty amongst customers. These stores keep real-time track of all the stocks with latest technologies, making inventory management much more efficient and mitigating the risks of stock blackouts. Moreover, it offers insights into the product shelf-life and interactions with consumers. Retailers will make better purchasing decisions and reduce stock waste using these insights. Without the need for manual checkout kiosks, that space can be better utilized for displaying more products which in turn would increase sales. Since there is no checkout staff operating such stores, this allows retailers to operate the autonomous stores 24/7, which not only provides more convenience to the customers but also helps in increasing the revenue and significantly decreasing the costs for the retailers. Thus, increasing the overall store efficiency. The full-time camera monitoring systems allows retailers to identify and record activities like theft and damage of inventory. The camera systems would also detect people from their previous shopping activities who have been flagged by the system as shoplifters, potentially avoiding thefts and revenue loss.

It is the reason for autonomous stores’ quick rise to fame and why every retailer is adapting to make their stores partially/entirely autonomous.

Challenges

Even though we are seeing rapid adoption of this technology with all its positive impacts and benefits, it still bears a certain set of challenges. Customers are worried about their data privacy since technologies like computer vision which collect images, data, especially videos, can be easily misused. Therefore, retailers need to ensure that the shopper’s data is protected, and no harm comes to it. It would entail that they strictly comply with prevailing data privacy regulations.

Retailers are also concerned about the capital expenditure required at the start while embracing an autonomous-first solution. While initially, the expense will be significant, technological innovations, in consequence, expected to get good IRR.

Over and above, retrofitting existing stores with cameras or sensors is another major challenge for retailers, making it a time-consuming process because there is a need to remove all stock from shelves and then re-stock it. In addition, it is almost impossible to prevent shoppers from displacing products which can invariably confuse the sensors on the shelves.

Retailers must also be cautious about access management as certain products like alcohol will have restricted access to people within the permissible age group. To have such restricted access management requires additional considerations to the autonomous checkout process and in-store staffing model in autonomous retail stores.

Some resist the idea of autonomous retail stores as they fear it will lead to unemployment. Reports suggest that over seven million USA retail jobs could be replaced by automated kiosks and checkouts over the next decade. We believe that will not hold true because, in the case of ATMs, the machines did not fully replace the bank teller, nor did the cashiers disappear. Rather, the mundane tasks will be automated, and the skilled employees can focus on enhancing customer experience.

Technological Trends

  • Checkout-free retail: Retail stores are deploying technologies that enable customers to shop for items and simply carry them out of the store without needing to go through a checkout line. Some major retailers have already implemented these, while other retailers are catching up on this trend and partnering with other players who provide cashier-less checkout solutions.

    Automated self-checkout systems offer better operational efficiency and higher profit margins for merchants in addition to removing the greatest source of pain for customers. Businesses that engage in the development of self-checkout systems can free up human resources for higher value tasks like assisting and engaging customers, settling conflicts, inspecting inventory, etc. These data-driven insights can be utilized to develop a retail strategy and offer better, more individualized shopping experiences to a larger number of customers.

    Amazon Just Walk Out technology provides checkout-free retail: Just Walk Out delivers a great customer experience by eliminating lines, giving shoppers time back in their day and inventing a new standard for shopping in physical spaces. Through a combination of computer vision, AI, sensor fusion technology and more, a Just Walk Out enabled store allows a shopper to enter, grab the items they need and leave without having to interface with a checkout experience. Their payment method is subsequently charged, and a receipt is delivered post exiting the store.

  • Geolocation: Retail stores were always at a disadvantage as they didn’t have immediate access to rich customer data. Thus, there is no way to cross-sell, recommend new products, or target advertising. This is no longer the case with geolocation retailers as they can make up for the data deficit. Geolocation enables the prevention of fraud, optimizes in-store customer experience, personalizes customer interactions and rapid course corrections.

    Some prominent use cases:

    • Beacon-powered smart shelves: It uses a radio frequency identification reader (RFID) that scans the targeted items on the shelf and then notifies the backend system of the items placed on the shelf. It allows a better understanding of customer demands and preferences.
    • Location-based promotional offers and reviews of nearby products.
    • Store Navigation: The application expected to guide and navigate customer to reach target shelf in a given store based on commodities. That’s what Major League Baseball is doing in some of its stadiums, with its app being used as a navigation tool that helps people find their seats using their phones.
    • Combining the location of a customer with "in-the-moment" feedback to produce more detailed performance and satisfaction data that aids in creating a "heat map" of the company's entire enterprise that would help identify issues or opportunity areas at various points throughout the customer journey.

Infosys Autonomous System Platform STALLY (Store Ally) for store navigation: An autonomous, cost-effective, versatile, and scalable platform for optimized retail applications. Smart Ally provides multi-modal in-store assistance to help customers in finding product locations and in-store navigation. It covers digitizing store maps and planograms, a mobile app to search for placement of a product or list of products in a shopping list, an autonomous cart capable of planning optimal routes covering all product locations and guiding and self-navigation capabilities.

What it yields:

  • Greater customer experience
  • Effective shopping with ample quantity of products and no wastage of time in searching for them
  • Opportunities to provide promotions and improve customer footfall coverage around the store
  • Opportunities to improve sales by providing valuable statistical insights

  • Smart shelves: Smart shelves equipped with RFID readers would continuously monitor items on the shelves and trigger alerts in the backend system for item replenishment. These shelves aid in tracking misplaced items, help with dynamic pricing and promotions and enables cross-selling of products. A major use case here is identifying items which need to be ordered by integrating smart shelves with an inventory management system. There is also an application of weighted shelves that will augment the capabilities of smart shelves and provide accurate product analytics. There are several startups in the market working on this technology and providing fascinating opportunities to retailers.

