Grocery smart carts aim to be the saving grace for self-checkout hate

“Customers feel like they are buying something in a physical environment, but they’re still able to interact with technology to enhance the customer experience,” Veeve founder Shariq Siddiqui told us.
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Gif: Dianna “Mick” McDougall, Source: Mviamonte/Getty Images

· 7 min read

For years, grocers have been looking for the perfect way to make checkout frictionless because, in case you haven’t heard, consumers don’t love self-checkout (and many have been rooting for its demise).

Amazon’s Just Walk Out technology was presented as the next-gen checkout solution when it debuted at a Seattle Amazon Go store in 2018. That’s the same year Shariq Siddiqui—formerly head of product at Amazon, where he led the integration of Alexa to brick-and-mortar retailers—left the e-commerce giant to found smart-cart startup Veeve, essentially a “POS on wheels.” He was armed with validation that consumers were eager to skip the checkout line, as well as critiques of the slow-growing Just Walk Out tech.

“The challenges that I saw with Amazon Go was just scaling—both from a technology perspective, as well as from the economic side of things,” he said. “And so really, the idea was: could you effectively build Amazon Go-like technology and add a shopping cart?”

Several smart-cart startups (smart-cartups?) have rolled onto the scene in recent years, along with Amazon itself, which is “a silent nod to the fact that the shopping-cart form factor is a really, really important element for grocery stores to this day,” noted Lindon Gao, founder of smart-cart maker Caper AI, which was acquired by Instacart last year.

But despite buzzy partnerships with major grocers, like Kroger and Albertsons, you’re still unlikely to find a high-tech shopping cart at a grocery store near you. So are smart carts the savior to deliver us from the self-checkout vitriol, or what?

Across the aisle

Albertsons and Veeve see the smart cart as an opportunity to bring “the ease and integration of e-commerce right to the grocery cart,” Alyse Wuson, senior director of digital transformation at Albertsons Companies, said in a statement in May, bringing the online experience to where grocery stores make the bulk of their transactions.

“When you add an item to your Amazon cart, there is a lot of recommendations, upsell, cross-sell promotions—all of those capabilities are now being built into the cart directly,” Siddiqui said. “Customers feel like they are buying something in a physical environment, but they’re still able to interact with technology to enhance the customer experience.”

  • He said it takes Veeve up to four weeks to integrate into a retailer’s POS system, and one day to deploy carts (10–20 for a pilot, 40 for a wider launch) to stores.
  • Consumers can see their running total, find and apply coupons, identify new products, and check out—all on their own all through the cart’s screen. Retailers, too, get some valuable data, including information about how shoppers walk around the store and which items they take out of their cart, to help grocers make better choices going forward, Siddiqui said.

Instacart CEO Fidji Simo expressed similar sentiment when the grocery-delivery company bought Caper for $350 million, saying smart carts would help the company in its goal to “address consumer needs across both online and in-store shopping.”

For Caper’s Gao (who has since transitioned to VP of engineering, Caper, at Instacart), the idea for smart carts was sparked by door-to-door visits to 150 New York City and New Jersey-area retailers. The major takeaway: grocers wanted a way to streamline checkout and improve customer service, plus get consumers to shop more, he said.

Caper considered Amazon Go-like tech, but retailers weren’t into the “infrastructure overhaul” it would require, he said, and simply wanted “something that just works.” The cart acts as a plug-and-play solution—with a database of 20 million+ items to determine what shoppers are putting in it—Gao said, and the company has since partnered with Kroger, Wakefern, and Canada’s Sobeys.

  • Caper increases grocers’ basket size by 18%, per its website, and was the first smart cart in the US to be approved by National Type Evaluation Program (NTEP), a one- to two-year process that tests the accuracy and durability of the cart, required for selling products that are priced by weight and measures.
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“Whenever you’re not doing something right…the self-checkout will yell at you, and customers or staff will come over and then resolve your issues for you,” Gao said. “From a Caper Cart standpoint, our goal is to reduce every single friction in the entire shopping experience.”

Training wheels

While smart carts offer a “distinctive solution” amid the race to establish a more efficient checkout, a few elements are slowing their roll, CBInsights principal analyst Laura Kennedy told us.

“It’s a really big infrastructure investment to bring an entirely new, expensive cart [and] new hardware into the store,” Kennedy noted. Smart carts reportedly cost $5,000–$10,000 each—Veeve and Caper declined to share numbers—while standard metal ones cost just $100.

  • Siddiqui said, at scale, a deployment of Veeve carts would be a first-year investment of under $100,000, which he noted is cheaper than self-checkout stations, which can cost ~$125,000 for a four-lane setup, per MIT. Caper’s website states it takes 10 months for retailers to break even.

The customer experience could use some tweaks, too. Siddiqui said Veeve is currently working on weatherproofing its carts so shoppers can take them out to the parking lot, and is also making them larger and deeper.

Amazon announced similar updates to its Dash Cart last month, doubling its capacity from two grocery bags to four, and making it weather resistant. Dash Carts are now also lighter and have an all-day battery life—all changes stemming from consumer feedback, internal testing, and improved tech, Dilip Kumar, Amazon’s VP of physical retail and technology, wrote on the company’s website.

  • The new Dash Carts will be deployed at a Westford, Massachusetts, Whole Foods location “in the coming months,” per Amazon, along with some Amazon Fresh stores.

Any new tech (like grocery robots) faces a curve for retailer adoption, Siddiqui noted. “There is that pattern that we continue to see, which is there is an initial resistance both from the retailers as well as customers.” OG shopping carts, shopping baskets, and (shock!) self-checkout faced similar pushback when they were first introduced, he noted.

Carting off: Other forms of smart-cart tech could also challenge the major smart-cart players. CBInsights’s Kennedy echoed that it has historically been difficult for retailers to “overhaul systems that are really, really entrenched,” noting there’s “a lot of value around solutions that bolt on to existing technology and allow a store to be retrofit for the technologies.”

This might present an opportunity for Israel-based startup Shopic, which is standing out among what its CEO and co-founder Raz Golan calls “monolithic” smart carts by offering a clip-on touchscreen device for grocers to instantly up their traditional carts’ smarts. Consumers can pick up the equipment at a shelving unit within the store (retailers usually have 50–70 devices), attach it to the handle of the cart, and return it when they’re done shopping.

  • When tested in Israeli grocer Shufersal, it boosted shoppers’ monthly spend by 8%, producing 78% larger basket values, according to the company.
  • Golan claims Shopic is a cheaper alternative to typical smart carts because it offers retailers software and hardware as a service, so they pay a fixed fee per month to use the devices, rather than making the full investment up front.

The company bagged $35 million in fresh funding earlier this month. It’s currently working with retailers in Israel, Latin America, Europe, and the US, though Golan declined to share specific chains.

Looking ahead…Golan and Gao believe it could take more than three years for the widespread adoption of smart carts. As they prep to move past the pilot stage, support from grocery giants is playing a major part in getting the industry’s wheels turning, Siddiqui said.

“The leaders in this space, like the Albertsons, and the Krogers, and the Walmarts of the world will definitely be the ones applying these technologies now, learning from how the customers engage with it, but eventually, there’s gonna be a massive trickle-down effect,” he added.

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Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.