Do smart supermarkets herald the end of shopping as we know it? | Retail industry


Welcome to the supermarkets of the future. They could appear and feel like the supermarkets we are all used to – and inventory the identical bread, butter and bananas – however these outlets at the moment are fitted out with greater than £1m of the newest expertise that their bosses promise will put an end to our greatest frustration (queueing) and our most persistent crime (shoplifting).

Jill French, a authorized secretary in her 30s, sporting a pointy navy go well with and matching beret, has simply left a Tesco Categorical on London’s Holborn Viaduct empty-handed. It’s coming as much as 6.30pm on a Thursday and, like dozens of others, French has popped in for just a few necessities on her means residence. “I simply went in to seize pasta, milk and a few broccoli,” she says. “However there was such a queue I obtained annoyed and walked out.”

An eight-minute stroll away is one other near-identical Tesco Categorical the place there aren’t any queues. This store is the cleverest of all the 2,700 Tescos in the UK.

There aren’t any checkouts (self-scanning or conventional), no checkout assistants, and – in idea – no probability of shoplifting. This Tesco, known as GetGo, is stuffed with 1000’s of cameras, weighted cabinets and artificial-intelligence expertise that watches your each transfer, figures out what you’ve purchased and payments you straight as you stroll out.

It’s not simply Tesco that’s trialling these new “smart” supermarkets. Retailers throughout the UK, and the relaxation of the world, are racing to deploy rival expertise. The mannequin for all of them is analogous.

First, you should obtain an app, register a bank card and scan a QR code in your cellphone to enter by means of prepare station-style gates. Boundaries forestall these with out the app from coming into the store. As soon as inside, the expertise follows you round the retailer recording each merchandise you decide up (and put again). If you’re accomplished you simply stroll out and after a couple of minutes your cellphone alerts you as to how a lot you’ve spent.

The supermarkets say time-pressed, simply annoyed persons are crying out for a greater, hassle-free shopping expertise, and if these trial shops are profitable they’ll roll out the expertise throughout the nation.

It’s virtually 74 years since the first British grocery store opened in Manor Park, east London. At this department of the London Cooperative Society, clients may stroll spherical the retailer and take objects off the cabinets by themselves. It was revolutionary. In the years earlier than, customers needed to current the shopkeeper at a counter with an inventory of objects that their assistants would fetch. Selecting your individual tomatoes was banned, and touching the merchandise may result in prosecution.

As with many inventions, the “self-service” grocery store idea was exported from the US, the place retail pioneer Clarence Saunders opened Piggly Wiggly in Memphis, Tennessee, in 1916. When you’re questioning about the identify, Saunders mentioned it was named “so folks will ask that very query”.

Right now all outlets, huge or small, observe the same idea. However our retail wants are evolving.

The times of “the huge weekly store” are over, with Britons going to a grocery store at the least twice per week, in keeping with YouGov, whereas a rising minority admit to popping in additional than twice a day.

The brand new era of AI shops is supposed to answer these adjustments, however are there risks in tinkering with one of the final remaining social levellers?

Supermarkets are extra than simply locations to purchase meals; they supply an area for a each day mixing of folks of completely different courses and backgrounds in our more and more siloed world.

An illustration, on a pale blue background, of a till sinking in the sea of a shredded till receipt
‘All of the supermarkets say the expertise is designed to make customers’ lives simpler, however specialists say the actual want is to enhance their backside line as they’ll reduce on the wage invoice and avoid wasting of the £5.5bn misplaced yearly to shoplifting and worker theft.’ Illustration: Pete Reynolds

If AI takes over, will these with out entry to the newest smartphone be barred from the nice grocery store melting pot? Will lonely older folks lose their pleasant chat with the cashier, which may very well be their solely dialog of the day?

Analysis backs up the retailers’ hunch about our frustrations with shopping. A current survey by packaging firm DS Smith discovered that greater than a 3rd of 2,000 folks polled would stroll out of the retailer somewhat than wait 5 minutes in a checkout queue, and 46% mentioned they have been so irritated by queuing that they’d contemplate not coming again to the store once more.

Laura Saunter, a senior retail analyst at the shopper developments analytic agency WGSN, says supermarkets have spent years making an attempt to bust queues as a result of they’re the clients’ “primary ache level”.

Many of us at the moment are so impatient that ready a couple of minutes for a checkout assistant to turn out to be free can really feel like an unacceptable trouble in a world the place expertise dominates and instantaneous gratification is anticipated.

“These shops are positioned at millennial dad and mom who’re busy; they need to be out and in, they don’t need to waste their time,” Saunter says. And youthful folks, era Z, simply don’t need to work together with retailer workers.”

Tesco has already examined the expertise at its employee-only grocery store in Welwyn Backyard Metropolis for greater than a 12 months. Amazon has 15 shops that use comparable expertise, together with one virtually straight throughout the avenue from the Tesco on Holborn.

The supermarkets’ analytics groups appear to have a factor for the central London neighbourhood with Sainsbury’s additionally opening a trial smart grocery store on the identical avenue in late November.

