Trigo's retail tech revolution rivals Amazon

Michael Gabai credit: Eyal Izhar
Michael Gabai credit: Eyal Izhar

Trigo’s technology enables “frictionless” shopping - making purchases without scanning or checkout. Founder and CEO Michael Gabay talks to "Globes" about the genesis of the Tesco partnership.

At the heart of autonomous checkout technology developer Trigo’s offices is a room that looks like a small supermarket. It has almost everything, from dairy products to cornflakes, diapers, fruit and coffee. But no matter how much one tries to distract the ceiling-mounted CCTV cameras, or confound Trigo’s computerized systems, it is impossible to take a product out of the store without paying or omitting it from the bill.

I admit that I tried. During my shopping trip, I took a packet of cookies and then put it on another shelf. I shoved a pack of chewing gum into my jeans pocket, put some cheese in my shopping bag, then had second thoughts and placed it back in the fridge. 30 seconds after I left the supermarket, I received an accurate receipt on my phone including the promotional discounts. Even the chewing gum in my pocket was included in the tally.

Trigo CEO and co-founder Michael Gabay seemed unconcerned with my attempts to sabotage the system. He was even quite amused. "The technology creates a 3D visualization of the space using basic cameras installed in the ceiling," he explains. "Our initial product offers shoppers the ability to enter a store, take what they want and leave.

"This basically gives us a foot in the door to working with all major retailers, but the operating system we developed will enable many more things, such as accurate inventory control on shelves, connection to e-commerce systems, inventory management systems, and order management systems. We give the retailer complete control over what happens in the space, along with a cross-sectional analysis of consumer behavior."

What behavior, for example?

"The system can analyze competition between different manufacturers, products consumers look at more, products that people remove from the shelf, then bring back and take the competition. These are things that no other system today knows how to analyze. They don't understand the customer journey, the unidentifiable consumer behavior in the shopping space itself. For example, private label versus major brands. Retailers are interested in understanding what makes the consumer buy their store brand and not the competitor. We can provide that information."

Shop without feeling like you’re working for the store

The idea for Trigo came from Gabay’s personal experience, as the person charged by his wife with the household supermarket shopping trip. "I would go there on Friday mornings, and the experience really frustrated me. I saw a very big gap between the technologies I knew existed and what was being used in the retail world in those days.

"The global food retail market has a turnover of $7 trillion a year, and I thought there was an opportunity here. I told my brother Daniel, our CTO, an artificial intelligence researcher by training who served in Talpiot [the elite IDF technology unit], and we started working. We built a smart shopping cart in my living room, but after we presented to several retailers, we realized it wasn’t such a good idea."

Actually, why not? There are quite a few smart cart companies working with chains like Shufersal and Yochananof.

"In the urban supermarket sector, which is our main target at the moment, the cart solution is very expensive and doesn’t solve the problem of theft. Bottom line, they increase depreciation for the supermarket significantly, so these solutions are problematic. It can also be a frustrating experience, scanning all the products, and feeling like you’re actually working for the supermarket.

"Because we knew, from the outset, that we wanted to grow into a huge company, we realized the cart project probably wouldn't get us there. For entrepreneurs at the beginning of their journey, this isn’t an easy point to reach: you worked on something you thought had great potential, you believed in it, and then you have to stop and think it all over.

"It was a crisis and we didn't know how to continue. At this point, we got an idea from Richie Hunter, the former Shufersal CEO, to use the CCTV cameras to manage store inventory. From there we realized we were also able to charge payments, and five years ago, we came up with the current idea."

This wasn’t your only moment of crisis.

"When Amazon Go came out, that’s when this really became a market. That was a moment in time I won't forget. I saw the Amazon video for the first time, and my jaw dropped. For a few seconds, I couldn't breathe. Hey, Amazon the great is doing what I thought was my revolutionary idea that no one had thought of before.

"I found out that Amazon had already been working on this for six or seven years, and invested billions of dollars. I said to myself, ' Okay, we’re two brothers, we haven't earned a dollar yet, but there must be many others wanting to do the same thing, not just me'. From that moment, we decided we would be the top company in the sector, and our biggest competitor would be Amazon."

No invasions of privacy

Trigo was established in 2017, and employs about 200 people. The company works with some of the largest retailers in the world, including Tesco, Aldi, Netto, and REWE. "Tesco met with us back when it was just my brother and me, before we started hiring," Gabay says. "They immediately understood the potential. After things progressed, I asked them why they’d decided to work with a couple of guys who had nothing. They said we were the only ones who’d showed them something that actually worked."

Did their executives also come to the lab and try to put stuff in their pockets?

"That's exactly what happened. They entered the room, played with the products, saw the screen that showed the system working live, and it was clear they were enthusiastic. They also invested in us, followed by other retailers. Our contracts are in the millions of dollars, and the potential for retail deployment is in the tens of millions of dollars a year."

In Israel, the company works with Shufersal, and is currently launching its first installation with a US chain - a Shoprite store in New Jersey. "It’s the strongest retailer in the US eastern region," says Gabay. "The American market is becoming more and more dominant for us."

The company's development center is in Tel Aviv, and it has offices in the UK, Germany, the Netherlands and the US. So far, it has raised $205 million. According to Gabay, "In the world of venture capital investment, people are less used to investing in development-intensive projects, and Trigo is a company that needs huge investments. Our initial seed funding, for example, was $7 million.

"The very fact that Amazon entered this sector in such a massive way helped us raise money. It made investors aware this is a sector with great potential. SAP joined our last funding round, for example. If people once thought we were crazy, today it’s clear to everyone, and every success Amazon has is good for us, too."

Aren't you afraid the majors will prefer working with Amazon, and not you?

"There’s no chance of that happening. I don't see large retailers, apart from a few exceptions, continuing to work with Amazon because that’s working with their direct competitor. Almost all of them are unwilling to work with Amazon cloud services, so they turn to Microsoft or Google.

"When Trigo is in the store, it manages checkout as well as inventory management - and the heart of the store."

You hold a lot of customer information - credit cards, photos, videos. Isn't that an invasion of privacy?

"There is no private information stored within the system. There is a complete separation between payment details and video recordings. Customers’ faces are blurred in real-time. In some stores, you’re required to use the retailer’s app while shopping. By the way, we’re the only company that’s received permission to operate autonomous stores in Germany, which has the strictest privacy restrictions in the world. There’s the proof."

Published by Globes, Israel business news - - on January 19, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

Michael Gabai credit: Eyal Izhar
Michael Gabai credit: Eyal Izhar
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