When Amazon opened its first cashier-less store, Amazon Go, to the public nearly a year ago, Gidon Moshkovitz breathed a sign of relief. “Everyone thought we were half crazy when we talked about artificial intelligence in the supermarket,” he said.
As CEO of the Israeli startup Tracxpoint, Moshkovitz had been fighting an uphill battle to keep the brick-and-mortar store relevant in an age when Amazon and other online retailers see to be enjoying unstoppable. “The Amazon Go news proved to us that our idea was right. It gave us a tremendous tailwind,” he said.
Even in the world of smart stores, Tracxpoint is somewhat of an outlier: Instead of relying on an array of cameras and sensors deployed all over a store to keep track of shoppers, his company has put all its eggs in one basket, or more precisely one shopping cart.
The Artificial Intelligence Cart wasn’t Tracxpoint’s first innovation. The first was a shopping cart terminal that did away with the need to deposit a coin as a deposit to ensure its return. Instead, shoppers could simply enter their identity card number to release and return a cart. Super-Sol, Israel’s biggest grocery chain, installed 50 Check-In Terminals at its stores.
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“Today, Super-Sol can prevent theft. Someone who doesn’t who doesn’t put back their cart 10 times, probably won’t the 11th time either. The system prevents him from taking another cart,” explained Moshkovitz.
The Artificial Intelligence Cart, or AIC, is Tracxpoint’s new flagship product. Compared to the traditional metal carts, its sleek design is about as different in appearance as a Model T is from a Tesla. But AIC’s real difference is its brains: Four cameras mounted on the sides of the basket automatically identify everything the shopper drops into it, calls out the product name and adds it to the final bill.
Likewise, if the user changes his or her mind and removes an item, the AIC knows it and removes from the bill. Instead of waiting at checkout line, the shopper simply walks out the door with everything already paid for.
The cameras can keep track of the shopping by making use of the Global Data Synchronization Network, an internet-based network that enables companies around the world to exchange standardized and synchronized supply chain data.
GDSN contains simulations of the products stored in its database, which enables Tracxpoint to create a unique signature for each item. That enables the AIC’s cameras to recognize an item in seconds – without any need to scan the barcode. Shoppers are free to toss items into the cart without paying special attention to the cameras.
The first AICs aren’t going to be deployed in Israel but at stores belonging to the Italian Conad del Tirreno supermarket chain over the course of 2019.
“We went to Italy because online retail almost doesn’t exist there. There, food isn’t just a product, it’s more like a religion,” said Moshkovitz. “People there love to choose for themselves – it’s an experience in its own right. So, anything that improves the store shopping has enormous potential. It’s not always the right thing to go straight to the United States. We realized the better way was through Europe.”
After getting a degree in California and stints at Ernst & Young and HP, Moshkovitz founded Tracxpoint in 2016 with Edi Bahous and Mo Meidar, who are vice president for technology and president, respectively. Both are Israelis who had successful careers in the U.S. and Germany.
“When I left Israel, it still wasn’t Startup Nation,” recalled Bahous, who was a vice president at Mercedes-Benz. “I visited here during a sabbatical in 2015 to get acquainted with the high-tech. I was introduced to Gidon and I stayed. When I decided to leave Mercedes, my mother cried.”
Today, Tracxpoint employs 30 people at offices in Nesher, near Haifa. So far the company has been financed by Meidar, but Moshkovitz said Tracxpoint is now raising its first outside capital.
Moshkovitz said he expects to sign contracts with three major retailers over the course of 2019, but even if it takes longer the company can wait it out. Meantime, the big test is whether the AIC can work in the real world of shopping.
“We need to know the product works 100% of the time. Even expanding from one store to five and from five to 20 isn’t easy,” Moshkovitz said.
But will supermarkets survive the ecommerce onslaught? Moshkovitz and Bohaus are pretty confident they will.
“I think that maybe in two or three decades the supermarket will look different, but it’s hard to believe it will disappear from the physical world,” said Moshkovitz, “In fact, in 2018, a lot of supermarkets were opened in the U.S.”