Q&A: Gidon Moshkovitz, Co-Founder and CEO, Tracxpoint
RTIH: Tell us about Tracxpoint
GM: Tracxpoint is a leading global provider of next-generation self-checkout grocery solutions. Established in 2016, our team started with a single goal: develop a modern shopping solution with a check-in/check-out system that positively encourages shoppers to return their carts by providing them with loyalty points, discounts and other personalised incentives. In addition, by analysing untapped customer data, the system reduces losses and expenses and maximises the revenue potential of the cart.
Quickly realising the growing need for frictionless checkout solutions, we developed the idea of a brand-new shopping cart, the Artificial Intelligence Cart (AIC), to offer a convenient personalised shopping experience through artificial intelligence and sensor fusion technology.
Using cameras, an AI-Engine, onboard GPUs and scales, the carts automatically recognise product additions or deductions as consumers shop, and checkout transactions are executed automatically through the cart’s onboard payment system.
Our platform also provides real-time analytics on shopper and store behaviour, providing the opportunity for more conversions and increased revenue, efficiency and reduced operating costs by offering customers a more personalised and value-added shopping experience.
RTIH: What was the inspiration behind setting the company up?
GM: We were inspired to jump start innovation within grocery retail, as the industry is notorious for being slow to adopt new technology. The company evolved as we realised the need for a personalised and frictionless shopping experience from the customer side, and more in-store insights for retailers.
We also saw the opportunity to improve the aesthetic and functional value of normal metal shopping carts, which haven’t seen a major upgrade since their invention more than 90 years ago. Grocery retail is just now realising the need to incorporate modern technology to meet the demands of today’s digital world, especially in the store, and we wanted to be at the forefront of this innovation.
“Emerging scan-and-go solutions are still not completely frictionless, as consumers still have to physically scan their products. They are also too expensive for retailers, requiring major upfront spend and ongoing infrastructure maintenance (e.g. Amazon Go costs $1 million per store in hardware alone)”
What has been the industry reaction thus far?
GM: We tested our concept from the beginning in different exhibitions, including the MWC in Barcelona and Vivatech in Paris in 2017, and in 2018 at the GTC in Tel-Aviv. The reactions from leading retailers were very motivating and constructive from the beginning. Retailers have increasingly been investing in technology like artificial intelligence to compete against retail giants like Amazon, so the proven results and unique approach our platform offers have been met with excitement.
In 2016, we saw our first pilot with the largest Israeli grocery store, and by 2018 Tracxpoint had grown to 36 engineers with $15 million in sales. In December 2018, we announced the deployment of our AIC platform at Conad del Tirreno, the largest of seven cooperatives managed by Italy’s largest supermarket chain, which will begin in 2019.
RTIH: What has been your biggest challenge/setback?
GM: No company worldwide could identify supermarket products visually the way humans naturally can. Tracxpoint had to invent a new system and adapt new technologies from other leading industries in order to visually detect any item through cameras built into the shopping cart.
To resolve this setback, our cart is equipped with sensors and software to be able to identify products added or deducted, even when thrown into the cart, and even distinguish “look-alike” products from each other. For example, two candy bars in similar shape and packaging can be told apart from the in-cart camera and scale.
Having solved that technological challenge, the biggest hurdle for us now is simply awareness. Once we introduce Tracxpoint to grocers, they’re always incredibly excited about the AIC platform’s potential and we’re excited to make significant headway in that area in 2019.
RTIH: What are the biggest challenges facing the omnichannel retail sector right now?
GM: While more than 90% of sales still happen in bricks and mortar stores, a host of lingering challenges for retailers and shoppers remain. Customer expectations have changed dramatically in recent years, and today’s retail shopper has become accustomed to the instant, flexible digital experiences they have online.
Now, the “new normal” in bricks and mortar retail is to offer more streamlined, curated and brand-consistent shopping visits that are frictionless from start to finish. At the end of the day, retailers are looking for an ecosystem that brings the efficiency and personalisation of the online shopping experience to the physical store.
“We were inspired to jump start innovation within grocery retail, as the industry is notorious for being slow to adopt new technology. The company evolved as we realised the need for a personalised and frictionless shopping experience from the customer side, and more in-store insights for retailers”
RTIH: What's the best question about your company or the market asked of you recently by a.) an investor and b.) a customer?
GM: It’s a triple connection. The potential shoppers say it’s a dream come true and ask where they can find our carts. Supermarkets ask about the integration of such a new ecosystem in their established environment, and investors asks about time to market and securing the knowledge in patents. All sides agree that “if it works” it’s going to be a game changer - and it works.
When working with high-end technology, there’s always a concern regarding the future of human capital. It’s important to note that technological solutions based on artificial intelligence are not meant to eliminate a workforce. They are designed to simply provide more insights at a faster speed than manual processes in order to augment their output or accuracy and allow the organisation to reallocate labour to more value-driving activities. For example, employees formerly tasked with checkout or checking receipts are free to deliver other more valuable tasks like helping customers in the aisle or stocking shelves.
Our customers and prospects are committed to guaranteeing a shopping experience unique from their competitors and are concerned that emerging scan-and-go solutions are still not completely frictionless, as consumers still have to physically scan their products.
They are also too expensive for retailers, requiring major upfront spend and ongoing infrastructure maintenance (e.g. Amazon Go costs $1 million per store in hardware alone). But by offering a checkout-free retail experience based on the shopping cart, our solutions drive value across the business – from payments to marketing to merchandising to loyalty – with a low cost of entry.
RTIH: What can we expect to see from Tracxpoint over the next 12 months?
GM: You can expect more announcements regarding the manufacturing and production of our cart, and for considerable expansion into the American, European and Australian markets. Who knows, you might even see our carts in your favourite grocery store.