Dive Brief:

• British supermarket chain Tesco has made an undisclosed investment in checkout-free technology company Trigo Vision, according to the retailer's latest earnings report.
• A spokesman for Trigo told Grocery Dive it has installed its AI-powered system, which includes 160 cameras, inside a nearly 3,000-square-foot store located at Tesco's headquarters. The checkout-free technology will soon begin testing with Tesco employees.
• Trigo, which recently announced $22 million in venture funding, has also linked up with Israeli supermarket chain Shufersal to retrofit all 272 of its stores over the next several years. The first is planned to go live in next year's Q2. 

Dive Insight:

A major retailer not just piloting but investing in a checkout-free company speaks to the level of interest grocers have in the emerging technology.

Although Tesco operates overseas, it faces similar competitive pressures — e-commerce and discounters, to name two — that U.S. grocers face. Indeed, mainstream retailers that have struggled to enhance their shopping experience in recent years would arguably get the most value from futuristic checkout.

Ahold Delhaize, which does two-thirds of its sales through conventional retailers on the East Coast, recently opened an automated mini-store in the Netherlands under its Albert Heijn banner. In the U.S. Giant Eagle is testing a checkout-free store — reportedly a GetGo convenience store near its Pittsburgh headquarters — in partnership with Grabango.

Retailers that have seen the buzz surrounding Amazon Go are no doubt intrigued by the idea of generating a similar level of excitement in their stores. But can they make money off the hefty investment? There’s no clear answer to that question right now.

Several technology firms have emerged offering Amazon Go-like technology to retailers, including Grabango, Zippin, Sensei and Standard Cognition. What differentiates Trigo, the company's VP of marketing, Ran Peled, told Grocery Dive, is its ability to recognize packaged goods as well as weighted items like produce and deli. Trigo's technology only operates at a few thousand square feet for now, but it aims to scale up and eventually retrofit inside full-size supermarkets.

Computer-vision firms are pitching retailers on not just a better store experience but better detection of shoplifting and even the ability to track inventory. Despite the dazzling appeal of frictionless checkout, though, there's no guarantee it will spur long-term store loyalty. 

For Trigo and Tesco, a critical test period lies ahead. If the technology works as it's supposed to and seems like a good value, the grocer will likely roll it out to other small-format stores it owns. Trigo will also have to convince incoming CEO Ken Murphy, who's taking over for Dave Lewis following five years at the helm, that it's a worthy investment.