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Automated Stores
Overview
Automation technology is about to change how we shop
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 shelf inventory management and checkout. Interest in automated stores has increased in recent years as the technology advanced beyond basic point-of-sale (POS) processes.
Industry Updates
Market Sizing
The US Automated Store market could reach USD 1.4 billion–1.9 billion by 2028
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Use cases
Automated Store technologies such as computer vision, machine learning, in-store cameras, shelf weight sensors, barcode scanners, QR scanners, and RFID tags have been adopted across various consumer staples industries, predominantly in convenience stores, grocery stores, and concession stands. We have also seen higher adoption among sports and entertainment venues and airports to reduce or eliminate checkout times.
Adoption rates are notably high for self-checkout kiosks and mobile phone-based solutions, and these products have proven to reduce customer checkout times and staff costs. Adoption rates are also high for stocking and shelving solutions that automate the process of inventory monitoring, tracking, and reordering. These solutions generate insights on reorder levels, planogram compliance, and other shelf insights. Additionally, smart-cart solutions have gained traction, particularly among large retailers, as they effectively provide customers with rewards, assist in-store navigation based on the customer’s product lists, and improve the purchasing basket size.
We have identified key Automated Stores use cases below:
Market Mapping
Within the automated stores industry, the Self-checkout segment has found the most traction as evidenced by the large number of incumbents and disruptors. Full automation solutions, such as Amazon’s Just Walk Out and Zippin, are gaining popularity among retail locations that rely on speed, such as concession stands in sports arenas, entertainment venues, and airports. Most players in these two segments are in an early stage, having products available in the market and going through the process of gaining customers.
Companies operating in the automated stocking and shelving solutions largely utilize computer vision-based technologies. Several companies in this segment also offer self-checkout solutions (e.g., Scandit, SuperSmart, Aisle 24, SeeChange, Everseen). The Smart cart segment, despite its limited number of players, has seen adoption across supermarkets and grocery retailer locations, such as Kroger and Whole Foods.
Automated stores solutions providers can be segmented into four categories:
Full automation Solutions
Self-checkout
Smart Carts
Automated Stocking and Shelving
The Disruptors
Automated stocking and shelving startups contribute to the highest amount of funding
Most startups in the space are early-stage players gaining customers and establishing a market presence. Among the disruptors, Automated stocking and shelving solutions contribute significantly higher funding than the other segments, with players Trax, Scandit, and Trigo standing out as highly funded disruptors. Trax is the largest player in terms of funding, having raised over USD 1 billion. Many companies in this segment also offer self-checkout solutions (e.g., Scandit, SuperSmart, Aisle 24, SeeChange, Everseen).
Despite being a relatively new technology, Full automation solutions is the second highest-funded segment in the space, with Standard Cognition being the highest-funded pure-play company in the segment. Companies in the Self-checkout and Smart cart segments have attracted relatively lower amounts of investments. Mashgin is the highest-funded pure-play company operating in the Self-checkout segment and Aisles is the highest-funded pure-play company offering Smart cart solutions.
Funding History
Competitive Analysis
Incumbents
In-house development along with partnerships remain the most common strategies
Incumbents in this space are well-established leading retailers operating predominantly in the Self-checkout segment. In recent years, leading grocery and retail chains such as Walmart, Kroger, and Target have launched self-checkout systems, including mobile-based self-checkout apps and self-checkout kiosks. Meanwhile, incumbents offering smart-cart solutions such as Instacart, Amazon, and A2Z Smart Technologies have followed an acquisitive strategy to expand their technology offerings and leverage partnerships with third-party retailers to deploy the technologies.
Amazon is the most prominent incumbent in the Full automation solutions segment. The company initially deployed its “Just Walk Out” grab-and-go checkout solutions at Amazon-owned grocery stores but later revised its strategy to remove the technology from its grocery stores and focus on deploying it at third-party retailer locations, with a focus on concession stands at locations such as sports arenas (e.g., National Football League and major league baseball stadiums), entertainment venues, and airports.
Notable Investors
