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Daily news and analysis about the food tech revolution

future of retail

While Amazon Struggles With Futuristic Retail, Sam’s Club is Doubling Down on Computer-Vision To Aid Store Exits

An interesting set of stories came out over the past week, which showed how two retail giants are leveraging technology to help consumers get out of the store faster.

One one hand, you have Amazon halving its Go store count to 16 locations, shifting focus to licensing its “Just Walk Out” technology to third-party retailers.

On the flip side, Walmart’s bulk membership club Sam’s Club is investing more heavily to use computer vision to aid shoppers to get out of the store faster.

The key difference? Sam’s Club is using computer vision for receipt verification. Previously, members had to stop at the exit while associates manually checked receipts, causing bottlenecks. Now, cameras at the exit automatically scan carts and verify purchases, allowing members to walk out without interruption. AI works in the background to refine accuracy, while employees are freed up to assist shoppers rather than policing receipts.

Contrast this with Just Walk Out, which is Amazon’s effort to eliminate the checkout experience all together which, it appears for many people, is still too weird and feels a little to close to shoplifting.

As I wrote last year, Just Walk Out is “a radically tech-forward evolution of checkout, but one in which Amazon appears to have widely overestimated just how many people would use it and how easy it would be to implement. Self-checkout fits most shoppers’ needs when they are in a hurry, and there aren’t that many situations where consumers feel they need to skip checkout altogether.”

Retail Apocalypse? Not If You’re A Kitchen Tech Startup

If a picture is worth a thousand words, how much are live product demos or in-store education classes worth?

Apparently a lot – at least that’s the thinking of a few kitchen startups in the Bay area opening their own experiential retail storefronts where consumers can get their hands on products and try them out.

Over the past few months, I’ve spotted three new retail storefronts that have opened or are about to open in the Bay Area. If you’re like me, you might be wondering what’s going on here? After all, running a brick and mortar storefront isn’t cheap and runs counter to the current trend where, by and large, companies are going all-in on digital futures.

My guess is because these products offer new approaches to age-old activities like cooking and brewing coffee, they could benefit from a little up-front explanation. And like New York City, influencer-heavy San Francisco is often seen as a logical place to open future-forward retail concepts in order to get the word out and get feedback on new products.

So which connected kitchen brands are leaping into retail? Here is what I’ve found on each:

Fellow Store and Playground

Coffee being poured at Fellow Playground

The first of these retail spots to open is from Fellow Products, the company behind the Stagg EKG kettle. Last fall, Fellow launched a showroom in downtown San Francisco called the Fellow Store and Playground to feature their products. The space, which looks like the love child of a Starbucks and Apple store, is less about just moving kettles as it is about engaging with folks in influencer-heavy San Francisco around the company’s products.

“We didn’t open a store to sell you a kettle,” Fellow Products CEO Jake Miller told Sprudge about their new store.  “We opened a store to teach you how to use it.”

To accomplish that, Fellow is offering brew guides, classes, interactive displays and even scheduling a series of evening events in the space.

Anova Kitchen

Anova Kitchen

Last fall, a sign went up on a window located in downtown San Francisco’s Howard Street promising a new store called “Anova Kitchen”. The new storefront, which had a “Coming Soon” on the window, is located on the bottom floor of the company’s new headquarters.

The intention for the space is similar to that of Fellow Products space: demo, sell some product, etc. Last fall, an Anova spokesperson told me they not only had plans to show off their products, but they also planned to feature some from their new parent company, Electrolux (who knows – maybe they’ll even have robot vacuum cleaners).

Anova Kitchen is supposed to open some time this spring.

Brava Home

Brava Home retail store

Finally, the latest kitchen tech startup looking to open up a retail spot is the still somewhat stealth Brava Home. The smart oven startup, which we’ve covered pretty extensively at The Spoon, looks like it’s about to part the velvet curtain and tell the world a little more about itself and, apparently, part of that strategy is a retail storefront.

Spotted at the Stanford shopping mall in Palo Alto, the new store features the tagline “Make Home Your Favorite Place to Eat.” It also has a URL on the window – bravapaloalto.com – which redirects to Brava Home’s site where they describe the retail storefront as a ‘showroom.’

I’ve confirmed with Brava that the store will open this summer.

