Start-up offers checkout-free systems for grocery retailers threatened by Amazon’s push into the market
A start-up based in Tel Aviv said Monday that it has raised $22 million to support its checkout-free systems, which will enable grocery retailers to push back against Amazon and its Amazon Go stores.
The Lowdown: Trigo, a computer-vision technology vendor, raised the money in A round funding led by Red Dot Capital, as well as existing investors Vertex Ventures and Hetz Ventures. The money will enable Trigo to scale its technology to support large stores that are up to twice the size of Amazon Go retail shops.
The Details: Amazon has muscled itself into the massive global grocery retail market with not only the introduction of its highly automated Amazon Go brick-and-mortar stores but also its $13.7 billion acquisition of national grocer Whole Foods in 2017. With those moves, Amazon has positioned itself as a direct competitor to grocery chains, which are concerned that Amazon is trying to do to them what the giant online retailer has done to other markets, such as bookstores.
National grocery retailers such as Kroger have turned to other tech vendors like Microsoft Azure, Google Cloud, and Oracle Cloud for help in modernizing their operations and improving the customer experience to retain customers and fend off Amazon.
Trigo, which already has raised a total of $29 million since launching in 2018, wants to be part of the solution with its computer-vision system, which leverages artificial intelligence (AI) techniques and 3D space-mapping technology that can identify and record items taken by shoppers while in the store and enable customers to avoid getting on checkout lines or scanning items. The shoppers are billed automatically and can pay by cash or credit card.
Customers also can personalize their in-store experience by opting into a loyalty program to identify themselves and enabling the store chain to learn their purchases. By opting out, shoppers can have an “unidentified experience,” according to the company. Either way, shoppers will have the checkout-free experience.
Trigo is partnering with several global grocery chains in the United States, Europe, and Israel, including Shufersal, which plans to deploy Trigo’s technology in 280 stores in the next five years. The technology is being used in stores as large as 5,000 square feet.
The Impact: The grocery retail business is a massive opportunity for tech vendors and channel players. Analysts with Grand View Research expect the global market to hit $12.24 trillion by 2020, growing at 6.9% a year. Grocery chains are prime targets for modernization and can leverage a broad array of technologies to improve the delivery of goods and products to customers and improve the overall shopping experience, an important step given the growing world population and the increasing spending power of populations in emerging economies.
Background: Amazon is betting that its huge online presence and large customer base will enable it to make a mark in the retail grocery space. The company has already opened 18 Amazon Go stores as of early this year and plans for more in such locations as New York, San Francisco, and Seattle.
The Buzz: “There is very strong demand globally among grocery retailers to dramatically improve customer experience,” said Michael Gabay, co-founder and CEO of Trigo. “The common denominator is that everyone is searching for technology to enable the most seamless in-and-out shopping experience. These new funds will be used to scale our technology further and support our global expansion.”
“We believe that Trigo’s world-leading computer-vision team will be the first to scale this technology globally and unlock the full potential of a true grocery-wide revolution,” said Barak Salomon, managing partner of Red Dot Capital. “The process of manually scanning barcodes for each separate item at checkout is outdated and time-consuming. Trigo’s technology is going to save brick and mortar, revitalizing the in-store experience while keeping the best part of shopping alive.”