As retailers race to figure out the future of frictionless checkout, Zippin, a fully functional, public convenience store in San Francisco, offers a cashierless model using its own frictionless technology.
The convenience store, which uses vision cognition technology, machine learning and smart shelf sensors, originally opened in August 2018 but recently reopened with longer hours, an updated design and an enhanced selection of products, including more fresh and prepared food items.
Customers simply use an app on their phone to enter the store, grab what they want and leave.
“When the receipt comes, we tell them exactly how much time they spent in the store,” said Krishna Motukuri, Zippin CEO and co-founder, noting that getting lunch can take a matter of seconds.
San Francisco passed a law in May banning entirely cashless brick-and-mortar stores to ensure residents without a smartphone or a bank account can still access the same services as other residents.
In response to the new law, Zippin now also accepts cash. Employees are available outside the store to assist — and to explain the technology to customers who are new to the concept.
But because the actual shopping area is only 250 square feet, there might not be any employees inside the retail space.
This means the store does not sell age-restricted products like alcohol and tobacco. But Motukuri believes this is simply a technological roadblock.
“Technology will get better,” he said. “For instance, age-restricted products today, by law, require a human to check the customer’s ID. That could be something that could be automated. … in the next five or 10 years, most of them (could be) automated.”
From the Top
The idea for Zippin was born about five years ago from Motukuri’s own frustration over waiting in line.
His wife asked him to pick up milk on the way home, so he stopped at their local grocery store, only to find — you guessed it — a massive checkout line.
“I just turned around immediately because there was no way I was going to wait five minutes for a single gallon of milk,” he said. “That essentially got me thinking; I was there, a willing customer, and there were numerous products, numerous gallons of milk for me to buy. But this bottleneck called checkout is what actually made the sale fail.”
Motukuri said he saw this as an opportunity for change. He and co-founders Abhinav Katiyar and Motilal Agrawal got down to work.
The result combines vision cognition technology, machine learning and smart shelf sensors.
The cameras and software work together to recognize the products, but because all of the cameras are overhead looking straight down, rather than on the walls, they “almost never see a customer’s face,” said Motukuri.
Privacy is a big concern for many shoppers, he said. The feature allows a sense of anonymity.
“You can actually walk into the store completely covering your face, and then you could use a
payment method that’s completely privacy-friendly,” he said.
C-store retailers can learn a lot from the data, such as which products customers pick up but then put down because of the nutrition label or price, for example. This information can help stores better market products going forward.
“The loyalty programs that most of the retailers have are designed so that at least they know what products customers are buying,” said Motukuri. “But it’s only limited to that — what they are walking out of the store with.”
The technology can also help with restocking and inventory management.
The store employee scans the products when they come in; as soon as the employee places the product on the shelf, the system automatically updates the inventory.
In addition, when the shelf is running low, the technology will know and alert employees in real time.
Ultimately, Zippin plans to use its technology to help retailers without the capability, resources or time to create their own frictionless technology.
Motukuri said the cost of the technology is based on the size of the store — $25 to $30 per square foot. Zippin’s space is small, with only about 100 SKUs, but the technology itself has unlimited capacity.
So far, Zippin is “working with four major retailers,” though they haven’t disclosed which just yet. But Motukuri’s confident other retailers will get on board once they do.
“The industry’s obviously just getting started, but it’s picking up very rapidly,” he said. “It looks like, in the next five to 10 years, you should expect most convenience stores to be entirely checkout-free.”
Editor’s Note: Zippin recently announced it has entered a s partnership with Brazilian retailer, Lojas Americanas S.A. Lojas Americanas S.A. invested in Zippin in June 2019 to use the checkout-free shopping technology in Brazil exclusively and develop new technologies for their Ame Go retail stores. The first Zippin-powered store is currently open in Rio de Janeiro, Brazil. The next store is expected to open in Sao Paulo, Brazil.