    Sam’s Club is a membership-only retail club owned by Walmart that has recently opened in Dallas. Here, members can try technologies like electronic shelf labels, which would instantly update prices. It also comprises camera systems that help the club to manage inventory and optimize the layout to make shopping effortless.

  • Dark Stores: During the pandemic, industry research revealed that 49% of shoppers were focused on product availability compared to quality or price. It signified a change in the interest of customers and created a demand for dark stores. Essentially, a dark store is a retail space to complete online orders for consumers and not for in-store shopping.

    Several shopping malls, grocery stores and big box retailers such as Walmart are exploring mini dark fulfillment centers, while grocery chains are evaluating a semi dark or hybrid approach where customers place their orders online for pickup while still roaming the aisles. The concept of dark stores is gathering momentum with technology making them a compelling proposition for retailers to use as fulfillment centers. Walmart has also unveiled a grocery-picking robot named Alphabot. Automated grocery systems like Alphabot are estimated to pick and pack orders as much as 10 times faster than a human. It could enable Walmart to rapidly expand its capacity for orders as demand for online grocery services grows. Inside the Alphabot facility, about 30 small, cubic robots wheel around inside the giant shelving system, picking and packing from a selection of 4,500 different products.[5]

  • Autonomous delivery: Autonomous delivery robots are wheeled vehicles that can use GPS navigation, sensors, 360-degree camera vision, and other tools to find a customer's position and make the delivery. Customers can track the delivery robot's location and open any safe compartments containing their purchases using an app that vendors supply.

How can we help Retailers make Autonomous Stores?

Infosys and AWS have been striving towards the vision of creating a unified shopping experience by leveraging emerging technology-led offerings like conversational user interface, machine vision-driven customer tracking, facial biometrics, in-store analytics etc. Please refer to Figure 1.0: Infosys Capabilities platform for retail for more understanding of Autonomous Store offerings.

Let us have a look at a few of these capabilities below helping retailers adopt a fully Autonomous Store:

  • Extended Store for Retail: The Infosys Retail practice introduces Extended Store, an app that combines the convenience of contactless commerce with the personal touch of shopping at the retail store. It enables seamless and convenient shopping with a zero-touch journey and accelerated checkout. Refer to Figure 2.0: Infosys Extended Store for the features provided by Infosys Extended Store.
  • Machine Vision Driven Customer Tracking: Machine vision powered by store CCTV cameras enables the retail outlet to identify customers, track their movement and provide contextual assistance based on real-time need assessment.
  • Amazon Dash Carts: Amazon Dash Carts are smart grocery carts that allow shoppers to add items to their cart throughout the shopping journey and then seamlessly leave the store at the end of the trip, skipping wait times and lines. Items are identified through a combination of computer vision, AI, and the carts know when they’re leaving the store based on location, which will prompt the checkout process. [10]
  • Amazon One: Amazon One simplifies everyday interactions. It's a free, contactless service that lets you use your palm to pay, enter, or identify yourself. [11]

AWS X Infosys collaboration

AWS has various technologies supporting fully autonomous as well as partially autonomous stores like the Amazon Just Walkout (JWO), Amazon Dash cart, etc., which they have already deployed in its Amazon Go stores and is looking to scale these technologies across the globe by collaborating with retailers. The only challenge faced is that each retailer has its backend systems, discounts and loyalty programs, and customized mobile apps. Hence, these systems differ from retailer to retailer. Customizing the technology to be integrated into such different systems of each retailer requires the capabilities which Infosys provides.

Amazon JWO must be customized to integrate and utilize these heterogeneous existing systems. This calls for developing a scalable, robust, and reusable mechanism which can seamlessly onboard retailers and integrate with their native backend systems. Such a mechanism will lead to scaled adoption of Amazon JWO to physical stores and accelerated time to market with lower effort and cost. Infosys has started its journey to build these adapters in collaboration with Amazon and has selected its retail counterpart, Infosys Equinox, as the initial retail partner for integration.

Conclusion

With such advancements in technologies like computer visions and easier availability of sensors; It has paved way to emerging trends like checkout free retail, dark stores etc. This is the era for retailers who would be able to gather much more efficient insights and understand customer behavior within their stores using the mentioned emerging technologies aiding autonomous stores. These would help the stores achieve a seamless experience which will help in successfully building brand loyalty and creating customer mindshare. With the retail environment shifting from product-centricity to customer-centricity, it is important to provide an innovative way for retailers to stay relevant and meet customer demands through autonomous retail stores.

References

Authors

  • Allison Ortiz,
    Global Partner Leader & Industry Head, Amazon Web Services (AWS)

  • Guruprasad NV,
    AVP - Senior Principal Technology Architect, Infosys

  • Dr. Ravi Kumar G. V. V,
    AVP - Senior Principal - Advanced Engineering, Infosys

  • Bhoomi Shah,
    Senior Associate Consultant, Infosys

  • Amrita Mishra,
    Specialist Programmer, Infosys

  • Dr. Sreekanta Guptha BP,
    Principal - Advanced Engineering, Infosys

  • Balamuralidhar Maringanti,
    Principal Product Architect, Infosys