Retail giants like Amazon, Walmart, and other companies have altered the retail shopping experience forever by launching online shopping with delivery. In contrast, the brick and mortal retail experience which may appear to be an anachronism today has only seen incremental technological advancements in the store front by introducing technology such as self-service checkouts relying on bar code scanners. Walmarts attempt to use RFID technology as a a replacement for 2D barcodes over 15 years ago for tracking items has simply not succeeded. RFID is promising, but cannot overcome the hurdle of cost per tag on low cost items. Amazon, however, has made a breakthrough in the retail by opening an automated retail food store – Amazon Go in Seattle, Washington. Vision systems, sensor fusion, and deep learning are the technologies behind providing customers a cashier-less and checkout-free shopping experience. The use of vision technology, has been limited to primarily the industrial automation market where quality control, adaptive production, and 2D barcoding dominated the application range. The same vision technology widely used in industrial systems for robotic bin picking and inspection systems is proliferating in the consumer world. Access control systems, license plate reading for toll collections, and now retail are expanding the market fro vision technology. With the use of Vision System technology, Amazon has made the brick and mortar shopping experience even more convenient than online shopping. You don’t even have to check out.
Vision Systems at Amazon Go Store
Amazon Go store functions with the help of hundreds of cameras, computer vision algorithms, and machine learning. Customers must scan a Quick Response code from their Amazon Go app to gain access to the store. Once the customers enter through the gate, cameras and sensors track and recognize the products picked and add them to their virtual shopping cart. If any of these products is put back on the shelf, the system removes it from the virtual basket. The store doesn’t have any cashiers or registers; as customers leave the store, their Amazon account automatically gets charged for what they have carried outside the door. Amazon calls this- “Just Walk Out” technology, which enables customers to skip long queues and checkout hassles.
Amazon Go Store
Vision Systems to Revolutionize the Retail Sector
Vision technology has undergone a dramatic boom with growing number of applications in automotive, sports and entertainment, robotics and machine vision, medical, and security and surveillance areas. The technology helps computers recognize objects with greater accuracy and reliability, and has replaced quality inspection performed by humans. Integration of vision cameras with deep learning in retail stores enables them to keep a track of customer’s buying pattern as well as use this information to tailor product offerings, pricing strategies, and merchandising placements. It also facilitates real-time inventory management. Given the breadth of the technology, it is certainly a game changer for retailers to give customers a seamless experience. Not only does it eliminate long queues and payment hassles for customers, but it also cuts down the labor cost for retailers in the current scenario of high labor cost and scarcity. Retailers are challenged to constantly find ways to delight their customers and strengthen loyalty to stay competitive. Vision systems benefit retailers in mastering the art and science of customer engagement.
Amazon’s futuristic “grab and go” store is a significant growth driver for the vision market. The company has many retail outlets; the acquisition of Whole Foods in 2017 provides an opportunity to deploy the technology in over 475 locations. Using the technology, Amazon will have a significant margin improvement by elimination of point of sales clerks. This is a significant competitive advantage in the low margin grocery business. Cost savings in the operations of these retail stores by adopting “Just Walk Out” technology is clear. Amazon has a history of keeping technology in house as demonstrated with the Kiva acquisition in 2012. Kiva’s material handling solutions revolutionized distribution centers, however Amazon has decided to keep the technology for their own distribution centers and terminating support for Kiva installations before the acquisition. Other retailers will certainly want to embrace the technology deployed in the “grab and go” stores. Amazon will be the guiding light for the industry to follow, not the savior. Other technology providers will certainly emerge with comparable solution to enable retailers to automate their stores. In the long run this helps them ensure greater customer engagement and satisfaction, and contributes to the overall growth of the vision technology market. Who knows, online shopping may incur a speed bump in growth as more retailers improve the shopping experience.
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About the Author:
Anju handles and works on discrete industry projects for ARC in the Bangalore office.
Anju’s experience includes six years in market research and one year in US taxation. Prior to joining ARC, she worked in areas such as power, battery energy storage, and engineered products and conducted market assessment and sizing and competitive analysis. Anju has closely tracked key developments and trends in the related areas and has authored syndicated global and regional reports.