All posts in “retail”

Inside Amazon’s surveillance-powered no-checkout convenience store

By now many have heard of Amazon’s most audacious attempt to shake up the retail world, the cashless, cashierless Go store. Walk in, grab what you want, and walk out. I got a chance to do just that recently, as well as pick the brain of one of its chief architects.

My intention going in was to try to shoplift something and catch these complacent Amazon types napping. But it became clear when I went in that this wasn’t going to be an option. I was never more than a foot or two from an Amazon PR rep, and as Dilip Kumar, the projects VP of Technology, convinced me, they’d already provided against such crude attacks on their system.

As you might have seen in the promo video, you enter the store (heretofore accessible to Amazon employees only) through a gate that opens when you scan a QR code generated by the Amazon Go app on your phone. At this moment (well, actually the moment you entered or perhaps even before) your account is associated with your physical presence and cameras begin tracking your every move.

The many, many cameras.

  1. OLYMPUS DIGITAL CAMERA

  2. OLYMPUS DIGITAL CAMERA

I wondered when the idea of Amazon’s cashierless store was first proposed how it would be accomplished. Cameras on the ceiling, behind the display cases, on pedestals? What kind? Proximity and weight sensors, face recognition? Where would this all be collated and processed?

Amazon’s approach wasn’t as complex as I expected, or rather not in the way I expected. Mainly the system is made up of dozens and dozens of camera units mounted to the ceiling, covering and recovering every square inch of the store from multiple angles. I’d guess there are maybe a hundred or so in the store I visited, which was about the size of an ordinary bodega or gas station mart.

These are ordinary RGB cameras, custom made with boards in the enclosure to do some basic grunt computer vision work, presumably things like motion detection, basic object identification, and so on.

They’re augmented by separate depth-sensing cameras (using a time-of-flight technique, or so I understood from Kumar) that blend into the background like the rest, all matte black.

The images captured from these cameras are sent to a central processing unit (for lack of a better term, not knowing exactly what it is), which does the real work of quickly and accurately identifying different people in the store and objects being picked up or held. Picking something up adds it to your “virtual shopping cart,” and you can pop it in a tote or shopping bag as fast as you like. No need to hold it up for the system to see.

This is where the secret sauce is, Kumar told me, and I believe him. As banal a problem as it may seem to determine which similarly dressed person picked up which nearly identical yogurt cup, it’s very difficult to get right at the speed and accuracy level needed in order to base an entire business on it.

A student, after all, with the resources available these days, could probably design a version of this store in a few weeks that would work 80 percent of the time. But to get it right 99.9 percent of the time, frictionlessly and instantly, is a challenge that requires a great deal of work.

Notably, there is no facial recognition used (I asked). Amazon perhaps sensed early on that this would earn them rebuke from privacy-conscious shoppers, though the idea of those people coming to this store strikes me as unlikely. Instead, the system uses other visual cues and watches for continuity between cameras — you’re never not in sight of a lens, so it’s easy for the system to see a shopper move from one camera to another and make the connection.

Should there be a technical problem with a camera or it gets sauce on its lens somehow, the system doesn’t break down entirely. It’s been tested with cameras missing, though naturally it wouldn’t be long before a replacement is put in place and the system re-re-calibrates.

In addition to the cameras, there are weight sensors in the shelves, and the system is aware of every item’s exact weight — so no trying to grab two yogurts at once and palm the second, as I considered trying. You might be able to do it Indiana Jones style, with a suitable amount of sand in a sack, but that’s more effort than most shoplifters are willing to put out.

And, as Kumar noted to me, most people aren’t shoplifters, and the system is designed around most people. Building a system that assumes ill intent rather than merely detecting discrepancies is not always a good design choice.

There is in fact a human in the loop should the system find itself in a bind, but Kumar said this was rare enough that it hardly needed to be considered. He also said that the difficulty of monitoring the store doesn’t increase with square footage, though of course you’ll need more cameras and more processing power.

It’s also been tested with serious crowds; we were there during a slow time in the mid-afternoon, but shortly before that was the lunch rush, they told me, when dozens rather than a handful of people could be found walking in and out without doing anything more than showing their phone to a sensor at the entrance.

There may not be cashiers, but there are staff: stockers who replenish inventory; an ID checker (and erstwhile sommelier I’m sure) in the wine and beer section, and chefs in the back throwing together fresh sandwiches and meal kits. Someone also hovers in the entrance area to help people with the app, answer questions, and take returns.

The selection was mainly grab-and-go lunches and snacks, with the usual handful of household items you grab at the bodega on the way home. Prices were what you’d expect at a supermarket rather than a convenience store, though.

