Three Takeaways on Checkout-Free Retail

Frank Beard shares insights from a recent visit to a concept store by Standard Cognition.

November 13, 2018

There’s a lot of retail innovation taking place in San Francisco, and I don’t just mean Amazon Go. Located in the heart of the city is Standard Store—a concept store created by Standard Cognition to showcase and refine their checkout-free technology.

I recently stopped by to experience it for myself. Like Amazon Go, it’s a true checkout-free experience that uses cameras to track everything customers take. The sign outside the store describes the experience quite well: “Walk in. Take things. Walk out.” Unlike Amazon, however, Standard Store relies on far fewer cameras and does not employ pressure-sensitive shelving.

Rather than operating their own stores, Standard Cognition’s goal is to work with existing retailers. They’re also gaining valuable experience by deploying the system in Japan’s retail market. Standard Cognition is working with Japanese wholesale and logistics company Paltac since there’s currently a labor shortage, reports Nikkei Asian Review. They’ve also set an ambitious goal of equipping more than 3,000 Japanese stores with the system by the summer of 2020.

A few weeks prior to my visit, I had a chat with Michael Suswal—co-founder and chief operating officer. Here are three takeaways:

1. Cash and credit are still welcome
Standard Cognition offers two ways to pay for your products. First, tech-savvy customers can download the app and “check in” when they arrive. When they’re finished shopping, they walk out and the receipt is sent to their phone.

Second, those who don’t want to use the app can walk in the store and shop like normal. When they’re ready to leave, they’ll approach a kiosk that populates the screen with everything they took. Instead of wasting time scanning items, they just swipe a card or insert cash. It’s quick and simple.

“We’ve found zero retailers who said they won’t take cash or credit cards anymore,” says Suswal. “Amazon can do that because they have their own stores. But if we deploy our system to other retailers, then we have to accept other forms of payment.”

For those who wish to see the kiosk system in action, it will be installed in Standard Store in the upcoming weeks.

2. Deploying flexible solutions
Amazon Go famously uses pressure-sensitive shelving, but Standard Cognition takes a different approach.

“How do you want to deploy to the world?” asks Suswal. “Amazon answers that question by saying ‘we have the tech, so let’s build stores around it.’ Our view is that there are millions of stores in the world. How can we simply retrofit them? When you approach the problem from that perspective, you get a number of differences.”

Suswal says the system must be flexible. Pressure-sensitive shelving would conflict with retailers’ merchandising and branding strategies by creating an experience that resembles every other store utilizing the technology. “You can’t be flexible with shelf sensors,” he says. “With our system, it’s a very different implementation. Just cameras on the ceiling. That’s it.”

Standard Cognition also aims to be economical regarding hardware requirements. Many retailers—both large and small—may lack the space for extensive computer equipment.

Suswal explains that some of the stores they work with in Japan only require four desktop towers. “As we get more optimized and more efficient with our code,” he says, “we can shrink the compute size even further.”

3. Rehumanizing retail
It’s a common misconception that checkout-free retail is the same as employee-free retail, but that’s false. Every time I’ve visited Amazon Go, for example, there are many employees. They’re free to do everything they wouldn’t have time to do if they were stuck behind a counter scanning items.

Suswal says one of Standard Cognition’s goals is to “re-humanize” retail. By removing the machines that exist between people, we can interact in a more human way—much like we did hundreds of years ago in open-air markets.

“Retailers all around the world reach out, and the thing they talk about most is customer experience. How can we create experiences that get people to come into the store? How can we make our stores better or more unique?”

But that’s difficult to do when employees waste time on tasks that can be automated—like inventory management. Suswal describes a grocer who, despite having hundreds of stores, still sends staff armed with clipboards to count the items on shelves.

Checkout-free retail makes it possible to fully track and monitor inventory. In fact, one of Standard Cognition’s products is an analytics platform aptly titled Standard Analytics. As Suswal explained, many of the company’s founders previously worked for the SEC building platforms to identify fraud in the stock market. Only now they’re turning that passion into insights for store operators.