The race is on. Aldi is making ready to open the same smart retailer in Greenwich, south London. Morrisons is testing its personal imaginative and prescient of the expertise, codenamed Challenge Sarah, at its Bradford headquarters, and plans to shortly roll out dozens of small shops at busy places.

One other two of the Amazon shops opened in Chingford and East Sheen shortly earlier than Christmas. A current leak of inside paperwork reveals that these are simply child steps on to the UK excessive avenue for Amazon, which was based by the world’s second-richest individual, Jeff Bezos, in 1995 and is now the second-largest retailer on the planet, amassing gross sales of greater than $1.2bn (£900m) each day.

The web big is planning to open about 60 extra UK shops subsequent 12 months, adopted by 100 in 2023 and one other 100 in 2024, in keeping with a report by the weblog Business Insider. Amazon has lengthy been accused of trying to kill off the excessive avenue by encouraging us all to purchase virtually all the pieces on-line. However may its want to now open bricks-and-mortar shops revitalise our city centres?

All of the supermarkets say the expertise is designed to make customers’ lives simpler, however specialists say the actual want is to enhance their backside line as they’ll reduce on the wage invoice and avoid wasting of the £5.5bn misplaced yearly to shoplifting and worker theft.

Probably the most regularly stolen objects from UK shops embrace spirits, sirloin steaks, razor blades, cosmetics, toddler method and batteries, in keeping with the Centre for Retail Analysis (CRR). Cheese additionally makes the prime 10, with posh bries and aged camembert typically stolen to order by eating places.

Retailers in Scandinavia are forward of the UK, opening outlets with out checkout assistants, safety guards or every other members of workers current. As an alternative, clients use their telephones to open the doorways of transport container-like shops, store fully alone and stroll out to the beep of the invoice notification on their cellphone.

In lower than three years, Stockholm-based start-up Lifvs has opened 29 of the tiny shops in distant villages throughout Sweden, which in some cases had misplaced their final nook outlets a long time in the past. Giulia Ray, a beekeeper in the village of Veckholm, 60 miles east of Stockholm, mentioned the opening of the Lifvs “shopping field” added to somewhat than took away from neighborhood spirit. “You go inside and get one thing, and possibly another person is right here and you may have a chat,” she says as she picks up necessities and restocks the cabinets together with her personal honey at the identical time.

Whereas becoming out supermarkets with the new expertise prices about £1m-per-store, the companies putting in it declare it can pay for itself inside 18 months as a result of it can hopefully eradicate theft. “With this expertise, you may’t actually steal, we know who’s in the retailer and we know the place all the merchandise are,” says Yair Holtzer, who helped develop the expertise for Trigo, an Israeli agency that fitted out the Tesco retailer, and is working with different main retailers throughout the world.

“With these programs it cuts out not simply shoplifting but in addition errors, errors and worker fraud,” he says. “These are issues that each one retailers have, and may very well be solved.”

The transparent barriers to Tesco's smart supermarket, with large blue round stickers indicating where shoppers scan their barcode to enter
In the basket: Buyers scan a barcode to enter smart supermarkets. {Photograph}: Ben Stevens/Parsons Media

Supermarkets lose about 1.4% of their mixed £200bn annual income to “shrinkage” – industry code for buyer or worker theft and admin errors.

Professor Joshua Bamfield, director of the CRR, says supermarkets thought they’d discovered an answer to queue frustration and excessive wage payments with the introduction of self-scanning machines that have been rolled out in the early 2000s and at the moment are ubiquitous. “However it is rather straightforward for patrons to skip just a few objects by means of with out scanning the barcode,” he says. “It’s fairly straightforward to get away with issues that you simply wouldn’t have the ability to at a staffed until.”

Probe slightly, and even the most upstanding mates and acquaintances have a shoplifting story – from the south London main faculty instructor who makes some extent of stealing one merchandise in each store to the author who was tapped on the shoulder by a safety guard who’d seen her faucet the display screen for one banana when she bagged two.

A research by the College of Leicester’s criminology division discovered that theft from shops with self-checkout machines was between 33 and 147% increased than these with solely conventional checkouts. The researchers additionally discovered that the quantity of self-checkout machines accessible to make use of was correlated to the degree of theft.

In response, outlets have lower down on the quantity of self-checkout machines accessible per workers member which, Bamfield says, explains why supermarkets typically annoyingly place out-of-order stickers on working terminals.

Supermarkets, together with Tesco, have additionally begun putting in screens on self-checkouts displaying a livestream of clients scanning their objects. “They’re reminding you that each motion you are taking is being filmed,” says Bamfield. “It’s like the store saying, ‘Are you positive you need to steal?’”

It’s not simply clients who steal. Bamfield’s analysis exhibits that about £1.4bn a 12 months is misplaced to shoplifting, adopted intently by £1.3bn in worker theft. The brand new expertise is designed to deal with that, too.

“It won’t appear so apparent, however a giant proportion of theft is because of workers on the take, and by eradicating workers from tills this expertise will eradicate that loss,” he says.

Bamfield believes the commonest approach workers use to steal is referred to in the industry as “the switcheroo”.

