Dive Brief:

• Start-up Standard Cognition has announced a new cashierless checkout mobile solution that uses computer vision and artificial intelligence technologies to allow shoppers to pick up and pay for merchandise without having to scan it or go through a checkout line, GeekWire reports. The technology also allows stores to know more about their customers' shopping habits and what they are buying.

• The system actually involves two apps, one for the store and one for the shopper. The shopper’s app senses and identifies the items that a shopper picks up, allowing automatic payment without any further scanning, while the store app tracks shoppers to provide store management information about where shoppers are browsing, what items they are buying and other details.

• Standard Cognition charges retailers a small transaction fee to enable use of the apps, but claims that its system can lead to lower labor costs, reduced shrinkage, more accurate inventory tracking and the ability to use in-store real estate once allocated to checkout lines for other purposes.

Dive Insight:

Michael Suswal, co-founder and chief operating officer of Standard Cognition, told Retail Dive his company's efforts grew out of an interest in using computer vision and AI to help retailers reduce loss and revenue shrinkage to intentional and accidental theft, inaccurate inventory tracking, incorrect price scanning and other issues. Yet, its solution arrives at a time when grocery retailers, particularly emerging giants Amazon and Walmart, are aggressively pursuing cashierless checkout as a way to modernize grocery shopping and upgrade the overall customer experience.

Standard Cognition is using a decidedly different approach than Walmart, which is relying on shoppers to to carry out much of the transaction themselves. In Walmart's model, shoppers must download a mobile app with a barcode scanner and then use it to scan the items they want to buy before initiating payment themselves. Standard Cognition, on the other hand, is combining computer vision technology and AI to recognize items while keeping shopper identities anonymous, and the app automatically registers and initiates payment without any further action on the shopper's behalf.

Suswal said those differences are important. "We like Walmart, and Scan & Go is an interesting approach to the cashierless model, but it also adds pressure on the shopper to take action to scan the product and make the payment," he said. "It is not truly frictionless, which is what we're aiming for. We are trying to take the machines that people need to interface with out of the equation, and be more automated."

Amazon is also using computer vision technology and AI with its Amazon Go pilot program, but it has reportedly run into glitches that have caused it to postpone further expansion.

Ultimately, Standard Cognition is trying to give retailers a hassle-free, pre-packaged solution for implementing cashierless checkout, while also giving them a system that provides them with rich in-store data analytics of the kind they might expect from e-commerce sites. For some retailers, a third-party app like Standard Cognition's could be their best hope of keeping up with Amazon and Walmart without having to develop their own cashierless systems.

Suswal said he could not say much about who Standard Cognition is talking to right now about setting up pilot programs, but he claimed that all kinds of retailers, and not just grocery stores, are interested. If that's the case, cashierless checkout could be one of the more interesting retail technology evolutions to watch over the next year.