One of the questions that comes up when talking about Amazon Go cashierless stores is when the grab-and-go technology experience will scale up from a bodega-sized convenience store to a full-on grocery experience. But instead of thinking big, startup DeepMagic is going the other direction: developing small unattended, cashierless micro-retail outlets.
Using a combination of computer vision and artificial intelligence (AI), DeepMagic creates self-contained, cashierless walk-in “Qick Kiosks” that can be placed within existing locations. Customers use an app on their phone to unlock the kiosk doors, go inside, grab what they want and leave. Cameras in the Qick Kiosk keep track of everything taken (just like Amazon Go) and automatically charge your card when you exit the kiosk.
DeepMagic doesn’t want to own and operate its own chain of cashierless stores; rather, it wants to provide these kiosks as a way to create retail opportunities within existing high-traffic areas. Think: pop-up shops inside office building lobbies or big apartment complexes.
“It’s not about replacing existing store formats,” DeepMagic Co-Founder and CEO, Bernd Schoner told me by phone. “We want to give store owners the ability to create additional locations. Office space not big enough for a canteen? You can put a kiosk in that space.’
Schoner said DeepMagic’s approach lets retailers easily create satellite locations that can operate 24/7, without having to build a full store, or hire extra staff. For instance a bodega could run a smaller bodega inside a nearby apartment building.
DeepMagic combines a number of elements and approaches already happening in the automated, cashierless retail space. It has the Amazon grab-and-Go element. But it’s also similar to Stockwell (formerly Bodega), which creates even computer vision driven, credenza-sized containers with snacks and sundries for densely populated buildings. And Schoner’s canteen example is reminiscent of Byte Foods, which puts smart fridges stocked with food in offices.
While DeepMagic’s kiosks may add flexibility to retail locations, the company’s approach has a downside: the kiosks can only deal with one purchaser at a time. There can be multiple people in the same kiosks, but whatever they grab will be charged to the person who unlocked the store with their phone. So it seems like there could be lines that form to get into each kiosk, which kind of kills the convenience of cashierless checkout.
Having said that, DeepMagic’s turnkey kiosks could be big enough to offer a decent selection of items and branding experience for a retailer, yet small enough to create new retail opportunities within existing locations at an attractive cost. That is, if DeepMagic kiosks are at an attractive cost. Schoner wouldn’t disclose pricing on a DeepMagic kiosk, only saying that there will most likely be some combination of lease, SaaS subscription and percentage of retail sales.
DeepMagic has, however, proved its technology in public. Earlier this year, Cisco set up a DeepMagic kiosk to sell swag at its conference. Schoner says the company is working on a number of other deals right now. DeepMagic is self-funded, and has 15 employees across New York and Mexico.
While we wait and see how big cashierless stores can scale up, we’ll also have to keep an eye out to see if staying small pays off for DeepMagic.