Retail Apocalypse or Connected Kitchen Revival?

While these new storefronts seem to run counter to the current line of thinking that we’re in the midst of a brick and mortar apocalypse, big tech brands like Apple, Microsoft and Amazon have shown the value of physical retail as a way to showcase new technologies and approaches to old behaviors. Others, like B8ta, have found traction with their hands-on IoT-driven showroom concept.

Still, running retail stores are expensive, and as the high-profile implosion of experiential kitchen retailer Pirch has shown, often it’s hard to convert demos and in-store education to actual sales. While this batch of kitchen startups are much more modest and don’t involve ten of thousands of feet of expensive Manhattan real estate, it’s still too early to tell if the efforts will ultimately result in significant upticks for their brands.

But, if there’s one thing I’ve learned from the Smart Kitchen Summit startup showcase, people do love getting their hands on new cooking products and trying them out for themselves. Whether it’s a coffee robot, 3D food printer or a new type of oven, there’s nothing like actually seeing it in action.

We’ll have to see if these new retail storefronts bear fruit long term. For his part, Fellow Product’s Miller is optimistic and hasn’t ruled out expanding in the future. In an email, he told me, “We exist to help people brew great coffee through beautifully functional design, so anything we do, including retail, needs to support our mission. Although I don’t see a future where Fellow operates hundreds of stores, I can imagine extending our retail presence to select cities.”

‘Humanless Retail’ On Display at CES, But Will Humans Buy It?

One trend on display at this year’s CES is what I would describe ‘humanless retail’, where technology is used to sell physical goods to consumers without the help of humans.

Of course, this trend isn’t new. 2017 brought us a bunch of new ideas for taking the human out of the retail transaction by using machine vision/AI, IoT and more. What I saw on the show floor in Vegas is just a continuation of these concepts.

For example, last year we hear a lot about Amazon Go, a store concept where customers walk in and out without ever talking to a cashier. And this week, we saw the startup version of this in AIPoly, a company which offers a machine vision and sensor platform to create what the company calls “autonomous markets”.

Just as with Amazon Go, AIPoly customers register with the “store” and are identified as they walk in (or up to in the case of a kiosk) through facial recognition. The store then registers a purchase as the machine vision recognizes the products they pick off the shelves.

Below is a pic of the demo the company was showing off at CES.

And then there’s the Qvie, a single-product micro-vending machine that is essentially a connected lockbox version of the booze fridge in the Hilton. Qvie is targeted at the Airbnb host as a way to enable additional revenue through in-room sales, a trend that seems almost inevitable as Airbnb becomes a more and more viable alternative to hotel stays.

Finally, there’s Robomart, which can best be described as the love child of the controversial Bodega and an autonomous automobile.  The vision behind Robomart is a retailer such as 7-11 or Target would lease a fleet of Robomarts, stock them, and then bring the store to the consumer’s home. While it’s not exactly the same as Zume Pizza delivery trucks, it does something similar in making the retail location less relevant by bringing the point of presence closer to the consumer.

Robomart CEO Ali Ahmed told me he expects the first Robomarts to be available this year, which strikes me as extremely ambitious since the company is still raising funding to build out its vision. A mobile autonomous car-store combo doesn’t strike me as something you can do cheaply.

These are just three ideas I ran across in a couple hours on the floor at CES, enough to make clear that humanless retail is going to be much in 2018. The question for me is, will humans buy the idea of humanless retail, or is this just another case of Silicon Valley getting ahead of itself as it looks for addressable markets to apply new tech like AI, robotics and IoT?

The answer is yes, humanless retail is going to big. Sure, there will be lots of companies floating in the humanless retail startup deadpool before it’s all said and done (this is the case with pretty much every startup market in case you haven’t noticed), but the reason I think many of these early ideas will become much bigger and common is they’re simply evolutionary steps of what we’ve been seeing for decades and with much more rudimentary technology.

The self-service checkout at the grocery store, vending machines in your office, and the booze fridge in your hotel room are all innovations aimed at selling things to people without the need for another person to take money and put something in a bag. The only difference with these new ideas is the latest technologies to make humanless retail more convenient than ever before.

