With AI for Shelf Checking, Google Gives Retailers What They Want

Google’s announcement that it would be enhancing Google Cloud for Retailers with shelf checking got people talking at the National Retail Federation’s conference in New York earlier this month, but the push to turn physical stores into digital assets has been underway for years.

New shelf inventory software will assist retailers with overall inventory management and provide impactful data from previously untapped sources. With the ability to track when products are close to running low on stock, retailers and their partners will be able to keep shelves fully stocked with the exact products customers are looking for at all times.

That has the potential to change how in-store retail operates, particularly when it comes to the customer experience. More importantly, though, Google’s new shelf-checking technology has the potential to be a catalyst to other advancements, like dynamic pricing and unlocking valuable customer data, says SES-imagotag North American CEO Philippe Bottine.

“While shelving AI is a much-needed technology that can help retailers be more efficient on inventory management, it only scratches the surface of what in-store technology can offer to retailers and to customers,” Bottine says.

Managing inventory at physical stores has always been a challenge, and retailers have been asking for shelf-checking capabilities for years. Nationwide, empty store shelves cost retailers $82 billion in missed sales in 2021, according to NielsenIQ.

With the new AI solution from Google Cloud, retailers will be able to turn their physical stores into digital assets, so they can become both traditional stores and logistics hubs. The tool is built on Google’s Vertex AI Vision and powered by two machine learning models, “product recognizer” and “tag organizer.” The company says it can identify different product types based on visual imaging and text features, and it can do this without retailers having to spend time training their own AI models.

“Before AI technology like this, inventory management was basic, fallible and never up-to-date, often relying on estimations as opposed to hard data,” Bottine says. “With technology like Google Cloud and our own inventory solutions at SES-imagotag, the inventory management process is automated both in the aisle and in the back rooms. Retailers can make educated decisions beyond just which products to display, like restructuring story layouts to prioritize high-selling products in the front of stores and offering more floor space for fulfillment.”

Industry-Wide Challenges

The retail industry today faces many challenges, from a global supply chain crisis and juggling inventory overhead to customer retention and increasing foot traffic in-store. While retailers are making strides in addressing these challenges, Bottine says customers are also asking more from their shopping experience than ever before. 

“The reality is that expectations are outgrowing the ability for people alone to solve these challenges, and it’s more important than ever for retailers to look to technology to help alleviate pressures and foster growth,” Bottine says.

Many of the conveniences that come with shopping online have become expectations when consumers shop in-store. For example, shoppers today expect store shelves to be stocked with the products they see advertised. When that doesn’t happen, they’ll often leave empty-handed. While assistance from retail associates could be helpful in these scenarios, research suggests up to 95% of customers want to be left alone while shopping.

“Shelf inventory AI technology falls perfectly in line with what customers are looking for from their shopping experience,” Bottine says. “While some customers today still value the physical shopping experience, browsing different products and comparing prices, others have an ‘in-and-out’ mentality.”

Bottine cites Sephora as an example of a retailer that’s embraced the phygital shopping experience. Sephora uses location-based marketing through its mobile app, and sends relevant information like product location maps and in-store deals to the customer’s phone once they’ve entered the store.

Nike has also managed to succeed thanks to a strategy that allows customers at specific locations to peruse the available products online and choose which ones they’d like to try on in-store. Once they arrive, an associate will direct them to a changing room with the shoes they previously chose online ready to try on.

“Overall, the theme around technology like Google’s AI tool and SES-imagotag’s suite of IoT technologies, VUSION, is to create a seamless, yet speedy shopping experience,” Bottine says. “To continue to accomplish this, retailers and retail technology companies need to listen to what customers are looking for from their customer experience, which can vary. The technology needs to be able to keep up with customers’ need for personalization, access to online information and more.”