Our check-out free shopping is not that different from ordinary shopping. You walk into a store, you grab what you want and you go home. The only difference is there’s no more line...
Q: How is Grabango different than Amazon Go?
Will: Consumers are wanting and demanding more convenience. If you think about a product like an Apple watch, the only functionality the Apple watch serves is to save me the three seconds it takes to get my smartphone out of my pocket. That’s all it does, but tremendously popular because that little bit of convenience is valuable to us consumers. Convenience is a megatrend.
Q: How are your enabled stores different than a standard store?
Will: Our check-out free shopping is not that different from ordinary shopping. You walk into a store, you grab what you want and you go home. The only difference is there’s no more line, there’s no more conveyor belt, and there’s no more scanning items one at a time and so the exit experience is just smoother. It’s literally the same stores, the same products, the same people working in the stores. There is no change except that exit experience.
We don’t want to do what Amazon Go did and open a bunch of new stores. We want to meet people where they already shop and we recognize that people in the retail business are really really good at being in the retail business. Our tech was built around the idea that we are not changing anything else in the store.
The technology that most others use is based on shelf sensors and a lot of tiny scales in the store. Amazon calls it “sensor fusion.” The systems are expensive to install and expensive to maintain. The sensors are in direct contact with product and exposed to direct wear and tear. There’s a tremendous number of single points of failure.
They recognize an item by where it’s located and what it weighs. If you take a can of Coke and a can of Pepsi and you swap them the system gets confused. If you put the Coke where the Pepsi is supposed to be, and they both weigh 12 ounces, the system is blind to that.
We’re vision only. We don’t touch the shelves or merchandise. Our only sensors are overhead to minimize wear and tear and maximize reliability. We tell a Coke from Pepsi, not by where they are and not by what they weigh, but by how they look. If you put a Coke in the wrong place, we’re fine. It’s still a Coke. We can still sell it, no problem.
The downstream implications of that tech decision are many. For example, if you go into a typical store before Mother’s Day or the 4th of July, there are pop-up promotional cardboard product displays. You can’t put a shelf sensor on those little cardboard pop ups. Vision-based systems have no problem with that. There’s a fairly long list of examples like that that don’t work well with sensors or scales but vision-based systems accommodate.
There’s some retailers like Walmart that sell a lot of the produce per each and a lot of the produce by weight. We have technology that suits either mode. If you want to sell carrots by the 16-ounce bag or per-each we can recognize that. If you want to sell carrots by weight and customers bag them, someone has got to weigh it. We know they’re carrots. We know whether they’re organic carrots or not. We know the price. We just don’t know the weight. So the consumer can weigh them, either in a checkout section or in the product section.
Q: Does your system ever get overwhelmed by high traffic?
Will: We design our systems to operate smoothly at twice the fire code. Our speed limit is simple. As long as shoppers move no faster than Usain Bolt at a full sprint, we can handle it. We figured that was pretty safe.
Q: How does checkout-free change the way shoppers themselves behave?
Will: The first few times someone shops at Grabango, there’s this moment of disorientation. “Wait, can I just leave? Is that really okay?” And by the third or fourth shop, you get it. Every store that we’re live in today is hybrid use. They maintain a traditional point-of-sale system and checkout lines for shoppers that don’t want to use Grabango. We integrate with the POS systems.
Q: How do you make sure that you are only capturing the data that you want and that you’re keeping people’s personal information safe?
Will: We take privacy very seriously. We don’t do any facial recognition. For us to incorporate it in our system would not be technically difficult. But we decided against it so we can assure people we’re not doing it because we know that a fraction of consumers don’t want it. If we are in a society where that is okay, we might do it, but we need to be on the side of the consumer all the time.
We generate a tremendous amount of data in the store — petabytes per day — but store it only long enough to process it and then we just throw it away. If you came to me and said, “I shopped at your store a year ago. Can you replay that shopping trip for me?”, we actually can’t do that because we discard that information. We never let our sensor vision data outside of our company systems. It’s also encrypted in place. We do all the security stuff as though it’s personal identifiable information, because in the raw state it is, and so we need to be really, really careful about handling it.
