US retail giant Walmart canceled its Scan & Go service for automated scanning with no checkout counter earlier this year. The system was installed in 100 of the chain's stores, and according to media reports, the main reason for canceling the system was a dramatic rise in thefts. Yair Cleper, founder and CEO of Israeli startup SuperSmart, hopes to be the one to solve this problem and enable Walmart to compete with the corresponding service offered by Amazon in its Amazon Go chain.
Walmart CEO Doug McMillon met with Cleper during his visit to Israel last week. "A month ago, I got a call telling me that Walmart's CEO wanted to meet with me," Cleper told "Globes." "At the meeting, we got confirmation that the reason that the pilot service was halted, which was designed to provide the service that currently exists at Amazon Go, was because loss rates soared."
Cleper says that at the meeting, Walmart's representatives confirmed that the number of unscanned products disappearing from inventory, whether by mistake or theft, jumped in branches in which the pilot scanning app was being used. "This is exactly the problem that our product is designed to solve," Cleper says. His company is developing a system that integrates the app and a smart scanning device.
Last Tuesday, a delegation of seven Walmart representatives visited Israel and remained in the country until Friday. This was not, however, Walmart's first encounter with the Israeli startup. Two years ago, SuperSmart presented its technology to McMillon, but no cooperative venture emerged from that meeting.
"They were very enthusiastic about the fact that the technology was plug and play, meaning that it connects to the existing infrastructure and app already being used by the chain," Cleper says.
At the end of last week's meeting, another meeting was scheduled for Cleper in two weeks at Walmart's headquarters in Bentonville, where he will meet representatives of the app's operators in stores.
"Globes": What do you expect to result from the meeting?
Cleper: "For us, everything is on the table: installing the technology at the company, buying the technology, or an investment. Working with Walmart is the dream of every startup. Now, two years after the company was founded, it's clear why this is the thing I want the most."
How does SuperSmart's technology work? During the purchase, the customer scans the products with the app. When the purchase is completed, instead of going to the ordinary cash register and standing in line, the customer inserts the product into the device, where SuperSmart's technology scans the contents of the shopping cart in three seconds in order to calculate the bill and make sure that all the products in the cart were scanned. The system is based on artificial intelligence technology using cameras, weight sensors, and algorithms that compare the customer's list with the actual contents of the cart. If the list does not match the contents, the system is able to detect which product was forgotten.
The problem of thefts afflicts quite a few chains using an automatic scanner. Surveys by SuperSmart found that at least one mistake was found in over 60% of the transactions conducted with a scanning purchase app: a product mistakenly scanned and not taken by the customer, or an unscanned product taken. "Two weeks ago, we made a presentation at Sainsbury's, the second largest UK supermarket chain. They told us that there were errors in 50% of the scanning transactions. Everyone is afraid to install the solution because of this - the retailers' profit margins are already very small. Just imagine how many more bags of snacks you have to sell in order to make back the lost revenue from one bag," Cleper explains.
"Business Insider" recently quoted former head of checkout innovation at Walmart Joel Larson as saying, "You think that the theft is bad on self-checkouts? Wait until you try Scan & Go, where nobody is watching the customers out in the aisles." He added that a customer had tried to leave a Walmart store with a cart filled with about 100 items, only 40 of which were scanned with Scan & Go.
In addition to mistakes costing the chain money, there is also a certain percentage of mistakes that harm the consumer. Cleper says, "Sometimes customers make mistakes to their own disadvantage; they mistakenly scan too many products or scan the same product twice. Some of our product's capabilities consist of detecting mistakes to the customer's disadvantage. I have never seen customers so delighted as when they come to checkout and are told that they have to pay less for the same shopping cart."
SuperSmart currently works openly with two chains: Israel chain Osher Ad, which has also invested in SuperSmart, and international Metro Retail Stores Group. At the same time, SuperSmart is conducting pilots in various stages at a number of other chains in Europe. "My aspiration is to put the product in every store in the world. We want to be the ones who made the self-scanning sector take off worldwide and prevented mistakes and loss."
Published by Globes, Israel business news - en.globes.co.il - on March 31, 2019
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