Contactless supermarkets are here. But at what cost?

This post was originally published on May 5, 2020.

Contactless stores and delivery options have shot into the mainstream thanks to the spread of Covid-19, and it’s very possible that they’ll be an accepted phenomenon around the world by the time this pandemic dies down.

From Walmart to Burger King and Nike to Hyundai, companies are scrambling to rethink their retail models with the emergence of the virus, which has raised consumers’ aversion to dealing with fellow humans. As shoppers grow increasingly wary of transacting with other humans, everyday activities like buying groceries might be permanently altered.

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The tech has been brewing

When we talk about contactless, cashierless stores, we have to look no further than the launch of Amazon Go in 2018. The grocery stores, initially trialed in Seattle and only open to company employees, used high-definition cameras, sensors, and scanners to track customer activity inside the store and keep an eye on their purchases.

As customers enter the store, they scan an app on their phones and proceed to go about their shopping. Once finished, all they have to do is walk out. Sensors determine what they are buying and charge the customer’s card on file. There are a few store workers on site, but they’re there mostly to restock shelves and check IDs for those buying alcohol. You don’t have to interact with a human if you don’t want to.

This model has definitely made our lives more convenient, but with an inevitable trade-off.

Hint: It’s privacy.

Taking it one step further

In February, the world saw the unveiling of a behemoth of a retail facility: 10,400 square feet of space catering to the gamut of shopping needs.

This is Amazon Go Grocery, and the technological sophistication deployed inside the store is jaw-dropping. Cameras are able to determine when consumers pick up fruit, for example, test for ripeness and, if unsatisfied, place it back.

Nothing at the store is weighed at checkout. If you pick up one tomato, you’re charged for only one. The term checkout itself is misleading because once you’re done bagging your items, all you have to do is walk out.

According to Techcrunch, which had the privilege of visiting the location before it was open to the public, there are “many, many cameras” on site. The hardware devices themselves don’t seem to be particularly complex, but it’s clear that the algorithms powering them are.

Once you scan your app at the entrance, the cameras take over. They’re able to keep track as you browse through the store, using depth sensing and other visual cues to get accurate information.

And even if a few cameras were to break down, the system continues as normal with others filling the void.

Data will follow suit

The tradeoff is inevitable: If we want more convenience, we have to sacrifice some of our privacy. In the post-Covid world, however, we’ll be willing to do that far more easily than ever before.

And once the algorithms, facial scanners, and data-hungry IoT devices are at work, there isn’t much we can do to limit their reach. As contactless grocery stores become more popular and attract a critical mass of traffic, corporations will have a wealth of offline customer behavior data to play around with.

Analysts will be able to tell what brand of yogurt consumers prefer, or how long they stopped to look at a certain promotion before deciding to buy it or not. Some may argue that this is no different from an online marketplace itself, but this is clear data on how humans purchase in the wild. And the thing about data is that the more of it you have, the quicker you can bring the competition to its knees.

Data can be hawked to marketers, pressure companies to give it deeper discounts, or enable predatory pricing that forces rivals out of business.

And if you think companies guard their data zealously, we urge you to reconsider.

An investigation into co-branded credit cards revealed that the terms and conditions of the deal allowed the issuer to share personal data with “non-affiliates,” meaning those outside the company. Countless organizations benefited from purchases made on one card.

Eventually, however, companies won’t need to rely on co-branded credit cards to track purchases made in offline stores. Every time a consumer walks out of a contactless store, the algorithms will record a purchase and charge the card on file. The receipt and transaction history is technically proprietary knowledge, and while it will also be shown to the card issuer, the data will pass through the shop operator’s filters first.

And it could do whatever it wants with it, including targeted advertisements, consumer profiles, or selling to the highest bidder, which it has a history of doing.

The end losers in all this are ordinary consumers, who willingly hand over their data for free while tech executives laugh all the way to the bank.

The basis for much of this was discreetly revealed in a 2014 patent filing, which describes a “system for automatically transitioning items from a materials handling facility without delaying a user as they exit the materials handling facility.”

And the current iteration is only the beginning. The patent goes on to reveal the use of microphones in order to process sounds to “determine the location of users.”

So there’s cameras recording everything we do as we walk inside, microphones that can pick up on our conversations while we’re on the premises, and data sets that track our purchase history to determine what piques our interest.

Orwell would be proud.

A trending technology

The pandemic creates an interesting predicament for Amazon’s new retail experiments. Consumers might be unable or unwilling to visit brick-and-mortar stores at the moment, but months down the line, when self-isolation has eased but with populations still on edge, would they not embrace a totally contactless experience?

My gut feeling is that these stores are just the tip of the iceberg. There’s bound to be more, possibly many, many more.

At the moment, only Amazon has signaled its intentions to bring a contactless checkout experience to the mainstream. But it’s open to sharing this technology with others. What’s more, we’d be foolish to think that other data-hungry leviathans aren’t actively considering the development of their own versions.

In March, Reuters reported that several retailers have begun the process of syncing contactless tech in their own stores. And this was before Covid-19 became a pandemic. If anything, the process has only intensified since then.

Dubbed “Just Walk Out,” the technology will enable retailers across the globe to shrink their workforce and encourage people to sign up for convenience at the cost of privacy.

The long-term effects of this tradeoff will be chilling. Is that a price we’re willing to pay?