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The global market size of retail automation was nearly US$11 Bn in 2021, which is likely to see robust expansion in the years to come. The report would reveal how the growth of retail automation market will unfold as the world of retail embraces automation in recent years.
Market Overview
With retail automation, customers can browse products via a touchscreen interface and spend less time making purchases. The ability to choose the product of their choice and then proceed to pay for it using a debit or credit card is provided by retail automation.
Artificial Intelligence, and machine learning are used in retail operations through retail automation. It includes self-service, independent kiosks that leverage software integration to operate as completely automatic retail stores in place of the typical retail services in a regular retail store. These solitary kiosks can be found in several busy areas, including airports, shopping centers, resorts, and transit hubs. They improve the consumer experience while facilitating transactions more quickly and efficiently. It equips workers with real-time retail analytics and data.
Key Report Findings
Market Drivers
Deepening Penetration of Automation
The technological revolution has been gaining attention and popularity at a fast rate recently, which has presented issues for merchants. These new developments and technology are changing how consumers behave and collaborate before and after purchases. Automation's benefits, such as simplicity and transparency, have pressured businesses to modernise their PoS systems. Additionally, PoS devices are becoming increasingly popular among small retail establishments because of their affordability.
Automation can be even more crucial for retailers without a full-time IT team to keep their equipment operational. PoS failures are a common occurrence. For instance, on Father's Day, Target encountered a POS breakdown at busy times that resulted in delays and, eventually, the closure of its stores. On Black Friday, however, Macy's encountered a problem with credit card payments. The shops have paid a steep price for these problems.
On the other hand, physical retailers have turned to innovative in-store experiences by embracing automation, as eCommerce has been growing steadily while driving customers away from retail stores.
Unprecedented Technological Advancements
The way that stores operate has been transformed by retail automation. Automation usage in the retail sector has increased dramatically due to technological improvements. The advantages of automated retail have raised awareness regarding automation in retail operations that aid in inventory optimisation, buy or sales services, and others. These factors are anticipated to propel market expansion.
For instance, automated guided vehicles are used in warehouses to handle heavy lifting because they can operate continuously and complete the same repetitive jobs accurately and effectively. Since autonomous mobile robotics (AMR), and autonomous guided vehicles (AGV) are becoming more common in the retail sector, automation adoption has increased. This is likely to fuel the expansion of the worldwide retail automation market throughout the forecast period.
Market Opportunity
Escalating Uptake of Business Process Optimisation by Retail Players
Retailers worldwide are reducing workflows to improve their business processes since doing so increases supply chain transparency and visibility. As a result, more techniques, such as digitisation, are being adopted, which will fuel the expansion of the worldwide retail automation market during the forecast period.
Automation has exceeded customer expectations, decreased pressure to outsmart the competition, expanded chances to generate revenue, and enhanced organisational effectiveness. As a result, automation is now widely used in the retail sector due to its advantages in providing end-to-end visibility, streamlining operations, eliminating redundancies, and other benefits.
Market Challenges
High Initial Investment
Automation has a high return on investment, but it takes a long time to start making money. Because of this, merchants with limited migration budgets are delaying the adoption of fully automated solutions, which will likely account for the slowdown of the retail automation market. Additionally, the adoption will continue to be constrained by the high upfront costs of technologies such as automated robotic systems and guided vehicles.
Additionally, the technological complexity resulting from advanced automation techniques mandates high costs, extensive transformation projects, and long payback periods, which are projected to restrict the global retail automation market's growth considerably.
Overview of Key Segments
The POS Segment Will Maintain Dominance
The point-of-sale (POS) category contributed the most to the market and is anticipated to expand more quickly throughout the projection period. Over the past ten years, the retail business has seen substantial change. The need to react to continuous digitalisation tactics like automation is driven by the need to deliver excellent shopping experiences that can help companies enhance customer retention. The retail industry has thus seen rapid growth in integrating technologies with smart devices.
Computers that smoothly and securely integrate backend management systems like inventory, order, fulfilment, and customer experience with front-end management systems like loyalty management, payment processing, shop sales, and coupons are also expanding quickly. These elements support the expansion of the POS segment on a global scale.
The second-largest segment is barcode and RFID. The RFIDs in retail are leveraging a surge in printed electronics breakthroughs with new classes of incredibly thin and flexible RFID tags. Companies may now print their chip-less RFID tags thanks to new RFID advancements in electronic printing ink and conductive ink technologies.
The development of RFID applications that use passive sensors with RFID tags integrated to track vibration, temperature, pressure, moisture, and other elements gives the retail sector a competitive advantage. These are some key elements anticipated to accelerate RFID implementation in the retail industry in the upcoming years.
The Warehouse Segment Remains Dominant
The global retail automation market is divided into in-store and warehouse segments based on implementation. The warehouse segment contributed the most to the market during the anticipated period. One significant reason anticipated to propel the expansion of the warehouse automation segment in the market is the rising burden caused by commoditisation and supply chain transformation.
Additionally, since warehouse automation involves physical and operational automation that aids retailers in hastening the delivery of goods to their clients, a rise in customer expectations towards slower delivery times also play a role in the segment's growth.
Mechanised automation that makes use of load carriers, distribution conveyors, and AGVs have a significant impact on warehouse automation. As a result, the increased adoption of automated systems, such as automated guided vehicles, autonomous mobile robots, and automated storage & retrieval systems, would further fuel the expansion of the global market over the forecast period.
Regional Coverage
North America Leads the Pack
North America accounted for the largest market share. North American merchants are expanding their R&D efforts internationally to remain competitive in the worldwide market. To meet the demands of international trade, North America is also anticipated to experience expansion in the retail sector's developing technology.
Additionally, the requirement for high accuracy levels in retailing activities like inventory management and the rising demand for highly sophisticated retail services are the main reasons anticipated to fuel the expansion of retail automation in the region.
The US Department of Commerce reports that in July 2019, the country's trade imports and exports with free trade partners accounted for 79.0% and 73.8%, respectively. Additionally, a change in trade rules leads to an increase in the movement of goods worldwide, a key factor anticipated to fuel market expansion in the area throughout the forecast period.
European and Asian Markets Follow Suit
Europe is the second-largest region that holds a substantial market opportunity for retail automation vendors. Stable economic growth in the European nations would generate profitable expansion prospects for the region's retail automation infrastructure. Third in size, is the Asia Pacific. Global growth in connection and the IIoT is generating a significant opportunity to understand new productivity levels throughout the retail industry's entire value chain. China has seen a substantial increase in development of sophisticated applications for building smart warehouses.
Global Retail Automation Market: Competitive Landscape
A few players in the retail automation market include-
Key Company Developments
Considering the volatility of business today, traditional approaches to strategizing a game plan can be unfruitful if not detrimental. True ambiguity is no way to determine a forecast. A myriad of predetermined factors must be accounted for such as the degree of risk involved, the magnitude of circumstances, as well as conditions or consequences that are not known or unpredictable. To circumvent binary views that cast uncertainty, the application of market research intelligence to strategically posture, move, and enable actionable outcomes is necessary.
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