As for the expected Amazon gambits that leverage its existing properties and hooks, few are to be found. The app is self-contained, and your purchases are tracked there rather than on your “main” Amazon account. Prime members don’t get lower prices. Whole Foods has a little section of its own but there’s no broader partnership (and no plans to convert any of those stores to Go, though I can’t imagine why not).

Overall I’m impressed with the seamlessness of the system, and I can see these things successfully operating here and there.

On the philosophical side, I’m troubled, of course — a convenience store you just walk out of is a friendly mask on the face of a highly controversial application of technology: ubiquitous personal surveillance.

It’s a bit overkill, I think, to replace a checker or self-checkout stand with a hundred cameras that unblinkingly record every tiny movement. What’s to gain? 20 or 30 seconds of your time back? Lack of convenience has hardly been a complaint for this market — it’s right there in the name: “convenience store.”

Like so many ways companies are applying tech today, this seems to me an immense amount of ingenuity and resources being used to “solve” something that few people care about and fewer still consider a problem. As a technical achievement it’s remarkable, but then again, so is a robotic dog.

The store works — that much I can say for it. Where Amazon will take it from here I couldn’t say, nor would anyone respond meaningfully to my questions along these lines. Amazon Go will be open to the public starting this week, but whether anyone will find it to be anything more than a novelty is yet to be seen.

Natural home products startup Grove Collaborative bets niche wins over the Amazonization of everything


Who needs Amazon when you can make your own online distribution channel? At least, that’s the idea behind Grove Collaborative, a natural home care products company that ships natural cleaning brands like Method and Mrs. Meyer’s.

Co-founder Stuart Landesberg started the company in 2014 after working with retail brands during his time as an investor at TPG. He noticed how limited shelf space was for brands in brick-and-mortar stores and the idea came to him to launch a tech company that could help move products by prompting consumers to buy at the ideal time. The company pivoted to online retail products in 2016 and rebranded itself as Grove Collaborative.

But consumers have a lot of choices in this space and the brands offered through Grove could just as easily get to your door through same-day shipping on Amazon.

As unlikely as it seems a customer would turn to Grove when there’s the convenience of Target or Amazon, Landesberg tells TechCrunch the company has raked in “tens of millions of dollars” in revenue and that it has “hundreds of thousands” of active customers. He also says more than half of Grove’s customers have never shopped natural before.

Still, he admits there’s no special sauce here. The company is not trying to compete with lower prices and it offers similar prompts as Amazon to re-up supply when you’re likely to be out. But he says the difference is incumbents often prioritize profit over customers and environmental health.

Those numbers also look promising and VC’s have been eager to support Grove on its journey. The startup just pulled in $35 million in Series C funding led by Norwest Venture Partners. The funding comes right on the heels of a $15 million Series B, which quietly closed last March and was led by Mayfield VC.

The primary use of the funding will go toward marketing, which Landesberg told TechCrunch is mostly through influencers such as health bloggers and YouTube personalities with a following in the space.

The startup will also use some of that money to build out new offerings from the main Grove brand, which include items such as hand sanitizer, essential oils, moisturizers and natural sponges.

“Families want to make safe, sustainable, informed choices, and that’s how e-commerce can catalyze real progress,” Landesberg said. “This funding allows us to bring natural products to more homes, and help us build a brand that can serve our community unconstrained by the realities of offline sales.”

E-commerce startup citiesocial raises $2.75M led by Alibaba’s fund for Taiwanese entrepreneurs


Citiesocial, a Taipei-based startup that helps emerging brands break into Asia’s e-commerce market, has raised $2.75 million led by Alibaba Taiwan Entrepreneurs Fund, a non-profit backed by Alibaba Group to support local startups. CDIB Capital and returning investor Cherubic Ventures also participated. The capital will be used to expand citiesocial into China, South Korea and Japan this year through strategic partnerships.

Citiesocial differentiates from other online retail businesses by focusing on young companies with innovative or unusual products that see an opportunity in Asia, but need help getting there. Launched in 2011 as a group buying site, citiesocial now has 600,000 users in Taiwan and Hong Kong. According to the company, Asian consumers are more adventurous about trying new things than their counterparts in the United States, but the problem is that many emerging brands don’t know how to cross cultural barriers or worry about getting lost on major e-commerce platforms. Citiesocial, which currently manages sales for about 2,000 brands and more than 60,000 products, serves as a fixer, helping with branding, marketing and customer support.

In a press statement, Alibaba Taiwan Entrepreneurs Fund executive director Andrew Lee said “We have witnessed a trend of Asian consumers, especially in Mainland China, increasingly seeking out products that let them express their own individuality. This is why we have chosen to partner with citiesocial. They have shown us that they have the grasp and capability to fully address these trends.”

