How AI Robots Disrupt Retail: Thought-Provoking Use Cases and Trends

Retail Robotics Market size was valued at $7.60 billion in 2020 and is projected to exceed $69 billion by 2028, growing at a CAGR of 31.61% between 2021 and 2028.

In retail, robotic use cases typically spread across inventory, delivery, and in-store management. In 2020, inventory management accounted for the largest market share of 33.16%, with a market value of $2,5 million. It's projected to grow at the highest CAGR of 37.06% between 2021 and 2028.

Powered with AI technologies such as computer vision or ML, retail robots promise to free store employees from routine tasks and foster informed decision-making, providing a new opportunity to significantly improve customer experience and increase revenues. This is achieved due to robots' ability to collect more granular data about products on shelves, identify purchasing behavior patterns, etc.

This article explores how AI-based robotic solutions take the retail industry to the next level in terms of process automation, innovation, and personalization and what the future holds for retail robots.

Contents

What's a retail robot?

Retail robots are artificial intelligence (AI) powered systems that collect exponentially accurate data about shopper habits and preferences. This information allows retailers to increase sales by recommending similar or relevant products to customers, improving their checkout experience, better managing stock, and inventory, fostering better interaction between customers and brands, etc. These factors contribute a great deal to retail business growth and digital transformation.

With a rapidly increasing consumer demand, the retail industry is adopting robotic automation in leaps and bounds.

Retail robots help improve customer engagement, provide a personalized experience, thereby increasing customer satisfaction. The ability of retail robots to serve customers in person is the driving force behind retail business evolution. Applying robotics to one or more retail processes increases an operation’s efficiency, driving business growth. Through robotics, retailers can collect, process, analyze data more efficiently, make informed decisions, and build robust business intelligence (BI) to ensure cost-efficiency, automation, sustainability, and business resilience in the future. That being said, robots provide a great new opportunity for retailers to gain a strong competitive advantage, survive the tough competition, and stay ahead of the innovation curve.

The ability to track customers ultimately allows retail robotics to gather information about the demand for different products, enabling them to make more informed decisions. The logistics industry is facing a labor shortage due to the e-commerce revolution, while the demand for faster and higher-quality delivery of goods is growing substantially. Although the use of robots in retail logistics is still in its infancy and has yet to make a significant impact, it already deems a viable solution to the problem of labor force availability in the industry.

For retailers who are just starting to introduce robotic technology into their businesses, the upfront costs of retail robots can be high and therefore seem off-putting. Data security and privacy for retail robots relate to both secure data storage and consent management and protecting data from hackers. Thus, data privacy is one of the factors limiting the market.

From manufacturing to transportation and now retail, the Internet of Things creates an intelligent digital ecosystem. Combined with the advanced capabilities of AI, machine learning, and computer vision, IoT is helping to fulfill the promise of the Fourth Industrial Revolution to change the way we live, work, do business, and buy the goods and services we need.

Now let’s review some of the most common use cases for robots in retail.

How AI and robotics drive new value in retail

Retail robotic solutions help retail companies:

  • Better understand and execute inventory and supply planning.
  • Reduce the number of resources required for physical locations management and track delivery.
  • Implement predictive analytics for individual customer requests.
  • Personalize customer support.
  • Introduce cashier-less cash transactions. 
  • Create new product categories 
  • Better manage warehouses, etc.

Retail robotic use cases

Let’s review some of the typical use cases for robots in retail.

Retail planning and strategy improvement

AI technologies enable retailers to collect, process, and standardize data, automatically enter it into existing software or spreadsheets, and transform it into easy-to-understand visuals such as charts and graphs. In turn, this helps build effective business plans, reduce reporting time, predict sales, form accurate customer profiles, and understand their buying preferences.

Marketing and sales professionals can effectively plan campaigns and target real consumers with these customer and market behavior reports. This helps managers maintain inventory of certain products much more effectively, as they know the demand.

Retail inventory management improvement 

Today, robots are used to roam the shops in order to collect data at the top of the funnel based on what is and is not available on the shelves. Continuous shelf scanning provides a more holistic view of the retail customer experience. For example, shelf stocks indicate what is available in large quantities, what is in short supply, and what is missing – all indicative of consumer preferences and actions.

According to industry estimates, retailers can significantly improve their revenues by avoiding inventory deviations – global cost-savings can result in as much as a whopping $1 trillion. In addition to lost sales, customers are frustrated with out-of-stock items, which can decrease their loyalty and overall satisfaction.

A real-world example of using a scanning robot in retail

Keeping the in-store price labels up-to-date and the shelf stock full is a tedious, time- and effort-consuming job. When performed by humans, the processes are slow and prone to errors.

For customers, there’s nothing more irritating than comparing product prices, eventually choosing ones and adding them to a shopping cart, waiting in line to pay – all to find out at the check-out the price tag doesn’t match a real item price. It can lead to customer dissatisfaction, lost sales, and more.

That’s when AI robots come in handy.

