In today’s dynamic world of retail, the spotlight remains on artificial intelligence (AI) — and for good reason. AI is undoubtedly transformative, reshaping the future of retail. In addition to AI, other technologies are also making significant strides. Radio-frequency identification (RFID), replacing barcodes, revolutionizes supply chain and inventory management. Video analytics leverages computer vision to understand consumer behavior. Advancements in smart vending machines and mini robotic kitchens in an Internet of Things (IoT) networked world bring us automated retail experiences.
As retailers invest in digitization, automation and personalization, other innovative solutions are also shaping the future alongside AI.
Video Analytics
We’re already seeing video analytics transforming the retail scene, surpassing its traditional security role to offer new insights and boost operational efficiency. Beyond basic foot-traffic tracking, this technology empowers retailers to understand customer behavior, optimize store layout and navigation, and enhance the overall shopping experience. By analyzing customer navigation patterns and behaviors, retailers can strategically position products, optimize space, and improve traffic flow. Moreover, video analytics enables personalized promotions and visual displays tailored to consumer preferences, fostering engagement, driving sales and loyalty. With the ability to analyze consumer demographics, retailers can personalize interactions, refine marketing strategies and unlock new avenues for growth. As the retail realm evolves, video analytics is emerging as a cornerstone for driving expansion, delivering unparalleled customer experiences and maintaining a competitive edge.
RFID
RFID technology has long been recognized for its potential in retail, but its recent widespread deployment marks a significant milestone in reshaping retail operations. Unlike traditional barcode systems, RFID tags offer a more efficient and self-aware approach to inventory management, equipping each item with a chip that provides real-time data. This advancement is revolutionizing inventory processes in-store and throughout the supply chain, minimizing manual labor and maximizing accuracy. Retailers no longer need to grapple with cumbersome inventory counts or extensive tagging procedures; instead, RFID streamlines operations, optimizing both customer experiences and employee workflows.
Furthermore, the financial benefits of RFID are undeniable. With the recent reduction in the cost of RFID tags and improvements in read accuracy, achieving cost savings and revenue enhancements is now feasible. Improved inventory accuracy, reductions in labor hours, and heightened sales performance all contribute to a more profitable bottom line. Furthermore, RFID enables retailers to quickly adapt to contactless self-service checkout, while enhanced inventory visibility empowers them to meet evolving consumer preferences and unlock new revenue streams.
By accurately tracking inventory movements, RFID minimizes stockouts and enables quick product location, improving overall store productivity and customer service. Additionally, RFID-enabled checkout processes expedite transactions, reducing wait times and improving customer satisfaction. With RFID, retailers can not only optimize their operations, but also deliver innovative customer experiences, fostering loyalty and driving revenue growth.
Smart Vending Machines and Mini Robotic Kitchens
Emerging technologies, like smart vending machines and mini robotic kitchens, represent another frontier in retail innovation. Powered by AI and IoT, these machines offer not only convenience but also personalized experiences for consumers. By leveraging cameras and data analytics, retailers can deliver targeted advertising, refine product recommendations, and even offer freshly prepared food options, blurring the lines between traditional retail and food service industries.
Smart vending machines and mini robotic kitchens cater to the evolving lifestyle needs of modern consumers while also providing an opportunity for brands to expand into new spaces without the traditional capital and human investment usually needed to stand up a retail space. While robotic technology may not generate as much interaction or foot traffic, its efficiency and scalability make up for it.
Looking Ahead
As retailers continue to navigate the evolving emerging technology landscape, the key lies in embracing innovation while staying grounded in strategic objectives and consumer centricity. By harnessing the power of the additional data generated through these new touchpoints, retailers can better understand consumer behavior, streamline operations, and drive innovation to pave the way for sustainable growth and competitive advantage in an increasingly digital landscape.
The views reflected in this article are the views of the author(s) and do not necessarily reflect the views of Ernst & Young LLP or other members of the global EY organization.
Isaac Krakovsky, Partner, Ernst & Young LLP – EY Americas Retail Leader. He has successfully advised and delivered on technology and business transformations, digital strategy initiatives, M&A due diligence and post-deal integration programs.
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