The CEO of $535 million AI startup Standard explains how its new deal to power cashierless checkout at Circle K convenience stores shows how it’s possible for retailers to take on Amazon Go

  • Circle K will deploy new, autonomous checkout technology from AI startup Standard beginning in 2021, the convenience store chain said on Tuesday. 
  • Customers will have the option of using an application that charges them automatically for purchases when they walk out, alleviating the need to go to a physical checkout station.
  • The technology is becoming more sought-after by retailers amid Amazon’s success with Amazon Go, its own chain of cashierless convenience stores. 
  • “If you look at what customers are struggling with in our channel and in all of retail, it’s waiting in line,” Magnus Tagtstrom, global head of digital innovation at Circle K parent company Alimentation Couche-Tard, told Business Insider.
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Your local Circle K store is about to get a lot more high-tech.

Alimentation Couche-Tard, which operates over 14,000 Circle K convenience stores around the globe, said on Tuesday it would outfit its retail locations with autonomous checkout technology from Standard — an artificial intelligence startup valued at $535 million, according to PitchBook.

Slated to begin operating in 2021, the updated Circle K locations will offer consumers the option to automatically get charged for their purchases as they leave the store, rather than go to a cashier. Customers will still have the option to go to the checkout counter or use a self-checkout kiosk, at their discretion. 

While still not widely available, these sorts of autonomous shopping systems are becoming more popular as companies look to remove whatever they can to make shopping an easier experience, and thus boost sales. 

“If you look at what customers are struggling with in our channel and in all of retail, it’s waiting in line,” Magnus Tagtstrom, global head of digital innovation at Alimentation Couche-Tard, told Business Insider.

Take, for example, Amazon Go, the retail giant’s line of cashierless convenience stores, which uses what it calls “Just Walk Out” technology to similar ends by placing AI-powered cameras on the ceiling that tracks what customers pick up, and what they put back on the shelf. 

Standard’s deployment process is easier than how Amazon does it, per CEO and co-founder Jordan Fisher, because it retrofits existing facilities by placing cameras on the ceilings — meaning no new stores would need to be built around the tech. What takes longer is training the machines to recognize all the products and how shoppers behave when in-store, as well as the integration with the back-end payment systems.

It costs roughly $200,000 to outfit a single location, said Fisher. 

Avoiding Amazon

There are currently 26 Amazon Go locations in operation — a fraction of the amount of Circle K stores out there. But Amazon has big plans for the technology behind Amazon Go, and is also reportedly pitching brick-and-mortar retailers like Walmart and Target on the idea of collaborating on the system. 

Fisher says that despite Amazon’s size and scale, however, retailers are hesitant to partner with the company on autonomous checkout given the fact that they’re likely also rivals.

“You don’t necessarily want to work with one of your biggest competitors,” he told Business Insider.

On top of the ease for customers, and the enhanced coronavirus safety measures they can enable, AI-powered shopping systems offered by Standard and other vendors can allow store owners to gain deeper insight into their consumers, improve product placement, or inform new marketing campaigns.

The technology could pinpoint, for example, whether customers were spending less time in one area of the store. It can also track which products people may pick up, but never purchase — providing critical data that can help retailers figure out why certain items may not be selling.

And because getting set up to shop this way is all done through an smartphone app, Circle K can use the data to begin to build customer profiles and tailor promotional offers based on past spending habits. That’s the kind of data that just wasn’t possible to gather before. 

“What we see today that we can do an analytics on is what is on their receipts, not, how did they move through the store,” Tagtstrom said.

While Tagtstrom says discussions were ongoing prior to the pandemic, the changes will help ensure greater flexibility for shoppers for contactless checkouts.

And as retailers continue to try to infuse their stores with the latest technology, Fisher says it is only a matter of time before more stores employ autonomous checkout systems.

“The industry has moved on now beyond the feasibility phase,” he said. It’s “now in this phase of operationalization, how do we really make this work or real retail environment.”

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