Standard Cognition: Using AI to Automate Shopping

Digital transformation is a core focus concept in many business fields these days. Yet, it is not generally the technology itself which is the central issue. While most digital technologies provide companies with numerous opportunities for efficiency gains, they are unlikely to be achieved unless they also accommodate the prevailing organizational practices.   

A variety of innovative new ventures have recognized the influential area of intersection between corporate business structures and data science tools like artificial intelligence, blockchain technologies, machine learning, etc. But a much smaller number of companies have focused upon seamlessly introducing digital transformation technologies that truly transform and enhance the consumer’s experience in real-world practice. 

Usage-In-Context

When it comes to offering people a delightful usage-in-context, many existing purported solutions fall seriously short of the mark. For example, in the retail arena, supermarket self-checkout systems are a case in point. Anyone who has tried to purchase twenty identical cans of pet food will identify with the oppressive experience of dealing with these mechanized slave drivers, as they tediously mandate that each individual item be separately scanned and manually bagged one at a time. It is clearly evident that the designers of such banal systems paid little heed to the impact of their work on both the shoppers and the staff who have to live with them.  


Seamless Automation

To address these tiresome processes, San Francisco-based Standard Cognition is deploying a suite of visual pattern recognition technologies in retail settings, which provide customers with frictionless shopping and autonomous checkout features, without disrupting the existing store design and layout.  In August 2020, according to Forbes, Standard partnered with Couche-Tard, the parent company of Circle K and other retail chains, to pilot its innovative checkout system in convenience store locations in Phoenix. 


Integrating In All Contexts

The Standard Cognition infrastructure enables it to be easily installed by smaller, independent retailers and specialty vendors, since it doesn’t require any changes in store layout, shelving, lighting or inventory management processes. By retrofitting existing stores with its technology, Standard strongly differentiates itself from deep-pocketed competitor Amazon Go, which relies on custom-designed retail spaces. 

The system’s unobtrusive technology consists primarily of ceiling-mounted cameras that detect purchasing activity without using facial recognition, which enables shoppers to browse the store anonymously. The use of multiple camera views and sophisticated AI integration algorithms allows the Standard system to monitor the purchasing activity of multiple shoppers simultaneously. 

In addition to its Couche-Tard deal, Standard Cognition has also negotiated pilot agreements with Chartwells Higher Ed, which manages sustainability-oriented on-campus food service and catering operations on over 300 college campuses across North America.  This gives the company valuable exposure to a large student population – a key demographic of tech-savvy early adopter consumers.

Valuation Indicates Promise

From its founding in 2017 until December 2020, Standard Cognition had raised about $88M over six rounds of investor funding. The seventh round, which closed in February 2021, provided an additional $150M, which is primarily intended for market expansion, with the goal of reaching 50,000 in-store systems within five years. This latest round gives the company a post-money valuation of more than one billion US dollars, thus making it the first unicorn in the autonomous checkout or pure-play computer vision industry,This round, which involved existing investors led by SoftBank Vision Fund and several Silicon Valley venture firms, was also supported by some new participants, including SK Networks of Seoul, S. Korea. As we discussed in prior articles, the expansion of the investor pool to other parts of the world, such as the Asia-Pacifc region, can be very valuable for companies seeking to expand the global reach for their products and services.  

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Bibliography:

AlleyWatch. “The Weekly Notable Startup Funding Report: 2/22/21.” AlleyWatch, 22 Feb. 2021, www.alleywatch.com/2021/02/the-weekly-notable-startup-funding-report-2-22-21/. 

Cai, Kenrick. “Cashierless Checkout Is Coming To Convenience Stores, As Circle K Inks Partnership With Standard Cognition.” Forbes, Forbes Magazine, 11 Aug. 2020, www.forbes.com/sites/kenrickcai/2020/08/11/standard-cognition-ai-autonomous-checkout-for-circle-k/?sh=25e3f13539f5. 

“Standard Cognition – Crunchbase Company Profile & Funding.” Crunchbase, 2021, www.crunchbase.com/organization/standard-cognition. 

“Standard Raises $150M in Funding.” FinSMEs, 17 Feb. 2021, www.finsmes.com/2021/02/standard-raises-150m-in-funding.html.

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