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 US$387 billion in 2025, up from just US$2 billion in 2020.
“Smart checkout technologies provide much simpler user experiences by removing traditional checkouts; embracing a ‘just walk out’ approach,” the research firm said in a release.
“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.”
The report revealed that, while the growth in adoption is dramatic, 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.
The new research, Digital Retail Technologies: Adoption, Implementation & Strategy 2020-2025, found 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 US$23 billion by retailers in AI by 2025, up from just over US$5 billion in 2020.
“To compete with e-commerce disruptors who heavily rely on AI, traditional retailers must adopt AI rapidly to boost efficiency,” said Nick Maynard, co-author of the report.
“If they fail to do so, they will face a highly commoditized retail market with an outmoded, uncompetitive business model.”
The research found that use of RFID for tracking is essential to enabling analytics use within the retail supply chain. As retailers need ever greater efficiency, analytics is crucial, but it is only as good as the data it is based on. This need for standardized data for analysis will propel RFID’s deployment driving RFID shipments for retail to over 32 billion in 2025, from 9 billion in 2020.
Additional insights can be found in a free Juniper white paper: How Technology Can Save Traditional Retail