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AI-based Labor-saving Retail Initiatives
In recent years, the retail industry in Europe and the United States has been accelerating its digital transformation (DX), focusing on enhancing productivity and addressing labor shortages. Central to these efforts is the adoption of artificial intelligence (AI) to streamline and automate operations.
The global market for AI in the retail industry is projected to reach $9.36 billion (1.458 trillion yen at 155 yen/dollar) in 2024, and is expected to grow at a compound annual growth rate of 31.8% to reach $85.07 billion (13.4508 trillion yen) by 2032.
A survey by NVIDIA of more than 400 retail executives revealed that 42% are already using AI within their organizations, and 72% of those noted that this has led to a decrease in operating costs. Furthermore, 64% indicated that they intend to expand their AI infrastructure investments in the upcoming 18 months.
Walmart, the largest retailer in the U.S., is at the forefront of integrating AI to reduce labor.
In April 2024, the company rolled out 19 autonomous forklifts powered by AI and machine learning (ML) systems across four distribution centers.
When trucks arrive at a distribution center, the autonomous forklifts receive instructions from the warehouse staff to safely and accurately unload pallets and automatically deliver them to the storage area. This combination of warehouse staff and autonomous forklifts has greatly increased productivity and tripled throughput compared to conventional manual unloading.
Additionally, in March 2024 Walmart began selling its AI-driven logistics technology, called Route Optimization, as a software-as-a-service (SaaS) solution.
The software uses AI to optimize driving routes, improve trailer packing efficiency, and minimize travel distances, enhancing the efficiency of the ‘middle mile’ from suppliers to distribution centers and stores.
Walmart has utilized this same technology to eliminate 30 million unnecessary miles driven (about 48 million km) for its own operation.
AI and computer vision-equipped ‘smart shopping carts’ are becoming increasingly popular in the U.S. and Europe for cutting waiting times at checkout and reducing labor in checkout operations.
Amazon.com has introduced its Amazon Dash Cart at a number of its Amazon Fresh supermarkets and subsidiary Whole Foods Market supermarkets. In addition to announcing plans to introduce the system to all Amazon Fresh locations in the U.S. by April 2024, the company also announced plans to begin full-scale sales of the Dash Cart to third-party grocers.
Belgian food retail giant Colruyt Group has developed its own smart shopping cart, the first of its kind in Belgium.
After extensive testing of the system at the Group's innovation lab, a trial of the cart began in March 2024 at a store in the Brussels suburb of Halle. Colruyt Group plans to first try the system out using a number of Group employees, followed by a thorough evaluation and an eventual gradual roll-out to the general public.
Sam's Club, a membership warehouse club (MWC) subsidiary of Walmart, began rolling out AI and computer vision-enabled exit security gates in January 2024. By the end of April 2024, more than 120 stores had adopted these gates, with plans to implement them in all locations by the end of December 2024.
Until now, Sam's Club stores had staff checking sales receipts against the items in the shopping cart to prevent customers from leaving without paying. However, the queuing up and waiting at the exit for customers who have already paid became a significant pain point.
To solve this problem, the company developed dedicated exit technology in-house that uses AI and computer vision. Once payment is completed, the system uses a combination of computer vision and digital technology at the exit to acquire an image of the shopping cart and confirm payment for all items in the cart. AI continually runs in the background to speed-up the process.
This technology allows seamless confirmation that all items in the cart have been paid for without employee intervention, reducing the time to exit the store by an average of 23%.This frees staff to focus on customer service and support and on providing a better customer experience.
In April 2024, EDEKA Jäger, a subsidiary of Germany's largest food retailer, Stuttgart-based EDEKA Group, implemented an AI-powered age verification system in its 24/7 Stuttgart Airport store. Customers can easily purchase age-restricted products, such as alcoholic beverages, at any time using the self-checkout registers equipped with this system.
On average, about 22% of transactions at retail stores require age verification. Since store staff must perform the verification, this can negatively impact checkout times and turnover rate at self-checkout registers, leading to long waiting times.
Edeka Jäger has adopted an AI solution developed by the American security systems manufacturer Diebold Nixdorf for this system. When a customer scans an age-restricted item, such as a bottle of wine, the self-checkout system displays a message asking if the customer would like automatic age verification. If the customer agrees, the system uses a camera and AI algorithms to analyze facial features and verify age in real time. The age verification can be completed in less than 10 seconds without the need for staff intervention. Moreover, the system complies with the EU General Data Protection Regulation (GDPR), as the process does not involve facial recognition, nor does it store images or other customer information.
In the first week of operation, over 80% of age-restricted product purchases had automated age verification. The use of AI not only speeds up checkout at the self-checkout registers, but also significantly reduces the need for staff intervention in age verification, leading to significant labor savings for the business.
Yukiko Matsuoka
After earning an MBA in the U.S. and gaining practical work experience in supporting start-ups and developing management strategies, she switched to journalism in 2008. Since then she has been following and reporting on trends in technological innovation and next-generation businesses surrounding food from a global perspective.