A new study from Juniper Research has found that the value of transactions processed by smart checkout technologies, where the fixed checkout process is replaced by a frictionless model, will reach $387 billion in 2025, up from just $2 billion in 2020.
Smart checkout technologies provide much simpler user experiences by removing traditional checkouts; embracing a ‘just walk out’ approach. The rapid growth will be driven by retailers seeking sustainable business models in the wake of the COVID-19 pandemic. However, the pandemic’s impact is only an acceleration of a long-term decline in the fortunes of traditional retail.
Juniper Research’s whitepaper ‘How Technology Can Save Traditional Retail’ provides more detailed information on the company’s findings. While the growth in adoption is dramatic, Juniper states, innovation will be limited to the convenience segment, where product lines are simpler and implementation costs are lower. These rollouts will also be limited to larger retail chains that can afford the significant investment costs involved.
In addition, the research and analytical service provider reveals in its new report Digital Retail Technologies: Adoption, Implementation & Strategy 2020-2025 that the use of AI, including smart checkout systems and chatbots, will be critical in ensuring that retailers can deliver a compelling omnichannel experience to consumers.
The drive for efficiency will lead to investments of over $23 billion by retailers in AI by 2025, up from just over $5 billion in 2020, Juniper Research predicts.
‘To compete with eCommerce disruptors who heavily rely on AI, traditional retailers must adopt AI rapidly to boost efficiency. If they fail to do so, they will face a highly commoditized retail market with an outmoded, uncompetitive business model’, research co-author Nick Maynard warns.
Last but not least, the researchers point out that a need for standardized data for analysis will propel RFID’s deployment, simply because the use of RFID for tracking is essential to enabling analytics use within the retail supply chain. According to Juniper Research, RFID shipments for retail can be expected to rise to 32 billion in 2025, from 9 billion in 2020. As retailers need ever greater efficiency, analytics will become more crucial than ever.
Source: Juniper Research