The threat of Amazon is forcing supermarkets into drastic changes

UK supermarket giant Tesco is undergoing trials with Israeli AI surveillance business Trigo Vision to trial the concept of cashier-less stores, supposedly due to pressure from Amazon.

When Amazon first emerged, few could have imagined the revolution which would have been thrust upon the retailing industry. Even now, more than two decades after Amazon was founded, there are businesses which are still struggling to adapt to life in the digital epoch. The writing has been on the wall for a long-time in retail, and now it seems Tesco is attempting to get ahead of trends for the supermarket segment.

According to The Telegraph, Tesco is currently in trials with Trigo Vision to create a cashier-less store, a concept which Amazon has been playing with in the US for years. Don’t be fooled by the absurdity of the vision, it will soon enough be a presence on the High Street and once the benefits can be seen by all, it will become much more common place.

Take self-checkout tills as an example. When these first emerged everyone hated them, and in some regions, they still do. But you cannot walk into a Tesco or Sainsbury’s in an urban environment anymore without seeing them. And most importantly, no-one really cares anymore. The idea took some time to bed in, but once the bugs were worked out and people saw how much more efficient the system was, they accepted it. The same trend will most likely occur with cashier-less stores.

What is worth noting is that Tesco is not alone in pursuing the future. Sainsbury’s has also announced it is toying with the cashier-less idea, opening its first store in Holborn, Central London, in April this year.

Trigo Vision, the provider of the underlying technology, was founded in 2017 and has been through one round of funding thus far, attracting $7 million from Hetz Ventures and Vertex Ventures Israel. The team already has a partnership with Shufersal, Israel’s largest supermarket chain, to roll-out its automated retail platform in over 272 stores across the country.

The firm supplies both high-resolution RGB cameras, installed on ceilings and an on-premises processing unit that runs machine learning-powered tracking software. The algorithms are continuously honed by Trigo Vision through the data collected at various sites and the team can also help develop customisable apps and kiosks to improve experience.

The technology makes use of artificial intelligence and a dense series of surveillance cameras to track what items are being placed into a customer’s shopping trolley. Customers will be prompted to download an app and enter payment details, or an alternative for sceptics could be using a screen at the exit to complete the purchases.

As it stands, Amazon Go, the eCommerce’s cashier-less business, has launched in several cities across the US and has plans to open its first store in the UK at Oxford Circus in London. This will act as the flagship store for the UK though Amazon is reportedly on the hunt for more sites, 3,000 to 5,000 square feet in size, to expand the footprint.

The stores have been hailed as a success in the US and Amazon is reportedly targeting 3,000 locations within three years. Although this is far from proof the idea is profitable right now, the internet giants tend to run with unprofitable ideas they know will change the world, it should be viewed as a massive red flag for traditional supermarkets.

And while the bookstore segment did little until it was too late, Tesco is at least attempting to get ahead of trends. Another example of this is the ‘Scan Pay Go’ initiative. Here, customers can download an app and carry around a scanner to register products themselves as they wander the aisles, helping keep an eye on spending while also speeding up the check-out process at the end of the trip.

Many companies will state they want to disrupt themselves before being disrupted, though there is little evidence of this. The majority of the time there is an outside influence, a threat from a new player, to alter the status quo. This seems to be the case here, as Amazon is forcing the hand of Tesco, though future success of the Amazon Go business will depend on the ability of the traditional players to scale quickly.