The company’s most important verticals are home items, including appliances, kitchenware and furnishings; consumer tech accessories and peripherals; and lifestyle items, like bedding and organization products. Examples of companies it has worked with include travel jacket maker Baubax, which sold more than 1,000 jackets during its first two weeks on citiesocial, and men’s accessories brand Vanacci, which says about a quarter of its sales now come through citiesocial’s site.

Citiesocial works with about 150 social media “influencers” to help products get exposure in Asia and localizes marketing material, including social media pages and video. It also takes care of sales, cross-border logistics, customer support, sales forecasting and inventory management.

“For a large percentage of the brands we work with, we are their only retail partner in Asia and there are clear reasons for that,” Citiesocial spokesperson Matt Ryan told TechCrunch. “Emerging brands don’t have a lot of resources, in terms of personnel, time and money. A lot of the time they come from a design background and have little experience with the retail or marketing site. This means they need some fostering and TLC from us.”

Featured Image: Citiesocial

Rubikloud scores $37 million investment to bring intelligence to retail industry


The retail industry is one that’s rife for disruption by technology. Under intense pressure from giants like Amazon and Walmart, retailers are often stuck using legacy systems and are ill-equipped to compete using the latest tools. Rubikloud announced a $37 million investment today to help retailers attack the modernization problem with cloud tools built with artificial intelligence underpinnings.

The round was led by Intel Capital with participation from new investors Inovia Capital and OTEAF along with previous investors Horizons Ventures and Access Industries. Today’s investment brings the total to $47 million, according to the company.

Intel in particular is trying to get a foothold inside of retail where they hope to promote their Internet of Things strategy. They believe that by combining their IoT knowledge with Rubikloud’s intelligent automation and data processing, it will generate a powerful partnership. For starters, they hope to attack three areas of retail with this approach including the supply chain, the corporate front office and inside stores themselves.

Rubikloud offers a series of SaaS products including a promotions tool and a customer lifecycle manager to help retailers provide more personalized promotions and track their customers through the entire retail lifecycle. They also offer a couple of more nuts and bolts tools including RubiCore, which is designed to help companies ingest and validate data from their existing systems and move their data into Rubikloud’s proprietary data model. Finally they offer RubiOne, which is a set of machine learning tools and libraries designed to help retailers build their own machine learning applications on top of the Rubikloud data set.

The idea is to use the applications the company has provided to help retailers improve promotions and better understand their customers, while giving them the ability to build their own customized applications as well.

This appears to be a solid approach, but the company is far from alone in this space as it’s competing with giants like Adobe and a host of other startups. Regardless, investors obviously liked what they saw and have pumped in a lot of money to help in that regard.

The company plans to use the money from this round for worldwide expansion with a focus on opening offices in Europe and Asia.

Featured Image: Thomas Barwick/Getty Images

Target launches its own mobile payments system with debut of ‘Wallet’


As promised earlier, Target today launched its own mobile payments system with the introduction of “Wallet” in the Target app. Wallet, as the name implies, allows Target shoppers in-store to both check out using their smartphone as well as take advantage of their Cartwheel digital coupons and discounts with only one scan of their barcode.

Already, Cartwheel savings in Target’s app had worked like this – that is, after adding the discounts on selected products to your Target account using the Cartwheel feature, shoppers could present a barcode to be scanned at the point-of-sale to take advantage of the savings. The only difference between that and today, is that shoppers can now also choose to pay using their Target REDcard at the same time.

Target’s REDcard is available as both a debit card that links to customers’ bank accounts and a store credit card, and offers 5 percent back on purchases to encourage its use.

According to the retailer, the advantage for consumers is faster checkout – up to four times faster than “other payment types” it says, a jab at traditional payment methods like chip-and-PIN cards, for example, which are notoriously slow. (Of course, the retailer benefits, too, by pushing users to REDcard where it saves on credit card processing fees.)

In the near future, Target Wallet will also support the ability to add and pay with Target GiftCards as well, the retailer says.

Target isn’t the only major brick-and-mortar retailer with its own payments system. Walmart previously launched Walmart Pay; CVS has CVS Pay; and Kohl’s has Kohl’s Pay, for example. (Perhaps we should give Target credit for not naming its solution Target Pay.)

In addition to saving the company money by shifting consumers to store cards, in-house mobile payment solutions give retailers access to the consumer data they would have otherwise given up, had the shopper checked out with a mobile payment solution like Apple Pay, where that data is not shared.

“Wallet in the Target app makes checkout easier and faster than ever,” said Mike McNamara, Target’s chief information and digital officer, in a statement about Wallet’s launch. “Guests are going to love the convenience of having payment, Cartwheel offers, Weekly Ad coupons and GiftCards all in one place with Wallet.”

The new Wallet feature is available on both Android and iOS versions of the Target app.