Retail Automation Market Size, Share & Trends Analysis Report By Type (Point-of-Sale (POS), Barcode & RFID, Electronic Shelf Label (ESL), Cameras, Autonomous Guided Vehicle (AGV), Automatic Storage and Retrieval System, Automated Conveyor, Warehouse Robotics, Others), By Implementation (In-store, Warehouse), By End-user (Hypermarkets, Supermarkets, Single Item Stores, Fuel Stations, Retail Pharmacies, FMCG, Health and Personal Care, Apparel and footwear, Hospitality, Consumer Electronics, Travel and Logistics, Oil & Gas, Others), By Product Type (Manned POS Terminal, Unattended Terminals), By Market (Organized Market, Unorganized Market), By Component (Hardware, Barcode Scanner, Vending Machines, E-Pos Systems, Self-Scan Checkout Systems, Software) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2022-2030

Market Overview

The global retail automation market size was valued at USD 14,885 million in 2021 and is estimated to reach an expected value of USD 34,530 million by 2030, registering a CAGR of 9.8% during the forecast period (2022 - 2030).

Retail automation is a collection of automated procedures that combines software and hardware solutions to handle several aspects of the retail industry, including product management, staff management, inventory management, and shop audits. With software integrations, self-service procedures and independent kiosks that function as fully automatic retail establishments are typically included in retail automation. Increased margin pressure is pushing retailers to choose distinctive solutions that will set them apart in fierce competition, and the growth of global e-commerce has had a favourable effect on the retail automation sector.

Market Dynamics

Global Retail Automation Market Drivers

Increase in Need for Business Process Optimization in the Retail Sector

Retailers worldwide are constantly looking for tactics to help them achieve profitable growth. Retailers were under pressure to outperform the competition, exceed customers' expectations, boost revenue prospects, and enhance organizational efficiency before the advent of technology. Because automation can help merchants with their problems, it has become increasingly popular in the retail sector. Also, this is attributed to the automation of multiple processes and workflows that ease retail operations, such as inventory and warehouse management, physical store effectiveness, omnichannel efficiency, and others.

Earlier, digital transformation was considered an elusive and seemingly evolving technology by retailers; however, innovative features of automation curbed these concerns. Features such as supply chain optimization, vendor onboarding, essential item, and unit planning, promotional, seasonal, space & end-cap planning, and others are driving the adoption of automation in the retail industry. This is expected to be a significant factor in boosting the growth of the global retail automation market in the coming years.

Omni-channel retailing activities are creating new operational opportunities that retailers are adopting significantly to offer customers a hassle-free and simple payment experience. Implementing automated operational improvements like service scheduling and delivery functionalities, product information and attribute management, consistent process execution with high employee turnover, and others drives retailers to choose automation solutions to save money and time. This, in turn, is expected to propel the growth of the global retail automation market during the forecast period.

Globalization of E-Commerce along with Advent of IoT

The emergence of e-commerce worldwide has increased delivery competition among firms in this area. Thus, the rise in adoption of e-commerce automation that automatically categorizes customers for marketing, standardizes visual merchandising, streamlines tracking & reporting, management of high-risk orders, and other such features will majorly drive the growth of the global market in the coming years.

Retailers' demands for automation are rising due to e-commerce solutions that streamline business operations and distribution networks, opening up lucrative new revenue prospects. The inventory and order management systems offered by e-commerce automation solutions allow for the digital tracking of stock levels and inventory status and the notification of changes. As a result, inventory management takes less time, and there are no out-of-stock issues in the retail sector. Hence, the globalization of e-commerce activities, in turn, is expected to propel the growth of the global retail automation market during the forecast period.

The emergence of new technologies in retail applications, such as industrial sensors for warehouses, in-store analysis devices, and connectivity systems, has helped combine the online and offline scopes of customer engagement. This is driving the adoption of IoT devices in the retail industry for optimized supply chains, connected consumers, and smart-store functionalities. In addition, retail IoT provides advantages such as predictive equipment maintenance, smart transportation, demand-aware warehouse, connected consumer, and others. Thus, these factors are expected to boost the growth of the retail automation market in the coming years.

Global Retail Automation Market Restraint

High Initial Investment Needed To Deploy Automation in Retail

Though the return on investment is high for automation, the duration required to gain profits is relatively high. As a result, retailers with tight migration budgets are taking longer to embrace full automation solutions, which is predicted to slow the market's expansion. Additionally, the initial costs of solutions like automated robotic systems and guided vehicles are substantial, restraining the market's growth.

