Phygital: Tesco Tests a Cashierless Store

At a Capital Markets Day, the British retail giant Tesco announced a partnership with Trigo Vision, an Israeli start-up focusing on AI technologies.

Goal: Launch their own cashierless stores inspired by the Amazon Go model.
Trigo Vision’s solution was launched in 2017 and relies on cameras, sensors and Machine Learning algorithms.
How it works
- Customers download the dedicated app and key in their payment information.
- In-store cameras are used to identify them as they walk in.
- The solution automatically detects when items are picked up or put back on the shelves, they are added to a virtual shopping cart.
- Once their purchases completed, customers just walk out. The amount is debited automatically using data they stored to the app beforehand.
Work is still underway to further improve this automation project. The retailer didn’t say how many stores they would intend to equip.

Transforming the customer experience. Instead of having customers scan a QR code to make their payment from the app, Tesco (27.8% market share) relies on an AI-powered service for the sake of enhancing customer experience and avoiding friction points.
Many advantages. Removing cash counters with this solution by Trigo Vision might enable the retailer to increase their profit margins. It is also a way to improve their position considering the progress made by low-cost German retail groups (including Lidl and Aldi).
Tough competition. Many retailers have been drawing inspiration from Amazon's cashierless store, and opting for cameras to ensure the identification step. Amazon, for their part, would be planning to open 3,000 Amazon Go stores in the US by 2021. They also consider opening a store in London Oxford Circus. The British retailer claims their image recognition technology is as efficient as Amazon Go, but requires fewer cameras.

A year ago, Tesco tested a self-checkout option based on a Scan Pay Go app. Their first cashierless store was trialled in Clapham, London.
Just like Tesco, other British retailers, including Sainsbury’s in Holborn (London) have been testing cashierless outlets since the beginning of 2019.
Trigo Vision raised $7 million and had teamed up with the largest retailer in Israel, Shufersal. They plan to rollout 272 stores within a year. Other start-ups (such as Zippin, Aipoly or Standard Cognition) are also crafting relatively similar solutions.

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