Thursday, July 12, 2018

How Smart Retail Technology Fuels In-Store Innovation

Savvy CIOs and CTOs in the the retail sector have embraced new technologies that enable them to evolve their business models -- both in-store and online. In particular, automation applications that improve productivity are likely to receive significant IT investment.

Artificial Intelligence (AI), computer vision and robotics will ultimately enable retailers across the globe to provide improved customer experiences, streamline legacy business processes, and increase diminishing profit margins.

Smart Retail Tech Market Development

Brick and mortar retailers can, therefore, improve their chances of remaining competitive if they employ these technologies correctly, prioritizing long-term investment over short-sighted strategies, according to the latest worldwide market study by ABI Research.

"The high-cost barrier associated with AI, computer vision and robotics will ultimately be overcome by the potential for these technologies to offset the inherent disadvantages facing physical stores today," said Nick Finill, senior analyst at ABI Research.

In 2025, traditional brick and mortar retailers will spend $34 billion on AI technologies -- that's up from just $4 billion in 2018. According to the ABI assessment, computer vision will account for 29 percent of this IT spending.

This is due to the technology’s ability to facilitate real-time inventory status reports, advanced customer analytics, and checkout-free retail models -- all of which rely on AI-enabled cameras.

As a result, ABI Research now forecasts that over 44,000 checkout-free stores will have been deployed by 2023, with the Asia-Pacific market being home to the clear majority of these retail outlets.

Moreover, robots will also be increasingly deployed by forward-thinking retailers that want to improve their customer support and manage inventory more efficiently and precisely. By 2025, it's estimated that 167,000 robots will be in operation in physical retail stores globally, most of which will be used to monitor the contents of store shelves.

These retail-oriented robots, offered by companies such as Simbe Robotics and Bossanova, will see widespread deployment in large format stores in regions with high labor costs and strong robotics initiatives -- such as North America, Europe, and East Asia.

"In the store of the future, robots and computer vision cameras will essentially act as data-generating eyes, feeding an AI brain which can proactively respond to stimuli and predict trends at the micro and macro level," Finill added.

Outlook for AI, Computer Vision and Robotics

Smart technologies -- including AI, computer vision and robotics -- when integrated with a store’s wider network of information systems, represent enormous potential to retailers desperate for actionable insights, operational excellence, and satisfied customers within their physical stores.

The most progressive retailers, which can most effectively combine these advanced capabilities to improve their competitive position, will likely see the greatest long-term return-on-investment (ROI).