Sears Cuts Ties With Whirlpool In Another Effort To Survive

For almost a century, Sears carried staple appliance brands from Whirlpool including Maytag, JennAir and KitchenAid. But amidst the retailer’s struggles to remain profitable in a tough environment, Sears has announced it is cutting ties to Whirlpool and will no longer carry the brand’s appliances.

It appears that the retailer’s decision stemmed from Whirlpool’s attempt to raise margins in an increasingly competitive appliance market environment. In a statement, Sears commented, “Whirlpool has sought to use its dominant position in the marketplace to make demands that would have prohibited us from offering Whirlpool products to our members at a reasonable price.”

The decision is effective immediately and Sears reported that it would sell off the rest of its Whirlpool inventory while immediately pulling subsidiary brands including Maytag and KitchenAid from store floors. Sears will continue to sell its Kenmore brand and other popular appliance brands including GE, Bosch, Samsung and Electrolux.

These recent changes may not be enough to keep Sears from going under and the announcement comes in the last quarter of a rocky year for Sears; the company has been in the process of closing less profitable stores, including all those in Canada and has attempted to reinvigorate its e-commerce efforts through a partnership with Amazon. In a “if you can’t beat ’em, join ’em” mentality, Sears signed a deal with the Seattle based e-commerce giant to sell Kenmore appliances on Amazon.

Sears business dealings with Whirlpool aren’t entirely over though, the company still manufactures the Sears Kenmore line of appliances and will continue to do so according to Sears. Kenmore is attempting to remain competitive in the connected appliance space, launching a new suite of smart kitchen appliances with Amazon Alexa compatibility at the 2017 Smart Kitchen Summit.

Whirlpool, on the other hand, has spent the past several years dipping their toes into the smart kitchen space, first partnering with food platform startup Innit, then announcing voice connectivity inside their devices and after dissolving the Innit partnership, buying Yummly, one of the internet’s biggest food & recipe sites.

Podcast: Amazon Buys Whole Foods

Every now and then a deal of such magnitude happens, it makes you almost speechless when you first hear about it.

Amazon buying Whole Foods is one of those deals.

On this quick-take podcast, Mike gets together with Nomiku CEO Lisa Fetterman to discuss this mind-blowing deal, what it could mean for Amazon, what a future Amazon-ized Whole Foods could look like and the implications for the broader grocery industry.

Make sure to subscribe to the Smart Kitchen Show here on iTunes.

You can also check out Mike’s initial take on the deal over at the Spoon.

Make sure to check out the Smart Kitchen Summit, the only event about the future of food, cooking, and the kitchen. Use the discount code SPOON to get 25% off of tickets. Also, make sure to subscribe to get The Spoon in your inbox. 

Analysis: Here’s Why Amazon & Whole Foods Make Perfect Sense

Blockbuster news this morning: Amazon is acquiring Whole Foods for $13.7 billion.

Needless to say, this is a huge deal. My immediate thoughts are this:

This deal signifies Amazon’s entry into physical brick and mortar in a big way. The company, which has been toying around with future store concepts like its own bookstore and the Amazon Go grocery concept store in Seattle, is betting big on physical store formats in the future.

The company can no longer simply be called an online retailer. They are now truly omnichannel.

This gives Amazon a flagship store network for food (and other products) for pickup and delivery in markets around the country. The company, which has been building out its distributed pickup locker network in places like 7-11 around the country, as well as slowly expanding the reach of Amazon Fresh, now has its own nationwide network of storefronts that they can leverage in the rollout of both.

The combined company also provides an opportunity to experiment with loyalty program benefits for the company’s Amazon Prime members. Imagine Whole Foods promotions for Amazon Prime members and even having special shopping hours for members of its subscription-loyalty club. Amazon can make finally take its loyalty program and extend physical retail benefits, not unlike members of Costco or other membership stores have been doing for years.

Perhaps most importantly, the integration of Whole Foods provides the perfect format for Amazon’s future-forward shopping concepts that they’ve been experimenting with in their Amazon Go concept store in Seattle. While I don’t see Whole Foods going cashier-less anytime soon, I do think IoT-powered shopping could ease buyer friction in the purchasing process. Expect Whole Foods to become sensor-packed stores that analyze and understand their clients better than anyone. I also expect Amazon to integrate its own technologies such as Alexa into the shopping experience and even find ways to promote its own Amazon replenishment platform Dash in-store.

