To find cashierless tech's ideal market, AiFi goes underground

One of the concerns for no-cashier stores, beyond how well they work, is that they must also be placed in the middle of tech-friendly cities, where retail space comes at a high cost.

As deployments of cashierless stores pick up steam, there are initial signs that such stores may benefit more from being located in a practical, less glamorous setting.

A deployment from Signpost of a tiny, “bathroom sized” no-cashier store in Tokyo’s transit system provides a couple of advantages that could boost cashierless tech quickly. The model has a ready-made captive audience that requires less of a behavior change, and it also continues a long tradition of deploying new payment technology in transportation systems. Commuting has already been a popular gateway to alternative commerce in cities such as London and Singapore.

“The benefit of having a store in the subway station is it dramatically shortens the time,” said Steven Gu, a former Google programmer who worked on the Google Glass project. Gu is also the founder of AiFi, a Santa Clara-based retail technology company that’s launching NanoStore, a 160-square-foot store that can be set up in a matter of hours. “People can walk in, grab something and then walk out, which fits in with having a minute or so before a train comes.”

Nano's size at launch is about 300 square feet less than the "small Amazon Go" store that Amazon is testing at a Macy's location in Seattle, though Gu says NanoStore is configurable for different environments.

AiFi did not disclose its retailer partners, with Gu saying it’s close to launch with users including a rail station in Europe. The store uses a mix of sensor fusion, which helps connected devices communicate; and computer vision technology that keep track of items, inventory and shoppers.

The user swipes a payment card or a mobile wallet app near the store's entrance that registers payment information; there's also an option for an app that the shopper must use to pre-register before entering the store for the first time. The store's sensor technology automatically charges the user upon grabbing an item, which also reduces the opportunity for shoplifters. Putting an item back on the shelf reverses the charge.

While Gu discussed airports and transit systems, he contends the concept is scalable for larger stores since the cameras and sensor technology can be optimized to contain hardware upgrades. It uses simulations to study shopper movements to update the technology’s ability to manage and spot inventory and price.

The way to draw a wider audience for no-cashier stores is to embed them in areas of high traffic, particularly related to traditional activities such as transportation and centralized business districts, Gu said.

“The different sizes are interesting. You can literally fit it anywhere … at universities, shopping centers and parking lots,” Gu said.

Since Amazon initially shook up retail with its no-cashier Go concept store, the focus has started to turn from the diverse technology inside stores to how the idea fits the parallel need to respond rapidly evolving store footprint needs.

That has seen Amazon, for example, scour U.S. and Europe to find spots for Go that can accommodate airports, hospitals and office buildings, as well as determine how the idea fits in non-U.S. retail markets such as London. The result has been an Amazon Go kit model that can fit a specific space with a small store that can be up and running quickly.

Given Amazon’s aggressive plans to open about 3,000 Amazon Go stores, and potentially use its acquired Whole Foods franchise as a base network, the cashierless space is attracting lots of technology companies.

As the stores start to proliferate, the real-world venues outside of the test lab will also diversify, according to Krishna Motukuri, CEO and co-founder of Zippin, which recently opened its cashierless store in San Francisco.

“2019 is going to see the reinvention of retail like never before,” Motukuri said, adding that the checkout-free shopping wave will eliminate checkout lines and broaden horizons for retailers. “Store sizes, formats and locations that were not economically viable earlier start to become attractive.”