Scoot over, Amazon Dash. Here comes KroGO.
The Kroger Co. has been quietly testing a souped-up shopping cart that can weigh items, provide shopping suggestions, and scan and pay for orders without requiring shoppers to visit a traditional checkout lane, WGB has learned.
The Cincinnati-based retailer is calling the unit, which is provided through a partnership with startup tech firm Caper, “KroGO powered by Caper.”
Plans for a wider rollout are not set at this time, though with 2,700 grocery stores in the U.S., the new technology could potentially be significant for Kroger, its shoppers and Caper. A company spokesperson confirmed to WGB that a test has been ongoing since this fall at a Cincinnati-area store. Additional deployment “will be guided by insights from our customers and associates,” the spokesperson said.
Caper officials reached by WGB declined immediate comment.
Faster Checkout, Less Contact
Introduced 84 years ago in a Humpty Dumpty supermarket in Oklahoma City, and save for Aldi’s nifty coin-enabled lock innovation, changed very little since, the shopping cart could become a significant vehicle in a race toward checkout-free grocery shopping that is very much up for grabs. Stores today are experimenting with a variety of options ranging from purpose-built small stores to the newly born chain of Amazon Fresh grocery stores, all eight of which feature a proprietary smart cart it calls Amazon Dash.
Though still in the testing stage, Kroger appears to be putting some effort behind its presentation of the sleek KroGO cart, including custom branding, store signage, dedicated webpages and a promotional online video. In Cincinnati, it encouraged trial of the new cart by offering shoppers a 5% discount on Kroger-branded items bought while using it.
KroGO joins other recent initiatives at the company—including a massive forthcoming rollout of online shopping capabilities supported through an exclusive U.S. partnership with Ocado—intended to support what officials call a “seamless” and convenient shopping experience mimicking the relative ease of online shopping. That mission has taken on additional gravity amid a pandemic that’s turned the checkout lane—long identified as an unpleasant experience for physical store shoppers—into one that also introduces risks of virus transmission. That is acknowledged in Kroger’s messaging around the KroGO offering, which promises its “fastest checkout ever,” and promotional signage reading, “Faster checkout. Less contact.”
Caper, based in New York, launched the Caper Cart in 2017, providing what it calls a “plug-and-play” option for grocery stores to meet consumer demand for more convenient shopping. The carts incorporate computer vision and sensing technologies to scan items as they are placed into—or taken out of—its carts. A “deep learning” AI algorithm in the meantime supports an ability to recognize items over time, which could eventually obviate the need to scan. The carts include a built-in scale to measure items sold by weight, and a dashboard-like screen at the handle that can deliver shopping list recommendations, promotional offers, and wayfinding capabilities, as well as a reader for shoppers to scan their loyalty app and a credit-card payment processor enabling checkout.
These advances aren’t all about convenience for the shopper. Company officials say that some stores around New York testing the Caper carts, including Foodcellar & Co. in Long Island City, showed basket sizes some 18% above average, in part through buying suggestions that helped to build bigger rings, but also because “shoppers really love them,” Ahmed Beshry, a co-founder of Caper, told WGB in a 2019 interview.
Retailers could potentially also benefit from lower labor costs and greater productivity over time, as well as new insights into how shoppers traverse stores and interact with merchandising displays and real-time messaging.
Caper, whose financial backers include Instacart co-founder Max Mullen and Red Apple Group, the New York-based owner of Gristedes and D’Agostino stores, late last year introduced a countertop checkout device intended for small stores called the Caper Counter. Its carts have also been deployed in some stores of the Canadian grocer Sobeys, whose officials said they were among efforts to “thrill” their customers.
Kroger said shoppers would need to use existing checkout technology to process certain items, including gift cards, behind-the-counter pharmacy items and tobacco products. KroGO is also not accepting payment via cash, check, EBT or WIC or paper coupons at this time. Kroger is encouraging users of KroGO to bring their own shopping bags, “gently” return the carts to a designated area in the store, and use existing self-checkout lanes to exit.
A Frictionless Revolution
The grocery industry is seeing a revolution in technology-equipped options to reduce checkout “friction”—a sore experience point for shoppers that worsened for retailers and shoppers alike amid contagion anxiety last year. These pain points helped to elevate “speed to shop” alongside price and quality as the top drivers of consumer preference in selecting where to shop, shopper data firm dunnhumby said last week in its annual Retailer Preference Index study.
Options to skip traditional checkout range from self-scanning devices and apps residing on shopper’s phones; “roving” checkout ambassadors; and a handful of new, retrofitted or experimental stores enabled by shelf- and ceiling-mounted cameras and sensors. These technologies have generally been deployed in small spaces with limited selections, and not all efforts have advanced beyond the testing phase. Other well-funded young companies like Grabango and Trigo Vision are at work retrofitting larger stores with similar technologies but those too are barely off trade-show circuit.
Veeve, a Seattle-based startup founded by former Amazon employees, is among companies working separately on a smart cart its officials have suggested could reduce reliance on third-party shoppers to enable pickup orders. Other startups such as Shopic are envisioning retrofitting existing carts with scanning devices.
Amazon’s aforementioned Dash Cart in the meantime has met acclaim from shoppers who have tried it. Similar to Caper, Dash includes a product scanner and a scale, though its relatively small size—not much larger than a handled basket ideal for “one or two bags” of groceries, officials say—and a differing checkout technology are among the aspects distinguishing it from KroGO.
