The arrival of Amazon Go has shoppers saying goodbye to long checkout lines and retailers saying hello to the idea of completely cashier-less systems. This, for Israeli entrepreneurs like Yair Cleper, CEO and founder of Supersmart, is a huge boon.
Last month, Amazon. the American e-commerce behemoth, introduced a new kind of store, Amazon Go, in which no checkout is required. Customers simply walk out with their items and are charged automatically as they exit.
Israel-based SuperSmart has created a similar technology using a mobile app that enables shoppers to check out in seconds without the need for a cashier.
Shoppers download an app onto their phones to scan grocery items and place them in their carts. At the point of checkout, sensors located in cart docking stations detect traceable signatures or barcodes on products to verify that the contents of cart and those logged into the phone are the same. The system completes the transaction in less than three seconds, the company says.
Cashier-less checkout systems for retail and grocery are expected to process more than $78 billion in transactions by 2022, up from an anticipated $9.8 billion last year, according to a new study from Juniper Research.
Within the next five years, more than 5,000 retail outlets are expected to deploy cashier-less systems, and the number of consumers using checkout apps is expected to reach 30 million, the study found.
Unlike Amazon Go’s technology, which is only available at the company’s stores and currently functions in an 1,800 square foot space, Supersmart is fully scalable and adaptable, said Cleper. It can be used in small convenience shops as well as big box stores with more 100,000 items, Cleper said.
The system is already in use at the Osher Ad grocery stores in Tel Aviv and its Shamgar location in Jerusalem as a result of a strategic partnership that the companies entered into a year and a half ago. Supersmart has also launched several pilots in Europe.
“The feedback has been amazing. We have been able to reach thousands of unique shoppers per month with 82 percent of customers returning to same store and using our app again,” said Cleper.
Other vendors selling similar applications do not have a full verification process, specifically the sensor technology that Supersmart has created, said Cleper. Competitors like Zebra, which provides handheld scanners to consumers that look like a phone, have also integrated Supersmart technology into their devices.
Cleper said the idea came to him three and half years ago when he went back to the same supermarket where he used to shop with his mom — and saw that nothing had changed.
“I thought the smartphone could go much deeper into the process of supermarket shopping, which is a $23 trillion industry. Research has shown that unlike other retail shopping items like clothing and electronics, which are increasingly moving online, grocery shopping in stores is a social experience that is here to stay because people like to touch and feel food with their hands,” said Cleper.
But the food retail sector suffers from two large issues: inventory loss — when items are incorrectly scanned or shoplifted — and out-of-stock situations. A recent study found that nearly 14 percent of items at self-checkout counters are not being scanned. When an item is out of stock, customers are tempted to purchase the items elsewhere, causing retailers to lose a sale.
Supersmart wants to tackle both issues.
“We are currently focused on solving the two of the largest issues in retail; inventory loss and out of stock,” said Cleper.
Supersmart is solving the out of stock issue by enabling shoppers to order items they forgot to buy at the store or are starting to run out of at home by using the app on their phones, said Cleper.
Cleper said that the system’s hardware generally costs from $2,000 to $4,000 and that integration costs are dependent on the scale of the project. He added that the return on investment is recaptured within months from savings realized by the decreased loss of inventory and customer retention.
The Rosh Ha’ayin-based company, staffed with 12 employees, is working on its next round of investment which would be used to scale, said Cleper.
Cleper, a former software engineer for the Israel Defense Forces, started his first company when he was 21 years old. Since then Cleper has co-founded several startups in augmented reality, fintech and IT.