In addition, technological complexity brought on by advanced automation methods necessitates massive expenditures, transformation projects, and protracted payback times, likely to significantly slow the worldwide retail automation market's growth.

Nonetheless, automation tools and application help relieve teams with tedious, time-consuming, and complicated interactions with complex IT structures. However, software programs are now cheaper and can perform high-scale operations. Data analysis is expected to alleviate the implementation cost factor, which will drive the growth of the global retail automation market in the coming years.

Global Retail Automation Market Opportunities

Technological Advancements with Real-Time Data and Analytics

Retail automation is gaining high traction and expanding at a rapid rate by implementing analytics in automation solutions. In addition, some incumbent retailers are also inclined toward investing in automation and AI technologies at a large scale to enhance both the customer and employee experience. These are the major opportunistic factors of the market, which in turn are expected to fuel the market growth.

Moreover, developing dynamic systems with web scraping and data mining is expected to power real-time analytics to automate pricing and promotions. Thus, automating time-intensive processes can enable suppliers to increase the time spent on strategic activities and help them create value for the enterprise.

The high potential of emerging technologies such as machine learning, analytics, artificial intelligence, and advanced robotics to automate tasks performed by workers and their ability to provide a competitive advantage among the players operating in the global market is expected to boost the growth of the worldwide market.

Regional Analysis

Based on region, the global retail automation market is analyzed across North America, Asia-Pacific, Europe, and LAMEA.

North America accounted for the largest market share and is estimated to grow at a CAGR of 8.7%. North American retailers are globalizing their R&D activities to stay competitive in the globalized market. In addition, emerging technologies in the retail industry are expected to witness growth in North America to ease global trade demands. Moreover, the growing demand for highly sophisticated retail services, and the need to achieve high accuracy levels in retailing operations such as inventory management, are the major factors expected to propel the growth of retail automation in the region. As per the U.S. Department of Commerce, in July 2019, the U.S registered approximately 73.8% of trade exports and 79.0% of trade imports with free-trade partners. Moreover, a rise in trade policies, in turn, increases the global flow of goods, which is a significant factor expected to drive market growth in the region during the forecast period.

Europe is the second largest region. It is predicted to reach an expected value of USD 9,125 million by 2030, registering a CAGR of 9.2% during the forecast period. Stable economic growth in European countries is expected to create lucrative growth opportunities for structuring retail automation in this region. Industries are amid digital transformation, primarily driven by technological advancements such as additive retailing, artificial intelligence, big data, advanced analytics, the Industrial Internet of Things (IIoT), and robotics. Europe is considered an underexploited digitization opportunity as the need for various services among the companies is redefining the government initiatives for retail automation. The European market is expected to provide significant growth opportunities as the potential to increase cross-border digital flows is relevant to Europe. In addition, the rise in the need for automated retailing and warehouses to fulfill growing end-user demand is a significant factor for European industries to adopt emerging technology. This has led to a substantial rise in digital transformation activities in this region. Moreover, rapidly advancing analytics adoption, especially by operational retailing to take advantage of visualization platforms and machine learning models, is witnessing high demand in this region. This is attributed to the capability of analytics to discover new ways to help them optimize retail or supply chain processes, from sourcing raw materials to the sales of finished products, further boosting the adoption of automation among European retailers.

Asia-Pacific is the third largest region. The rise in the number of connectivity and the Industrial Internet of Things across the globe is creating the considerable potential to comprehend new levels of productivity across the entire value chain in the retail industry. The development of smart warehouses in China has demonstrated significant growth in terms of advanced applications. China is among the largest consumers of industrial robots, supported by ever-increasing demand. Furthermore, a rise in global grocery sales through e-commerce channels and the need to create unique and compelling in-store experiences are further expected to drive the market's growth in Asia-Pacific. Rapid technological advancements and breakthrough innovations have disrupted retail business models in fast and all-encompassing ways, further expected to boost the adoption of automation in this region.

Segmental Analysis

The global retail automation market is segmented by type, end-user, Implementation, and region.