More than 300 exhibitors with eyes on the transformation of the food retailing and consumer goods industries—and the opportunities that transformation promises them—packed the exhibit hall at the Groceryshop conference this month in Las Vegas. What follows are highlights from the show floor.
Retailers have invested some $28 billion in e-commerce and fulfillment options but, according to Robomart CEO Ali Ahmed, haven’t yet solved one of the trip’s core problems: How does a virtual shopper pick their own fresh goods?
What if the store came to you? Ahmed showed off the Milpitas, Calif.-based company’s driverless and cashierless store, which consumers can summon in the manner of an Uber car. The same app will unlock its doors, revealing a selection of goods, and arrange for payment.
The company is gearing up to launch shortly with Stop & Shop, and it is prepared to announce another partnership soon, according to Ahmed. The plan with Stop & Shop is to have the vehicle stocked from a hub store and primarily roam within a range of that store’s neighborhood, lessening logistical headaches that would come with high-speed highway travel. Ahmed envisions hundreds of these vehicles in every major city over the next decade.
Doug Koontz is director of content, strategy and analytics for Edge by Ascential, the London-based firm providing a suite of data-driven insights for retailers and brands. Assessing neighbors on the show floor, Koontz divided the presenters into three broad categories: digital shelf tools; in-store analytics; and “shiny things” such as robotics and automation.
While digital shelf marketing is not new technology, “it is new for those who thought this business would never take off online," he said, predicting more widespread adoption of operational aids in stores, such as tracking technologies and inventory. “We’re underdeveloped on that front."
The rise of micro-pick technologies and robotics indicates that the industry is starting to admit that “you can’t do grocery e-commerce from a 1-million-square-foot warehouse in the middle of Indiana,” Koontz said. “What are the tools and infrastructure we need to effectively do it closer to the consumer?”
As e-commerce offerings such as click-and-collect gain users, efficiently orchestrating service has emerged as a challenge, said Jeff Baskin of Radius Networks' FlyBuy.
FlyBuy, based in Washington, D.C., uses location technology and an associated app to loop in retailers preparing orders and the customers coming to retrieve them, helping to reduce wait times for shoppers while improving efficiency and assuring fresh, prepared and frozen items are picked at the right moment to improve quality. It is being deployed by grocers such as Walmart and Lowes Foods.
A similar “location-as-a-service” offering from Glympse, also on the show floor, launched at Albertsons Cos. stores this month, the Seattle-based company announced at the show.
When it comes to checkout-free technology, is bigger better? As Ran Peled of Israel’s Trigo Vision sees it, size does matter.
The reason computer vision technologies have until now been deployed in small stores, many with fixed inventories, is that they haven’t overcome the computational challenges that big and dynamic stores such as supermarkets present, he said.
“I think the differences between the sizes of the stores you are serving is going to be a very telling element of who's going to scale and get better clients,” said Peled, whose firm is working with a grocery chain in Israel and is reportedly in a partnership with Tesco in England. A $22 million new capital investment was announced at the show.
Why should supermarkets consider this technology? For one, Amazon is headed that way, Peled said. He also insists grocers could stem share loss to alternate formats and win back big baskets that have gone to digital alternatives once they solve consumer pain points that come with congested checkout lines.
Martin Karafilis and Marcel Herz have taught a checkout lane how to recognize what’s on it. Their Tiliter solution utilizes a camera that can recognize fruits and veggies, saving shoppers the torture of PLU codes at self-checkout and providing retailers with a guard against fraud. The Munich-based company has already rolled out its units in Australia and was looking for more adoptees.
At least two exhibitors on the Groceryshop floor were wondering: Why retrofit an entire store for frictionless commerce when a souped-up grocery buggy can do the same?
Veeve, founded by former Amazon engineers in Seattle, has rolled out an AI-powered shopping cart that can recognize products dropped into it and provide retailers with data regarding the shopper's journey and provide them with offers as they go. It is now testing in a Seattle store called India Market. Located just down the aisle, the Brooklyn-based competitor Caper announced it has gathered $10 million in new funding expected to speed a rollout of thousands of its carts to U.S. stores in coming months. Shoppers using Caper carts in test stores are seeing average baskets climb in excess of 10%, co-founder Ahmed Beshry said.
The challenge of executing e-commerce picking efficiently requires a hand with a brain, said Leif Jentoft, co-founder of Somerville, Mass.-based RightHand Robotics, demonstrating the company’s Rightpick2 picker. The robotic arm can recognize products, learn about them, and lift them and place them using the appropriate suction, gripping and AI software. This can address a supply chain pain point in warehouses and pick centers focused on e-commerce, Jentoft said.
Steve Hornyak, the newly named COO of the recently rebranded robotic micro-fulfiller Fabric, predicts that 20% or more of the supermarket industry will eventually go to some form of automated picking as they come to realize that is their best path to profitability in e-commerce. “I see massive adoption coming the second half of next year, accelerating through 2021, and full-bore in 2022,” he said.
The company, which has established U.S. headquarters in New York, has also refined its vision for grocery, saying it would now pursue private “white-label” facilities on the properties of supermarkets vs. an earlier ambition to provide robotics as a service to the channel. Grocers seeing 200 to 300 e-commerce orders a day ought to consider micro-fulfillment, said Horyak. Centers require 15,000 to 20,000 square feet and cost about $3.5 million to get up and running.
Fabric provides what Hornyak called “phenomenal” proprietary software and robotics he promised “soon would become the worst nightmare” for competitors in the space.