California Startup Brings Retailers To The Driveway

After Ali Ahmed founded Dispatch, a service that allowed consumers to have goods delivered from retail stores through a text message, he noticed that customers would not buy fresh fruits and vegetables. “They just don’t trust somebody else picking them,” Ahmed told PYMNTS.  “People need to pick their own fruits and vegetables.”

Armed with this knowledge, Ahmed developed a mobile retail store concept that he calls the Robomart. Essentially a mini-grocery store on wheels, his company’s self-driving vehicles will show up at the end of consumers’ driveways after they hail one with a smartphone app. And, unlike Ahmed’s previous startup, consumers are free to select their own produce.

His concept also has a cost-savings advantage over on-demand delivery services. At Dispatch, Ahmed charged consumers high delivery fees because he needed humans to get goods to customers, limiting his service’s potential market to only consumers that were willing to pay a higher price for the convenience. But Robomart makes it so consumers don’t have to choose between cost and convenience, according to Ahmed.

“We give people the ability to shop at home for the freshest produce, pick it themselves right in their driveway and at the lowest price because there is no driver,” he said. “So, they get the highest convenience at the lowest price, even cheaper than going to the store themselves.”

A Vehicle for SKUs

With 70 cubic feet of available shelf space, the Robomarts can stock about 250 to 300 items per vehicle. Since Robomart is not in the retail grocery or consumer goods business — the company licenses the Robomarts to retailers — it doesn’t decide what goes in the vehicles. In all, retailers can carry 50 stock keeping units (SKUs) in the vehicle with the capacity to hold multiple packages of each SKU.

When it comes time to pay, retailers can choose either a self-scan or checkout-free experience for their customers. To accept payments from consumers and payouts to retailers, Ahmed said, Robomart uses Stripe as its third-party payment system.

Retailers with the checkout-free experience allow their customers to simply take items off the vehicle, while self-scan consumers have to scan individual items. To prevent theft, the vehicles employ a system of radio-frequency identification (RFID), computer vision and weight sensors.

If the checkout-free experience sounds familiar, that’s because Amazon launched a similar payment concept at its new Amazon Go grocery store in Seattle that opened last week. “You can see it as a very similar kind of experience,” Ahmed said. But there’s a key advantage of a self-driving vehicle versus an entire brick-and-mortar store. “I think the big difference is, we don’t have to track the shoppers, so we only track what’s coming out of the vehicle.”

Groceries and Beyond

Even though Ahmed designed Robomart with groceries in mind, he said it creates a space for all sorts of retail opportunities. “It opens up the scope to not only supermarket retailers but to a lot of other companies that might be interested in reaching consumers directly,” he said. Through Robomart, kids could shop for toys in their yard and elderly consumers could buy medicine or over-the-counter (OTC) products without going to the store, for example.

Beyond retail segments, the concept has a large geographical reach. “I believe Robomarts can work everywhere,” he said. “I would love to see them in urban settings like San Francisco, L.A., New York, London — all sorts of cities and also in more suburban environments.” Ahmed said Robomart could help consumers purchase healthy fruits and vegetables in so-called “food deserts,” or neighborhoods that lack healthy food options, for example.

While Ahmed is not alone in developing self-driving vehicles — companies like Google’s Waymo are chasing the technology — Ahmed said the startup is focused on a different space. They’re looking at vehicles like self-driving taxis, while he is developing retail applications, he said.

Still, Ahmed may face competition from big automakers. At the International Consumer Electronics Show (CES) in Las Vegas earlier this month, Toyota announced a mobility alliance, which will develop fully autonomous electric vehicles to deliver packages, pizza and people to desired destinations.

An Exciting Few Years

Despite potential competition from others in the self-driving space, Ahmed is full-speed ahead on Robomarts as he prepares to test out his vehicles. “We’re gunning toward a late summer [launch], where we can have the initial prototypes in testing,” Ahmed said, adding he’s targeting 2020 and beyond for “full deployment” of his technology.

Through the test, he hopes to study consumer shopping behavior. For example, he thinks his consumers won’t use bags and just carry their purchases back up the driveway to their homes, but “it would be interesting to see how people actually shop when we deploy our pilot,” he said.

Now, he’s focused on revenue generation and working with the right retailers to build his business.  In the future, he still believes consumers will go to brick-and-mortar supermarkets, and Robomart will coexist with them. Until then, “It’ll be a really exciting next few years, and I’m looking forward to it,” he said.