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Fairway's Cashierless App Can't Trust New Yorkers Because Of 'Diversity,' Fired Rep Says

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In November, Fairway introduced a mobile app run by a New York-based company named FutureProof Retail, that allows customers to create an account and scan their own grocery items with their phones. The app is part of a slew of new cashierless check-out systems being rolled out by retailers to trim labor costs and speed up transactions for customers who want to avoid long lines.

The Fairway app informs users that it employs a “spot check” system, in which shoppers are randomly selected to have their purchases reviewed against their online receipts.

Last week, one Fairway shopper filled out a customer feedback survey in which he complained how the spot-check slowed his checkout, and received a disturbing response from a FutureProof customer service representative.

The March 11 email attributes the random spot-check policy in part to New York City's diversity, which creates a society where people do not have the same “values and respect for laws.”

Below is the full excerpt:

It occurs randomly so there isn't any discrimination or implicit bias expressed toward shoppers, it is an unfortunate consequence of the amazing diversity here in NYC. With all the different backgrounds, and socioeconomic classes shopping at Fairway we can't operate it on the honor system like kiosks in homogeneous population centers in Norway and Finland, since people can't be expected to all have the same class structure, values and respect for laws. This aspect of building the app has been very educational. Lot's of applied psychology and learning about other cultures.

“I thought it was pretty shocking,” said the shopper, who shared the correspondence with Gothamist but asked that his name be withheld.

He declined to provide the name of the employee who sent the email.

Last Friday, he posted the response on Reddit with the name of the FutureProof employee blacked out. Reactions on the forum were mixed, with several describing the employee’s justification as “odd” and others denouncing it as “straight-up racism.”

The next day, William Hogben, FutureProof’s CEO responded on Reddit with the following post:

My name is William Hogben, I am the CEO. Thank you for bringing this to our attention so we could take action. Thank you especially for preserving the privacy of the customer service respondent. We have discussed the situation, communicated with the employee, and we made the decision to terminate their employment. Again I really appreciate you taking the time to let us know. Please contact me directly if you have any questions. Will Hogben

The Fairway shopper said he found the CEO’s response less than satisfying because it did not include a strong rebuke of racial discrimination.

“In short, I wanted the company to take responsibility,” he told Gothamist. “Instead the employee was made responsible.”

On Reddit, he pressed Hogben on the issue, writing, “Would you like to comment on FutureProof's internal thinking about the challenges the employee depicted of implementing cashier-less checkout in this diverse city, and how what they expressed does or does not differ from the mission and views of the company?”

Hogben responded by writing on Reddit that the employee “did not have the authority to speak to or express the company's positions and views, which are not in line with what was written, and, as such, as soon as we were alerted to their and your email exchange, their employment was terminated.”

In a phone interview with Gothamist on Monday, Hogben reiterated those statements. He said that the customer service employee was fired on Friday, the same day the Reddit post was brought to his attention. “It does not reflect any internal thinking of the company,” he said, adding that the response was “very unusual.”

The company, which was started in 2014 and is based in New York, employs 10 people, he said. According to a press release from Future Proof, Fairway launched the checkout app in all of its stores, "reportedly making it the first grocer with such an option in the New York-area retailer's Tri-State region." Altogether, Fairway operates 15 stores in New York, New Jersey and Connecticut.

In a story last month in the industry publication Chain Store Age, Michael Penner, director of retail applications and technology at Fairway, said the "technology has differentiated us from our competitors." He said an early roll-out of the program showed both a reduction in customer wait times and positive feedback.

But the Red Hook shopper who used the app said that aside from the email, there were other features of the mobile check-out experience that bothered him, including privacy. The app requires shoppers to take a photo of themselves during the account set-up process. When shoppers finalize their purchases on the app, a screen at the check-out aisle displays their profile photos along with the amount of their purchase.

“You wouldn’t expect that from an ATM, you wouldn’t’ expect that from Costco or CVS. Those are systems that are setup in which there are no personally identifying information when you leave,” he said.

He said he also worried that the technology would allow the supermarket, which has over the years been committed to creating local union jobs, to eventually replace its legion of cashiers with software. According to a 2017 report by the World Economic Forum, 30 to 50 percent of the world’s retail jobs could be vulnerable to automated checkout.

“The whole thing left me with an ill feeling,” he said.

Once seen as the iconic family-owned New York grocer, Fairway has struggled from a rapid expansion under Sterling, a private equity firm that bought an 80 percent stake in the the supermarket chain in 2007, and increased competition from the likes of Whole Foods and Trader Joe's. In 2016, the company filed for bankruptcy, only to emerge two months later with Blackstone Group, another private equity firm, as its new owner.

Fairway did not immediately respond to a request for comment.

Big retailers like Amazon, which has been the main driver behind the cashierless checkout system, with launches at its Amazon Go convenience stores in Seattle, Chicago and San Francisco, have said it does not expect the technology to result in employee reductions, but rather reassignment to other jobs that it says will better serve customers.

Amazon's cashierless system is heavily reliant on tracking technology: customers scan an app-generated code on their phones and then video cameras and other devices track and charge customers as they pick up items.

Not all retailers, however, are fully sold on the technology. After experimenting with a cashierless “Scan & Go” system in 125 stores, Walmart recently announced that it was canceling the program due to low participation as well “too many errors in the process.” But in a sign that the company is not giving up entirely on the program, Walmart said it would keep the "Scan & Go" system at its nearly 600 Sam's Club stores.

John Karolefski, a grocery shopping analyst and founder of the blog Grocery Stories, observed that a spot-checking policy is a cheaper alternative to investing in the type of camera system that Amazon employs. But ultimately, he said most shoppers would come away feeling annoyed "because they are not stealing anything."

"That's all fine in theory," he said, of the spot-checking policy. "In the real world, it doesn’t go over that well."

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