Israeli startup A2Z Smart Technologies Ltd. has signed an agreement to roll out 1,000 of its smart pick-and-go, self-checkout shopping carts at Hastok home design and household concept stores across the country in a deal valued at NIS 30 million ($8.3 million).
Hastok will deploy 1,000 of the smart carts at the 40 stores it operates across Israel. The deal includes an upfront order payment, a guaranteed monthly payment, and a revenue share agreement.
The smart shopping platform developed by A2Z’s subsidiary Cust2Mate is based on a computer-vision system technology that automatically scans selected products as customers place them into the cart. The smart cart is equipped with a touch screen, a built-in barcode reader, a weighing system, and cameras that protect stores against fraud. The Cust2Mate smart cart also has a payment system for shoppers to skip the checkout line.
The Cust2Mate smart cart platform keeps track of every purchase, alerting store managers to “hot” items and restocking needs, which provides increased control and helps to lower labor costs for retail chain operators, A2Z said.
Founded in 1988 by serial entrepreneur Joseph Ben Tsur, Nasdaq-listed A2Z has been designing smart systems for Israel’s defense and security forces, including automotive fire-prevention systems, remote-controlled bomb-disposal and firefighting robots, as well as portable energy smart-packs for the civilian market. Building on the knowhow, Ben Tsur established Cust2Mate in 2016 to develop a smart cart technology platform for the retail sector.
“We believe Cust2Mate will provide our customers with a seamless shopping experience and help increase customer satisfaction and loyalty, and simultaneously increase our sales and reduce our operating costs,” said Hastok CEO Ofer Barak.
The checkout-free smart shopping carts are already deployed at Israel’s Yochananof grocery chain stores. As of the end of 2022, the retail chain purchased a total of 1,300 smart carts in a deal worth NIS 35 million. Outside of Israel, the smart carts have been piloted at retail and grocery stores in New York, Mexico, Europe, and other locations.
“Our strategy is to continue to expand in Israel and around the world and to create a wide variety of carts with advanced data services for various types of networks,” said Cust2Mate CEO Guy Moraduch. “We see the collaboration with the Hastok network as an opportunity to enter into additional areas, contribute to them, and improve the customer’s shopping experience and the service provided to them, while simultaneously creating value for the network itself.”
The trend of checkout-free shopping technologies in the smart cart space is emerging as supermarket and retail giants worldwide are scrambling to offer new consumer experiences and conveniences — so-called frictionless shopping — amid fierce competition, razor-thin margins in the grocery space, supply chain management issues and the continued expansion of the likes of Amazon into the grocery retail business.
A2Z is not the only Israeli startup pushing into the market for frictionless shopping tech. Tel Aviv-based startup Shopic has developed a clip-on device for smart carts that it says can be placed on any supermarket shopping cart. As customers do their shopping, the artificial intelligence-powered device identifies products being put in and taken out of the smart cart without requiring the scanning of barcodes. In February, Shufersal, Israel’s largest supermarket chain, announced that it will deploy at least 2,000 of the devices across 30 stores nationwide.
Another one is Israeli computer vision startup Trigo, which has developed grab-and-go, checkout-free shopping tech, that is already operational at Tesco grocery stores in London, REWE shops in Berlin and Cologne, a Netto City store in Munich and an Aldi Nord in the central Dutch city of Utrecht.
Trigo’s technology allows shoppers to walk into grocery retail stores, select their items and walk out without having to stand in the checkout line or fiddle with self-checkout stands. Payments and receipts are handled digitally. To do this, the startup applies its proprietary algorithms to ceiling-mounted cameras that can automatically track shoppers’ movements and product choices in the stores in real time.
Smart cashier-less checkout technologies for retail and grocery are expected to process $387 billion in transactions by 2025, up from about $2 billion in 2020, according to a study from Juniper Research.