Shopping without tills

17 March 2020

Interview with 

Peter Cowley, Invested Investor

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vintage shopping till image

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Tech giant Amazon is about to start offering its till free technology to other high street stores. But how can a store be till free, and what implications does this have for how we shop? Tech correspondent and angel investor Peter Cowley spoke to Georgia Mills about how a till-free shop would work...

Peter - Yes, the technology is actually called "Just Walk Out". It's an experiment that Amazon started about two or three years ago and it went into "production" in 2018. So there are now 25 stores around the US, though none outside that. The way it works is you have an app on your phone - you assume you have the app - you scan on entry, you are then tracked around the store. Not your face; not with your phone position, because you might not have a phone on it; it's to do with your clothing, your size and your gait. So you're tracked round, and then you pick items up off the shelf which has a weighing sensor on it, and put it in your bag or hold it your hand, and then walk on, collect everything, and then you just simply walk out of the store.

Georgia - So are there just cameras around the whole store, just monitoring every movement?

Peter - Correct. So there are a number of cameras, which are quite complex I suspect, and they sort of have technology in the cameras itself, rather than just going straight to the cloud, which then hands over the people to the next camera. It probably reads occasionally if you're in the same clothes, the same size, et cetera, and walking the same way. It might get confused.

Georgia - So if a basketball team all go in at the same time...

Peter - Exactly, exactly! Or you could joke about sort of having a, you know, coming out in a wheelchair and going in without the wheelchair or something. So that's the idea, so you can effectively pick up anything you want.

Georgia - Right. And then something tells you what's been taken off the shelves.

Peter - Correct. So what it's doing is building picture of the item, which it will recognise, and once it's done that it then knows that human being it's following has that much with them. But if you take something out of your bag and put it back on the shelf, it'll reweigh that and decide you've put it back.

Georgia - Right. And so I'm guessing if there are stores that work on this, it works and you can't confuse it. Taking things around, putting them back in different places...

Peter - Clearly, although it's not all over the internet, an awful lot of that's been tried. Both internally for the two years when they had the employees all trying that sort of thing, I suspect changing their clothes, taking their jumpers off, and everything else, in order to confuse it. Because what they're trying to do, of course: you don't want too much theft, so this is where you take it off the shelf and it doesn't see that you've hidden it somewhere. And conversely, which is almost more important, you don't want people falsely accused of shoplifting. And it's quite important that the app apparently will tell you what you've bought; so before you've left the store door you can check that if you wish, if you don't trust it. And then you can argue much more easily when you're inside the store than when you've got home.

Georgia - Right. And how does the actual paying bit happen? Does the money, just when you leave the store, does the money just fly out of your account?

Peter - Exactly in the same... yes, exactly as if it comes out... you've got a credit card attached your Amazon account and if you're using the cash version, you will have a cashier there, which will... they've determined that that person with that shape, et cetera, has bought that amount and then you'll pay for that.

Georgia - So does this make shoplifting harder?

Peter - One suspects so. In fact the amount of shoplifting the States, or worldwide, is quite a lot. It's about $50 billion lost worldwide, which is about 1.3%. If you can reduce that, that's good. So I suspect it will reduce shoplifting by the consumer. Of course, an awful lot of shops' 'shrinkage', as it's called, actually happens by staff.

Georgia - Right. So is that the main impetus for doing this? Because I'm guessing it's not cheap or easy to turn your shop into a till free.

Peter - Yeah. They're talking about about a million dollars, because you've got the cameras and you've got all the shelves, and you need weighing, and so on. And there's two drivers. One is for us as consumers because we can just go in and pick up a sandwich, a bottle of milk or whatever, and walk straight out, so we don't have to queue up or scan stuff, et cetera. And the secondary of course is for the stores because that way they can reduce the staffing, the checkout staffing. You've still got other staff because you'll have people hanging around helping people. And it's less space of course as well. You know, the checkouts all take space up, don't they?

Georgia - I mean I'm just thinking, the number of times I'm going to buy like a giant pack of chocolate and I get to the tail and I'm like, "no, this is foolish purchase." It sounds like it's going to make impulse purchasing a lot easier.

Peter - Yes! In fact there is some figure that says actually the shops sell more because of this. And I don't think it's because of maybe people, I don't know, not being told by the shop assistant "are you sure you want that?" I would hope they don't. It's because it's more convenient. Nip in and walk out again.

Georgia - Are there any other downsides or benefits we haven't discussed?

Peter - I don't think so. I mean it's to do with cost saving, it's to do with convenience. The downside of course is the loss of jobs potentially. The other thing, the big thing of course, is data. As always with these tech giants we're giving away more and more data, and that suspect. What Amazon has done in the last week while we are talking about it is they've released it to other shop chains. Obviously they'll charge for that, it won't be free, but Amazon will be collecting that data so Amazon will know even more about what our preferences are.

Georgia - Right. So even if you're choosing not to shop with Amazon, if you go into a shop with this technology, they'll be still getting your data.

Peter - I assume so depending on the contract between the shop and Amazon, but I suspect that will be the case.

Georgia - How common do you think this will be? Just briefly.

Peter - I think in time for smaller stores it will be extremely common, but I don't think you'll be doing your weekly shop there. But then with the coronavirus around at the moment a lot of the weekend shopping is going online anyway, isn't it?

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