I put my finger on a sensor by the front entrance of the store and the doors open to let me in. A sales-clerk avatar greets me by name. I look for the product I want amid an array of glass-fronted shelves and when I find it, I place my finger on a sensor to open the door. A sensor IDs me and another IDs the product I’ve taken and deducts the price from my account. If I have second thoughts, I can put it back and the transaction is canceled.
This isn’t a scene from a sci-fi film of 20 years ago or even a shopping trip to a cashier-less Amazon Go store. It’s the way people will be able to go shopping for pet food in Tel Aviv’s Florentin neighborhood in another two weeks after the first Nowpet store opens.
The technology behind the 40-square-meter shop, billed as Israel’s first cashier-less store, was developed by an Israeli Cyb-Org Technologies, and if pet food seems like an odd market segment to launch the future of shopping, the reason is that Erez Gur, its founder and CEO, is a veteran pet food retailer.
He owned the Jungle chain of pet shops and today operates the Petbuy chain. The technology expertise comes from company chief scientist Ofer Levi, who has a doctorate in scientific computing and computational mathematics from Stanford University.
Gur plans to roll out 20 more of the shops in the greater Tel Aviv area, and from there expand overseas and to other retail categories.
“We plan to expand to areas like pharma and food. We are registering three patents in Israel, the United States and Europe and are in negotiations with retail chains that want to deploy the technology in scores of locations. We also have interest from overseas, although I can’t right now say anything about it.”
Gur says the store will sell its pet food at prices 20%-30% lower than other places. That may not seem so surprising since Nowpet saves the costs of paying a staff and can operate 24/7 without any downtime.
But it’s less surprising when you take into account the developing of a cashier-less store and the challenge of preventing shoplifting and computer errors.
Morgan Stanley, in a report last September, estimated that Amazon would need to spend as much as $3 billion to develop 3,000 of its Go stores by 2021. Sources estimate it spent $1 million just on hardware for its first 200-square-meter outlet in Seattle. Gur said it would cost his company $150,000 to outfit the same size shop.
The difference is that Amazon Go relies on smart cameras and computer vision. Cyb-Org uses sensors, critically determining which products a shopper took from the shelf by its weight rather than by processing the image.
Gur estimated that the average cost of running one of his automated stories was just 9,000 shekels ($2,550) a month, including rent and municipal taxes (although those can vary considerably by location).
And when all is said and done, Amazon Go bleeds about 8% of turnover from theft and miscues by the system.
“On YouTube there are lots of blogs explaining how you can cheat Amazon Go. Their problem is that there is no unitary identification of the customer and the product – dad comes in with two children and one child takes a product and puts it in his pocket instead of in the cart. If the camera doesn’t see it, it doesn’t deduct the price. Accuracy of 92% isn’t bad, but it’s also not really good,” said Gur.
To prevent theft, Cyb-Org has developed what it says in a unique sensor that measures the pulse of customers in real time. “If someone comes in with a pulse of 70 and leaves with a pulse of 130, it doesn’t necessarily mean that he’s a thief, but that is added to all the information the system collects on it and is taken into account,” said Gur.
And what about online shopping? More than automated stores, this is widely seen as the shopping alternative of the future. But Gur said that as a veteran retailer he is unimpressed with online sales.
“When I send a product to a customer it costs 25 shekels ($7.09), but in reality it’s more like 70 shekels ($19.9) – for gas, parking tickets, mistaken orders, mishaps and returns,” he said. “Everyone knows that internet delivery loses money. Even [major retailers like] Victory and Rami Levy admit it.”
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