On the Basis of Type

By type, the global market is classified as Point-of-Sale (POS), barcode & RFID, electronic shelf label (ESL), camera, autonomous guided vehicle (AGV), and others. The point-of-sale (POS) segment was the highest contributor to the market and is estimated to grow at a CAGR of 8.9% during the forecast period. The retail industry has been significantly evolving over the past decade. The need to provide exquisite shopping experiences that can help retailers increase customer retention is fuelling the need to adapt to ongoing digitalization strategies such as automation. Thus, integrating technologies with smart devices has witnessed high growth in the retail industry. In addition, computers that operate loyalty management, payment processing, store sales, and coupons seamlessly and securely with backend management systems, such as inventory, order, fulfillment, and customer experience, are experiencing rapid growth. These factors contribute to the market growth of the POS segment in the global market during the forecast period. 

Barcode & RFID segment is the second largest. The rise in advancements in printed electronics with new classes of extremely thin and flexible RFID tags is an opportunistic factor of the RFIDs in the retail industry. In addition, new RFID enhancements with new electronic printing and conductive ink technologies are facilitating companies to print their chip-less RFID tags. The advent of RFID applications that integrate RFID tags in passive sensors to monitor vibration, temperature, pressure, moisture, and other factors provides an intelligence edge to the retail industry. These are some of the significant factors expected to drive the adoption of RFID in the retail sector in the coming years.

On the Basis of Implementation

Based on Implementation, the global market is bifurcated into in-store and warehouse. The warehouse segment was the highest contributor to the market and is estimated to grow at a CAGR of 9.2% during the forecast period. Rising market encumbrance from commoditization and supply chain transformation is a crucial factor expected to drive the growth of the warehouse automation segment in the market. In addition, a rise in customer expectations toward reducing delivery speeds is also a factor in causing the segment growth as warehouse automation includes physical and process automation that helps retailers fast-track the delivery of products to their customers. Warehouse automation is widely affected by mechanized automation that uses load carriers, distribution conveyors, and AGVs. Thus, the rise in the adoption of automated systems, such as automated guided vehicles, autonomous mobile robots, and automated storage & retrieval systems, is expected to further drive the global market growth during the forecast period.

On the Basis of End-User

By end-user, the global market is segmented into hypermarkets, supermarkets, single item stores, fuel stations, and retail pharmacies. The supermarket segment was the highest contributor to the market and is estimated to grow at a CAGR of 8.6% during the forecast period. The advent of IoT has driven the growth of automation in the retail industry. Supermarkets are witnessing high adoption of automation technologies and advanced consumer electronics. This is a significant factor anticipated to propel the market growth during the forecast period. Moreover, the rise in the adoption of enhanced digital shelving systems among supermarkets is due to their ability to display promotions, dietary information, and other relevant data. In addition, the increase in developments and launches of cloud-based signage solutions for retail shelves is further fuelling the growth of this segment at a significant rate. 

Impact of covid-19

When the world witnessed the noble Coronavirus breakout, it disrupted all nations' economies. The government imposed lockdowns to slow the disease's rapid spread. Productions were stopped, all workplaces were closed, public interactions were limited, and temporary manufacturing and trading operations suspensions were implemented globally. Implementing the lockdown and public exchange caused interruption causing a cutting down of the market's operations. The social distancing norms of the government also disrupted the supply chain. Because of lockdowns imposed by the government, businesses and employees could not use the equipment. This forced the farmers to lean towards the help provided by autonomous tractors pushing the autonomous tractor market growth further.

The South Korean nation faced many problems due to the social distancing and public interaction restrictions imposed by the government, which resulted in a workforce shortage. Travel restrictions imposed also restricted the movement of emigrant laborers into the nation. So the country had to ultimately shift towards using autonomous machines to continue their production and operations, to generate income during tough times. But still, during the era of covid, the market had to face a few bumps, such as the level of participation by the companies in the market declined, suppliers and distributors also slowed down their operations, and this negatively affected the farm machinery industry supply chain, resulting in a delay of deliveries of agricultural machinery.

Recent Developments

• August 2022 - NCR Corporation (NYSE: NCR), a leading enterprise technology provider, today announced the expansion of its long-standing partnership with Wendy's to provide data services via our NCR Commerce Platform. 
• July 2022 - NCR Corporation (NYSE: NCR), a leading enterprise technology provider, announced that Stater Bros. Markets is connected to the NCR Commerce Platform (NCP) to help reduce infrastructure complexity and improve consumer experiences across all sales channels. Stater Bros. is Southern California's largest privately owned supermarket chain, supported by 18,000 employees through its 171 stores.