Carrefour, one of the leading European grocery retailers, has recently launched rinf.tech’s custom shelf-monitoring and price comparison robotic technology in its Romanian supermarkets. Called Marcelo, our custom-built AI and computer vision powered robot (aka ERIS: effective retail intelligence scanner) scans retail store shelves and price tags to detect out-of-stock items and identify errors and inconsistencies in product prices. It provides data extraction and on-the-go edge analytics and sends instant error alerts to store operators and managers.

ERIS provides Carrefour with actionable data, allowing store personnel:

  • eliminate the discrepancy between displayed and actual prices,
  • replenish out-of-stock products in a timely manner,
  • minimize customer dissatisfaction.

In the not too distant future, robots will be able to do more than just report inventory levels and conduct price checks to ensure accuracy and consistency.

Consider a hypothetical scenario for a retail robot scanning the aisles of a grocery store and discovering that gluten-free bread is shrinking at half the rate of regular bread. This real-time detection triggers an automatic order to ship more gluten-free bread to a specific store.

By detecting sudden and unexpected changes in inventory, the robot will be able to respond fast without human intervention. It’s similar to high-frequency trading, which uses algorithms to detect and capitalize on minor, instantaneous discrepancies in stock prices that can converge into huge profits over time.

Would you like to learn more about our ERIS robot or hire a dedicated team for custom AI robotic solution development?

Logistics and inventory optimization

Artificial intelligence programs accumulate, process, and analyze significant amounts of information to predict results and even use them to discover new revenue streams. It can be useful in back-office operations such as accounting and business planning but is not limited to these areas.

For example, in conjunction with IoT, AI applications have already begun to improve the transportation of goods by managing data about their origin and delivery terms. This can be tracked throughout the journey, ensuring better food security and enabling logistics businesses to make smarter decisions.

In addition, cloud technology helps retailers fill shelves and track shopper movement in a store by collecting demand information and predicting the popularity of certain products.

Personalized CX

AI-powered systems can collect extremely accurate data on consumer preferences and habits. Based on this data, retailers can increase their sales by recommending suitable products to shoppers.

Many retail store customers find the checkout process a real challenge. After all, who likes to waste their precious time in long lines to pay for groceries?

This is about to change. Panasonic is one of the companies aiming to disrupt this customer experience.

The Japanese company is currently testing a robotic checkout system at a grocery store in Osaka that could completely change this retail aspect.

The concept is easy to understand: the store has robotic baskets with a scanner capable of analyzing every customer’s item. After the products are added, the customer enters the checkout system, which can work offline and has all the items in the basket scanned by the robot.

An invoice is generated; once paid, the items are automatically dropped into the bag and get packaged – a simple and amazing solution at the same time.

Walmart is testing a new use case for retail robots, introducing a novel way to support customers: robotic shopping carts.

These dedicated carts help shoppers quickly find all the items on their list and eliminate the need to push heavy carts around the store. This is useful for all types of customers, especially people with disabilities, for whom this technology can facilitate the shopping process. It can help increase retail store inclusiveness to a great extent.

The future of robotics in retail

As the research shows, contrary to the common belief that employees are afraid robots would take away their jobs, most consider retail robots as allies rather than foes. 

According to a TechCrunch study, while many employees noted that they once feared that AI would cut their work, they’ve realized that AI (and robots) could actually help them do their jobs more efficiently. 

In particular, 64% of surveyed retail employees say they trust robots more than their boss, and half of them would rather seek advice from the robot than their boss because they believed robotic technology could provide:

  • more objective information (26%),
  • work support (34%),
  • better problem-solving (29%), and
  • more efficient budget management (26%).

 

This trend is likely to continue in the future.

According to Forbes, Generation Z considers robots to be new technologies they would like to see in retail, especially for in-store delivery and assistance. The report “Gen Z as Future Customers 2027” agrees and notes that Gen Z customers will be more comfortable with the idea of autonomous technology and robots, given that they are the first generation born in the age of the Internet and technology.

As Tim Brady, Manager of Deployment and Strategic Initiatives at Giant Food Stores, has once said: 

We don’t want to put [robots] in place just because it’s a robot. It has to provide benefits. As customers change, like Millennials and Generation Z, they want to see more technology, more kiosks, more tablets, more self-checkout, that kind of thing, so if we don’t leverage the technology that is out there now we’ll become irrelevant”.

 

Final thoughts

Going forward, retail robotic technologies will be evolving in line with AI, ML/DL, computer vision, and IoT, as well as new compliance regulations, data privacy laws, etc. Therefore, it’s crucial for the future success of retail companies to set a solid foundation for robotic innovation and ensure future readiness now.

Technology partnerships between retail businesses and custom robotic software development companies will be essential for driving innovation to retail stores.

We invite you to leverage our robust R&D Center for IoT and Embedded Development, in-depth AI and computer vision expertise, many years of experience with custom software development, and top software engineering talent to jump fast on the robotic technology bandwagon and gain a strong competitive edge while saving costs and focusing on your core competencies.
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