An individual shopper shops at a store more often after they’ve downloaded Grabango app than before. My theory is that it’s just easier. A fraction of our stores are attached to fueling stations. So, if you’re at a fueling station, you mostly go to it when you need to get gas and you might look in the window and say, “Ah, I’m not going in today. I want a candy bar, but that line is longer than my desire for a candy bar.” If you know there’s no line, that barrier goes down.
Q: How does Grabango change the way companies manage staff and stock stores?
Will: Right now when you buy a thing, you go up to the cashier and they might say “Hello” to you, but then the cashier’s attention goes to barcode scanning and working the POS. Grabango allows them to spend more of their time and focus interacting with the customer. The experience of both store associates and shoppers is much more human, it’s a person-to-person interaction like it used to be back 100 years ago before there was electronic or anything. That frees up the time of the employees to spend more time with the shoppers and with the store.
We think that’s why our shopper affinity scores are very high, our friendliness scores are high, and our stickiness numbers are high. Grabango are 97% and 96% friendliness and stickiness metrics, which I’ve never seen anywhere in any industry before. You’re taking this pain out of people’s lives and giving them back time. It’s the gift of time.
Q: I was just curious about that. Related, how does creating this level of automation change the job descriptions and daily activities? I think you answered this to a certain degree, like that they’re spending more time talking to the customer.
Will: It’s different by retailer. Every retailer has a different way of managing their team, but they all enjoy a better customer connection. That’s definitely something, you have more time to spend with your customers, which is definitely a huge bonus.Some retailers are taking that extra available bandwidth and saying, “We want our stores to look nicer,” so spend more time doing tidying and cleaning, but different ones. That’s just one example. They’re doing different things.
Q: How have you evolved Grabango to improve product — market fit over the past three-four years?
Will: The goal of the company is to become ubiquitous and be taken for granted — like email or the smartphone. The first time you use it you’re like, “Hey, this is cool.” By the third month, you’re like, “I take this totally for granted. I completely need this.” To get there takes work and we’re learning all the time. For example, the technology was built and tested entirely in California. We deployed our first store in Pittsburgh in 2020. We were 3,000 miles away operating stores remotely. It was working great. Then a few months later our accuracy numbers went down. We looked at what was happening and…it turns out on the East Coast there are winters. People wear gloves. We were bad at item pickups that involved people wearing gloves and really bad at pickups with people wearing mittens.
If that’s not complicated enough, sometimes people walk in wearing gloves or mittens and then take them off at some point during their shop. They also might take off their coats. So we had to retrain the system to deal with these changes and accurately track pickups and shoppers. The system works really well but we are constantly refining on edge cases.
Q: What are second order effects of check-out free and Grabango?
Will: Obviously, when you install Grabango, consumers prefer the store that has it to the store across the street. The store with it gets a bunch of other benefits. Shoplifting goes away when you install Grabango, because it’s really hard to steal from a store when the store knows where all of its inventory is. That makes stores more profitable. In fact, I believe we will see increases in shoplifting in stores that do not have Grabango or vision-based technologies because the thieves will concentrate on those stores. So if shrink goes up and you lose store traffic, retail financials get uncomfortable quickly. Add to this, Grabango stores will also be able to handle higher traffic because people can walk out. That means more sales per square foot. So the case for using vision-based check-out free technology becomes compelling and I believe that will drive rapid adoption.
Those stores that are laggards are going to fall behind and eventually either fail or get acquired. There’s a decent chance the total number of stores in the country and in the world will fall.
Q: What about inventory systems?
Will: The way inventory works now is you count every item in your store once a month, and then the difference is the shrink, but that counting process is very expensive and very error-prone to walk down the aisles and count everything. Robots are very good at inventory counting, and so are we. We keep track of inventory, and we do a sweep ten times a second, so it’s nearly real-time. We know what’s in the store, and we know what’s sold. If you also give us what came in the back door, then we can maintain inventory — track back of house versus on the floor and even do what is out of place in the store. We can integrate directly into their supply chain or inventory management technology. Some retailers are doing that now.
