Retail automation refers to the use of technology to automate retail store operations, from ordering inventory, product display, payment processing, to checkout. Automated stores, also known as smart stores, combine various automation technologies to enhance the customer experience and make in-store operations more efficient.
Retail automation has gone through several waves of early innovation, applied mainly to register operations and checkout. Interest in automated stores has increased in recent years as the technology advanced beyond basic point-of-sale (POS) processes.
Covid-19 has led to increased usage of automated store technologies and a burst of new further innovations, commercial launches, and the fast-tracking of pilot programs.
Eflyn: Made Shopify self-checkout kiosks available to all general retailers in November 2020.
Caper: Launched its cashierless checkout ‘Caper Counter’ in October 2020.
AiFi: The number of AiFi-powered stores increased to 14 by October 2020, with more scheduled to open in California and Texas.
Standard Cognition: Retrofitted a retail store at the University of Houston in October 2020, and is working with Chartwells to integrate its checkout-free technology in other American and Canadian stores.
Grabango: Launched its automated checkout software in a 3,000 sq ft Giant Eagle GetGo store in Pittsburgh in September 2020.
Introduced a new palm payment feature, ‘Amazon One’ in September 2020 across several Amazon Go stores.
Licensed its automated store technology to other retailers.
Airport Hospitality Group OTG announced in March 2020 it would feature Amazon Go technology at Newark Liberty International Airport.
Installed a Mashgin touchless checkout system at a Delek convenience store in Texas in August 2020.
Installed Mashgin kiosks in Kansas City International Airport in July 2020.
Within the automated stores industry, the automated checkout segment has found the most traction as evidenced by the large number of incumbents and disruptors alike. The cashierless checkout trend has already reached convenience stores, grocery chains, and arenas, providing a seamless shopping experience for customers and reducing labour cost. Most players in this space are early stage with products available in the market and going through the process of gaining customers. A smaller number of these startups are at the seed stage and still going through product testing and trials.
Some companies provide both automated stocking and shelving as well as automated checkout solutions. These include industry incumbents like Kroger and Ahold Delhaize as well as startups like AWM Smart Shelf, Focal Systems, Ava Retail, Trigo, and Scandit.
Most startups in the space emerged in the past five years. They focus largely on the elimination of cashiers through technologies including cashierless stores and smart cart tech to provide a more unstaffed retail experience.
Among the disruptors, Trax, Standard Cognition, and Scandit are frontrunners, having commercialized their products with retailers across various countries. These companies have been successful in raising more funds than their peers (above USD 100 million) while increasing the number of partnerships with retailers rapidly.
Scandit’s data-capturing engine can be installed to any device with a camera, including smartphones, drones, robots, and smart glasses. This app is mainly used by retailers for cashierless checkouts, allowing shoppers to scan a product’s barcode and pay via app. However, Scandit is not only used for self-checkout but also for inventory management, proof of delivery, and asset tracking. As per the company, the app is active in “more than 100 million mobile devices, making billions of scans per year” as of March 2021.
Scandit operates across several core verticals besides retail, including transportation and logistics, healthcare, and manufacturing, leveraging its computer vision technology to automate processes and provide insights to improve customer engagement and workforce productivity.
Scandit has a global presence, with over 1700 global customers, including 7-Eleven, Alaska Airlines, Carrefour, DPD, FedEx, Johns Hopkins Hospital, La Poste, Levi Strauss & Co, Mount Sinai Hospital, and Toyota. The company has offices in San Francisco, Boston, London, Warsaw, and Tampere, Finland, in addition to its Zurich headquarters. Since 2020, the company has more than doubled its annual recurring revenue.
In February 2022, Scandit raised USD 150 million in a Series D funding round led by Warburg Pincus, garnering a valuation of over USD 1 billion. The round was oversubscribed, with participation from Scandit’s existing shareholders, including Atomico, Schneider Electric, Sony Innovation Fund by IGV, and Swisscom Ventures. The company plans to use the funding to expand its global team and geographic footprint, with a focus on the APAC region— specifically, Japan, Singapore, and South Korea. The investment will also support the company’s R&D efforts in AI/ML and autonomous data capture towards better decision-making and more effective core business processes.
Automated Stocking and Shelving:
Incumbents in this space are well-established leading retailers operating in both the online and offline segments and adopting a diverse range of retail automation in their stores. A large portion of each retailer’s stores still use more traditional systems, with stages of automation being deployed gradually. Exceptions to these incumbents include players such as Amazon, which has created stores called Amazon Go surrounding the automated experience, using in-house technology. Apart from Amazon, 7-Eleven has also trialed its first cashierless store experience, while largest retailer Walmart is also working on a different kind of automated store.
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