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Stores face new challenges in a world forever changed by the pandemic. Amazon and other tech giants are disrupting their business. But perhaps as urgently, supply chains haven’t disappeared, presenting retailers with more inventory issues. In the March Retail Perceptions survey, seven in 10 (71%) shoppers said they felt out-of-stocks — that is, times when items are unavailable — are worse now than at the start of the pandemic.
While there’s no silver bullet, Raz Golan makes the case that “smart” storage technology — specifically his company’s — can help solve many of the problems associated with stocking and storage. He is the co-founder of Shopic, which sells clip-screen hardware for shopping carts that serves as a self-service checkout window that identifies ads.
Investors see potential. Today, Shopic announced that it has raised $35 million in a Series B funding round led by Qualcomm Ventures, along with Vintage Investment Partners, Clal Insurance, IBI Tech Fund, Tal Ventures and Shufersal. While Golan did not disclose the valuation, a source familiar with the matter told TechCrunch that it is in the “hundreds of millions of dollars” and “significant” range.
Golan, previously a security researcher at Check Point and a three-time entrepreneur, co-founded Shopik in 2015 with Eran Kravitz and Dan Bendler for a brief stint at Check Point. The three met while serving in the Israel Defense Forces, and the Shopich model began to take shape.
Image Credits: Shop
“We wanted to find ways to facilitate shopping experiences and close the gap between online commerce and physical stores,” Golan told TechCrunch in an email interview. “Our first product was a ‘scan and go’ solution using specialized terminals or smartphones. We realized that large supermarkets needed a unique solution if they were to offer a complete interactive experience to their customers, so we developed Shopik’s unique smart cart solution.
The ShopPic device is designed to attach to shopping carts and fill through a wall-mounted shelf unit. Two cameras point to the cart’s basket of food footage through computer vision algorithms that detect when products are added to or removed from the cart. Alongside the checkout, shoppers see aisles and advertisements for in-store manufactured or third-party products.
Stores can integrate the Shopic platform with online and in-store advertising platforms, as well as point-of-sale and inventory systems. They also have the option to allow customers to bypass the checkout line using touch.
Shopify updates its database of more than 50,000 products with up to 10,000 new entries each week to train its item recognition algorithms, Golan says. There’s a bit of an onboarding process — the first time Shopik’s devices are deployed in a store, they need to be exposed to each item at least once — but Golan insists that Shopik is streamlining installations.
“[In the supermarket,] “New items are added every week, and existing items change their appearance and have to be retrained,” Golan said. [O]Our algorithms learn and improve automatically throughout the use of the system. In this way, even if a new item enters the shelf without any training, it can already be recognized by the system within a day or even a few hours.
This year, Shopify plans to expand the amount of data it collects by introducing side-by-side rack-mount cameras on the device. The cameras look for missing products as well as price tag errors, Golan says, and the shelves are aligned with planograms, which show where items should be placed to maximize sales.
“This provides valuable data to improve the store and the listing,” Golan said.
Shopic says it’s working with “some of the biggest supermarkets” in Europe, the US and Israel, but the startup faces an uphill battle as it tries to corner the market for “smart cart” technology. Amazon has a rival technology called Dash Cart, which is currently being tested at select Whole Foods and Amazon Hotspots. Instacart owns Caper AI, a company developing self-checkout carts, including one tested at an Ohio Kroger store. Israeli startup WalkOut offers a similar tool to ShopPic, and Veve — one of ShopPic’s closest rivals — recently partnered to bring its shopping cart platform to Albertsons stores.
Image Credits: Shop
Shopic also has indirect competitors in “cashierless” solutions such as Trigo, AiFi and Grabango, which use camera systems to automatically check which items shoppers are holding and after leaving the store. Two years ago, after Amazon expanded beyond its Amazon Go stores to Whole Foods locations, it began licensing the Just Walk Out system to third-party merchants.
But a step back for a moment, consumers are not clear want First of all, “smart carts”. Walmart famously received a patent explosion for a smart cart that could measure a shopper’s heart rate, temperature, speed and the amount of force applied to the handle as they move through a store. Smart shopping carts also collect personal information that is not always securely stored, such as partial debit and credit card numbers. A security report released in October 2021 confirmed that Caper’s system was leaking data from electronic invoices sent via SMS.
Golan claims that Shopify is protecting privacy, anonymizing purchase data and blurring shoppers’ faces if caught on camera. Additionally, the company is not using the data for monetization or “for any purpose outside of the platform’s boundaries,” emphasizing that the data belongs to Shopik’s retail customers. Shopic makes money only by charging customers subscription fees for both hardware and software usage.
Whether consumers like it or not, demand for smart carts may be too strong for retailers to handle — especially if the price is right. By speeding up the inspection process, they reduce the need for labor, which is an attractive prospect at a time when labor shortages persist. What’s more, smart carts’ ability to track shoppers’ preferences in detail promises to boost purchases—at least in theory. Citing internal data, Golan Shopik said shoppers’ monthly spending in some stores has increased by up to 8 percent.
“Our solution is completely commercial, and to date, our smart carts have processed hundreds of millions of dollars worth of transactions with tens of thousands of consumers,” Golan continued. As we serve a less cyclical industry and our solutions are focused on optimization and savings, we are less affected by the general slowdown in technology.That said, we always monitor the macro situation and ensure that we steer ourselves prudently and frugally.
In the coming months, Shopic – which has raised $56 million in capital to date – plans to focus on customer acquisition and deployment with existing customers. The company plans to expand its headcount by hiring approximately 30 employees to grow to more than 100 by the end of the year.
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