Of course, it goes without saying the Whole Foods customer is not the everyman, mass-market customer. The company, which pioneered the organic grocery movement in the early 1980s, attracts a high-income crowd that is willing to pay a premium for products. It’s not the Safeway or Target customer. That said, this is exactly the type of customer that already probably spends lots of money on Amazon.

It’s a good fit.

Last point: I think this deal is an admission by Amazon that continued high-growth is dependent on further expansion into physical brick and mortar. While online commerce will no doubt continue to grow, after spending a decade experimenting with Amazon Fresh, the company has learned that getting greater wallet share in areas like fresh produce and grocery requires physical store fronts, no matter how much Amazon spends on things like drone delivery.

Want to explore the future of grocery? Make sure to check out the Smart Kitchen Summit, the only event about the future of food, cooking, and the kitchen. Use the discount code SPOON to get 25% off of tickets. Also, make sure to subscribe to get The Spoon in your inbox. 

Google Home Adds Shopping Feature And Partnerships With National Retailers

When Google launched the Google Home voice assistant speaker, they demonstrated their commitment to the smart home and the growing trend of voice control, a trend so far led by Amazon. Taking aim at the Echo market, Google launched Home with a big vision but not as many features as enthusiasts would have liked.

Still, 2017 is the year that “works with” Google Home becomes the new “Alexa skill” and no one is counting Google out of the game. The one area where Amazon previously had an inherent lead over Google, of course, was in its powerful commerce engine. Alexa makes it easy to order items from Amazon and, if you’re a Prime member, have them brought straight to your door in two days or less.

But news last week changed that. Google announced via a blog post that it has partnered with a number of big name retailers and added the ability to voice shop from them using Google Assistant. Retail Dive has the full story on Google’s new partnerships, with brands like Costco, Walgreens, Whole Foods, Bed, Bath & Beyond and even Petsmart, Google is clearly trying to cover its commerce bases with everything from food and grocery to household and pharmacy.

Google’s blog post on the announcement gives users a quick walk-through of how to get started. With simple commands like “Ok Google, how do I shop?” Google Assistant will walk users through the process. Or you can also just say “Ok Google, order paper towels” and presumably, it will. It’s less clear exactly who you’re getting paper towels from, though it’s likely you have to set up store preferences in your Google Home account. You also have to add a credit card on file to automatically charge upon ordering.

Credit: Google

The blog also says the service is free – for now. After April 30, it appears Google may have plans to create some type of Prime-esque membership for users to be able to take advantage of voice command shopping.

Google’s massive search and data engine give Google Home inherent advantages in the long run over competitive voice assistants like Amazon’s Echo. And with this new shopping feature, they’re looking to grab some of Amazon’s native territory as well.

Target Axes Store of Future & Project Goldfish Innovation Programs

Wall Street can be cruel, especially when it comes to innovation initiatives.

Last week, the Minneapolis Star Tribune reported Target has axed two of its innovation initiatives, the Store of the Future and Project Goldfish, after the company missed expectations for the holiday season. The Store of the Future concept, which was expected to launch this year, was a rethink of Target that included smaller format stores and robots for order fulfillment.

“At Target, we regularly pause to evaluate our business and have to make tough choices about where our company is best served to invest our time and resources,” Dustee Jenkins, Target’s senior vice president of communications, told the Star Tribune. “We recently made some changes to the innovation portfolio to refocus our efforts on supporting our core business, both in stores and online, and delivering against our strategic priorities.”

The moves also comes after departures of some key execs, including their head of innovation, Jamil Ghani, left for Amazon. The loss of Ghani is doubly painful since many analysts believe Amazon is responsible for slowing sales at Target and other large retailers.

From the Star Tribune:

The cutbacks have left some within the company unsettled about Target’s long-term plans for growth and innovation, especially as more consumers are flocking to Amazon.com. The online behemoth is known for innovation, including its one-hour Prime Now delivery service and a new store concept without registers that it recently opened in Seattle.

However, not all innovation efforts at Target have seen the ax. The company’s recently relaunched Open House concept store in San Francisco reopens this week.

Editors Note: I will be hosting an event at the store on February 16th on the future of the smart kitchen. Sign up for our newsletter to get more info on that event.