“An uncle will say to his cashier nephew, ‘I’m coming into the retailer tomorrow afternoon and I’d like a reduction,’” he explains. “When the uncle involves the checkout, the nephew can have a barcode sticker for a watermelon or orange or one thing on his palm and whereas pretending to scan the uncle’s bottles of scotch whisky the nephew will scan the watermelon sticker.”

Bamfield, who has spent a profession working with retailers, and has written a guide on shoplifting (Waterstones describes his 2012 title Shopping and Crime as “an interdisciplinary research of retail crime as a cultural phenomenon”), isn’t positive the new checkout-free supermarkets will reach eliminating shoplifting altogether.

A mobile phone, held in a hand, showing an itemised supermarket receipt
Display screen seize: customers obtain a textual content with a receipt a couple of minutes after leaving a smart retailer. {Photograph}: Ben Stevens/Parsons Media

“I used to be at a retail convention in Norwich, and one of the audio system flashed up an image of one of these new shops and mentioned, ‘Effectively, that’s the end of shoplifting.’

However, we simply don’t know but how good this expertise will probably be at lowering theft.”

Shoplifting, which was first documented in the sixteenth century, started hovering in 2014 after the regulation was modified to outline “low-value shoplifting” as a abstract offence. Which means police forces can determine to not examine thefts from outlets of items value lower than £200.

Anybody caught stealing lower than £200-worth of items can nonetheless be arrested and face prosecution, however the 2014 delinquent behaviour, crime and policing act permits them to plead responsible by put up. Police in England and Wales recorded 374,000 incidents of shoplifting in 2019 (the newest figures accessible), up from 317,000 in 2013, earlier than the regulation modified.

Retailers have responded with extra expertise. Sainsbury’s is experimenting with machine-learning “concealment detector” expertise to observe and report when customers place an merchandise of their pocket and alert in-store safety guards in actual time.

Sainsbury’s says its 30-store trial partnership with UK synthetic intelligence startup ThirdEye has helped lower theft from its spirits aisles by 47%. Razwan Ghafoor, co-founder and chief government of ThirdEye, says the expertise helps make CCTV smarter.

“You possibly can have a whole bunch of cameras in a retailer, however which feed must you be watching?” Ghafoor says on the cellphone from Heathrow as he boards a aircraft to New York the day after promoting ThirdEye to bigger rival Commonplace AI for thousands and thousands of kilos. “We’ve taught the system to study when somebody picks up an merchandise and pockets it. The system will flag it and ship a four-second clip to a human to analyze. It means the safety crew can watch so much much less footage and focus on the footage they should watch.”

No queues, much less shoplifting, decrease wage payments: the advantages of this new era of hi-tech supermarkets are clear. However campaigners are involved they characterize one other step in the UK’s march in direction of an “on a regular basis surveillance society”.

“Going to the grocery store is one of the most mundane, on a regular basis issues we do. The truth that surveillance and information gathering in such an area is being normalised is deeply troubling,” says Emmanuelle Andrews, coverage and campaigns officer at human rights group Liberty. “Shopping ought to be one of the nice levellers, the place the businessman in the sharp go well with is shoulder-to-shoulder with the pensioner on advantages. Everybody has to purchase meals, however with this expertise solely these with a smartphone and bank cards will have the ability to store there.”

In the close to time period, the greatest losers from this technological revolution are prone to be Britain’s military of 270,000 checkout employees, most of whom are girls. The pandemic has already hit retail employees onerous, with some 190,000 jobs misplaced since the begin of the first lockdown in March 2020. The Workplace for Nationwide Statistics (ONS) has recognized grocery store cashier jobs as amongst the most in danger of being changed by automation, with 65% of checkout-operator jobs mentioned to be in peril.

“The checkout-free expertise is particularly designed to eradicate jobs, and get monetary savings,” says Dr Carl Benedikt Frey, an Oxford College economist and skilled on automation whose analysis the ONS statistics are primarily based on. As much as 47% of all jobs may very well be accomplished by machines “over the subsequent decade or two”, he believes. Frey predicts that checkout employees are prone to be amongst the first to lose their jobs to the robots, alongside bar workers, farm employees and stitching machinists.

Supermarkets have provided steady employment to generations of Britons excluded from higher-skilled roles, offering modest however dependable incomes – and the prospect of development – in communities blighted by manufacturing decline.

Frey fears {that a} nationwide rollout of AI shops would ship the checkout employee the identical means as the elevator operator, which as of immediately is the just one of 270 job descriptions listed in the 1950 US census to be fully eradicated by automation.

“We expect this coming change is unprecedented, however really what is going on mirrors what we noticed in the Industrial Revolution and hollowing out of middle-income jobs,” he says. “The expertise could be very completely different, however the results on the economic system are fairly comparable.”

Again in that Holborn Tesco, amongst the acquainted each day groceries, a change is coming that would herald the greatest revolution in how we store for groceries since the opening of the first grocery store on 12 January 1948. Like their predecessors, the smart supermarkets are mentioned to be designed to make our lives simpler. However is it time to permit the store assistant to observe the elevator operator into obsolescence, or may we all study to attend slightly longer and revel in a pleasant chat at the checkout?