Published on September 1st, 2020 📆 | 6725 Views ⚑0
Grabango launches checkout-free technology at Giant Eagle GetGo market
- Startup Grabango is publicly debuting its checkout-free technology for the first time in a Pittsburgh store, allowing shoppers to walk out with their goods without scanning individual items and taking on bigger rivals like Amazon Go and Standard Cognition.
- Unlike Amazon Go’s checkout-free store, Grabango’s technology works in tandem with cashiers and grocery baggers. “Grabango creates lineless stores, not cashierless stores,” CBO Andy Radlow told Business Insider.
- The grocery industry has been slow to adopt new technology due to razor thin margins, but Radlow says that “they have hit an inflection point and they are pursuing technology solutions to solve that problem.”
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Startup Grabango just rolled out its checkout-free technology in a grocery store for the first time with a product that rivals Amazon Go, but with a twist.
A Pittsburgh location of Giant Eagle’s GetGo market, a 3,000-square-feet convenience store and mini-grocery, will use Grabango’s artificial intelligence-powered technology to give customers the option to skip checkout lines starting on September 1.
The grocery store industry has been working towards a vision of contact-free checkout for years, and Amazon Go pioneered the checkout-free concept in 2018 when it opened a grocery store in Seattle sans any cashiers or checkout stations at all. Unlike in Amazon’s stores, Grabango’s technology isn’t meant to replace in-store workers, it’s meant to supplement them. Other big names are rolling out their own versions of checkout-free technology that run in tandem with existing checkout options, too: Walmart offers contactless checkout through its app, Circle K is partnering with startup Standard Cognition, and Aldi is currently looking for a technology partner.
“People always were — and seem to continue to be even more — concerned about waiting in line,” Grabango’s chief business officer Andy Radlow told Business Insider. The coronavirus pandemic has only made contactless payments and quicker shopping experiences more appealing.
Grabango outfitted Giant Eagle’s store with lines of cameras that blend into the ceiling’s architecture. These cameras don’t use facial recognition to track people through the store. Instead, they use object recognition: The software reads shoppers as objects attached to “virtual baskets.” When a customer picks up an item, that product is automatically attached to the basket. Refillable coffee is tracked by which cup size the customer picks. Products in hand, customers can skip the item scanning process in favor of simply scanning the Grabango app on their phone to pay. Grabango says its technology doesn’t recognize the baskets as individuals until they check out.
The four-year-old startup, which has raised $32 million according to the company, announced its partnership with Giant Eagle in 2019 after the grocery chain’s reps toured Grabango’s demonstration lab in Berkeley, CA. The Pittsburgh GetGo is the first store to launch Grabango’s technology publicly, but Giant Eagle plans to roll it out to its larger grocery stores in the area, and four other unnamed stores are testing the technology in “learning mode,” too.
Grocery stores typically have razor thin margins in part because of the costly process for something like a bag of chips to reach a customer’s hands: It has to be shipped to a grocery store, stocked, scanned, shelved, and eventually bagged by a cashier. That has made the industry slow to adopt new technologies, like automation. CEO Radlow saws that Grabango’s technology can ultimately help grocery stores like Giant Eagle differentiate themselves.
“I believe that the grocery industry is under so much pressure that, as they’ve discovered ways to defend themselves or enhance their businesses, they have hit an inflection point and they are pursuing technology solutions to solve that problem,” Radlow said.
Grabango’s technology can both make the check-out process more efficient and also lower opportunities for theft, since items are tracked based on who picks them up and when.
“The profitability of this business is in the low single digits, and therefore there’s tremendous opportunity for incremental profits,” Radlow said.
Companies like Grabango or Standard Cognition are different from Amazon Go in that they are an add-on services to existing checkout experiences. Customers can choose to stand in line or download the Grabango app, while Amazon Go designed a totally checkoutless experience where shoppers don’t even have the option of making purchases the normal way. But even Amazon Go requires human contact in order to check identification for alcoholic purchases.
Radlow says Giant Eagle will continue to rely on its cashiers.
“Our mantra on this is that Grabango creates lineless stores, not cashierless stores,” he said. “We still need human touch. Loyalty is heavily correlated with human to human interaction.”