Smart Shelf

A smart shelf is an ecosystem that integrates technologies and networking capabilities into a retailer’s shelves. The purpose is to enable a set of capabilities for optimizing supply chain processes, inventory management, dynamic pricing, and marketing measures.

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What do Smart Shelves mean?

As the frontiers between digital and physical shopping experiences blur, retailers recognize the lying potential of intelligent shelves. Smart shelves enable different capabilities focused on optimizing the customer purchasing experience and the efficiency in the retailing operations.

For example, one of the most common uses of smart shelves is allowing shops to access real-time information about their stock and inventory. The system detects how many products are left thanks to weight sensors on the shelves. Critical levels trigger new orders or replenishment. Another significant advantage for retailers is the simplification of the price tagging process and the possibility to adjust prices in real-time according to changes in the market.

The global Smart Shelves market size is expected to grow from an estimated value of USD 3.0 billion in 2022 to USD 8.3 billion by 2027, at a Compound Annual Growth Rate (CAGR) of 22.4% from 2022 to 2027. Some of the factors that are driving the market growth include the use of automation and intelligence for better smart shopping.

Global Smart Shelves Market Report

A promising avenue of development lies in the possibility for retailers to offer customers a more personalized and complete purchasing experience. For example, a customer can more easily locate products from a shopping list and enjoy unique discounts as part of loyalty programs. Smart shelves can interact with customers when connected through smartphones. Moreover, manufacturers can use digital displays to provide the customer with relevant product information.

Intelligent shelves are a very interesting additional touchpoint with customers. Cameras and sensors will help stores and brands to collect valuable information about customer behavior and attitudes. Due to the proximity to the purchase action, the data collected will prove very enlightening for optimizing products and stores. This unique touchpoint also allows exciting marketing opportunities and cross-selling suggestions.

Smart Shelves definition
Smart shelves consist of a range of technologies that empower retailers to give a better purchasing experience for the customer and obtain gains in the optimization of the supply chain, inventory management, and dynamic pricing. For this purpose, digital price tags, cameras, sensors, and RDIF tags are connected to enable the information flow.
Global Smart Shelves Market Report

Relevance of Intelligent Shelves

Early experiments with smart shelves started in 2003 when Tesco used a high-tech self to detect thefts of razors in one of its stores in Cambridge. However, this technology remained dormant for several years. Now, further developments in technology and essential changes in public attitudes have reignited the interest of big-tech companies and entrepreneurs in the potential lying in smart shelves.

Two implementations in 2018 marked the establishment of smart shelves technology in the retail market. The first is Kroger’s rollout of smart shelving solutions in cooperation with Microsoft. The second one was the opening of Amazon Go, a store designed to give customers a frictionless purchasing experience in which they can pick up any items from the shelves and go. Smart shelves detect each product and process the payment digitally.

The market of smart shelves technology is already big, and experts predict significant growth in the upcoming years.

Where is the smart shelves technology heading?

Visual recognition

Sensing emotional states and customers’ reactions to products, marketing actions, and product placement through cameras.

Human language

Understanding and processing of human language.

Multimedia experience

Creation of multimedia experiences for customers where sound and animations accompany the visual cues.

Personalized communication

Further personalization through NFC technology will adjust the message displayed according to approaching customers.

Benefits for retailers, customers and manufacturers

  • unified commerce stock smiley people

    Benefits for retailer

    Supply chain optimization uses real-time information to minimize warehouse inventory costs, enables dynamic pricing, and collects customer data through smart shelves' connectivity with smartphones.

  • Woman shops on her phone

    Benefits for customers

    A seamless shopping experience is achieved by implementing innovative ways to find products and providing easy access to relevant information and virtual assistance with recommendations.

  • Benefits for manufacturer

    Unique at-shelf advertising opportunities allow companies to reach customers at a precious moment in their journey and provide information about products. Furthermore, valuable data can also be collected on customers' emotions and attitudes towards said products.

Technology Driving Smart Shelves

  • Radio frequency identification reader (RFID)

    The RFID technology is an excellent fit for smart shelves because it enables efficient tracking of products. In the context of smart shelves, products are equipped with RFID tags that transmit their location information to a RFID receiver. The signals are sent through radio waves.

  • Electronic shelf labels (ESLs)

    Electronic shelf labels are wireless display systems that replace traditional paper price tags. They serve to display prices and other product information. They are connected to a central server that enables instantaneous updating.

  • LED sensors and weight sensors

    Smart shelves rely on different types of sensors to enable intelligent functions for inventory management. For example, they detect when customers pick up a product and place it in their shopping car. The sensors will help determine the moment critical amounts of product are left and might trigger a response of ordering extra stock from the manufacturer.

  • Cameras and computer vision

    Cameras and computer vision placed in strategic parts detect the demographic characteristics of customers and their emotional reactions to products. They also help retailers to detect which products are taken from the shelves.

  • Cloud Technology

    The smart shelves technology relies on a robust system that enables the communication between different systems. For example, information about real-time stocks of products and their pricing over different platforms need to be handled flawlessly. Innovations in platforms that can accommodate this set of complex relationships are crucial in successfully implementing smart shelves technology.