Computer vision, a branch of AI, enables machines to interpret and understand visual information just like humans do but faster and with higher capacity. Computer vision models can recognize objects, detect and track people, and analyze images and videos, this greatly expands the area of possible automation. Artificial intelligence and machine learning development is a rapidly growing field that has the potential to revolutionize various industries.
As retail becomes increasingly data-driven, the demand for computer vision technology is growing. Gartner identifies computer vision as the only AI-based technology that is months away from its peak productivity and is ready for wide-range adoption. Surprisingly, only 4% of retailers  are currently using computer vision in retail, despite the fact that most of them have expressed a strong interest in integrating it into their business operations.
Computer vision provides many advantages and is currently not well-represented in the market. Given the maturity of the technology and the significant benefits it brings, it is an excellent opportunity to gain competitive advantages.
Let’s explore the applications, benefits, and prospects of computer vision in retail.
In-store computer vision
Until 15 years ago, people were irreplaceable for anything related to visual comprehension. With computer vision, more processes can become fully automated and thus perfected. Delegating tasks from employees to specialized algorithms almost always improves productivity by optimizing processes, reducing errors, cutting costs, and enabling humans to concentrate on higher-value tasks. Here is a list of use cases of computer vision in retail that are looking to transform the industry:
One of the most remarkable and innovative uses of computer vision in the retail industry is cashierless checkout. When customers are faced with a frustratingly long queue due to the slow nature of the checkout process, it can considerably affect their shopping experience and lead them to abandon their purchase. Extended waiting times harm the store's reputation and cause customers to seek out alternative shopping locations.
Chashierless checkout technologies enable customers to shop and pay for their items without the need for traditional checkout processes or cashiers. It uses computer vision algorithms to track and identify products selected by a customer as they shop. It allows customers to simply pick up the items they want and then automatically charges their account as they leave the store, eliminating the need for physical cashiers, checkout lines, or self-checkout machines.
Retail giants like Amazon and Aldi have already embraced cashierless checkout technology. Amazon Go and Amazon Fresh convenience stores leverage computer vision in retail to offer a seamless shopping experience, while Aldi has piloted its Shop&Go checkout-free concept in selected stores.
Loss prevention and security
Shoplifting has been a persistent issue for all retailers, which has been particularly distressing in the last five years. According to the BRC Crime Survey, £953M ($1.2B) was lost to shoplifting in the UK in 2022. Many businesses have recognized the need for an effective way to prevent thieves from leaving the store. Computer vision is one powerful technology that can greatly enhance store security.
Computer vision-based security systems use the same technology as cashierless checkout systems to link a customer to their shopping cart. Unlike a human security guard who can get distracted, a vision system does not face such problems and stays alert 24/7. These systems can identify suspicious behaviors and detect potential theft or fraud incidents. When combined with cashierless checkout, it becomes impossible to take advantage of a distracted guard and shoplift.
Another way this technology aids loss prevention is the detection of sweethearting, a technique where cashiers intentionally fail to scan products or manipulate prices. Sweathearting can also be directed at oneself as self-checkout stations are mostly based on trust which leads to millions in losses for the business. Computer vision systems recognize every item in the checkout area, correlate it with the transaction, identify instances of sweethearting, and prevent employee theft.
Computer vision systems can also detect unusual crowd movements, unauthorized access, and other security breaches. These proactive security measures enhance store safety and protect both customers and employees. This is particularly important for retailers whose greatest security concerns are not limited to shoplifting.
Computer vision technology, through the analysis of visual data, offers valuable insights into customer behavior and helps retailers improve customers’ experience. By integrating AI algorithms with the production environment, retailers can track customer movements and gain real-time insights into customer interactions with products and displays. The type of clear and easily available information that was previously collected only online can also be available for physical outlets.
Heat map technology, which utilizes real-time movement detection and assigns colors based on traffic volume, plays a crucial role in visualizing customer behavior and making data-driven decisions about store layouts. Previously, retailers could only make educated guesses about these analytics. With data at hand, retailers can make data-driven decisions to optimize store layouts, improve product placement, and enhance the overall shopping experience for their customers.
Another thing that computer vision in retail can provide insight into is the demand for staff and the optimal shift assignments. Without real data on the peak hours and customer’s need for assistance, this would have to be decided in the dark.
Understanding customer behavior and analyzing shopping patterns are also fundamental for retailers looking to improve their operations and marketing strategies. They offer valuable information for measuring the effectiveness of marketing campaigns, assessing store layout performance, and identifying areas for improvement. Retailers can also use this data to understand peak shopping times, optimize staffing levels, and allocate resources more effectively, ultimately leading to an enhanced customer experience and increased overall sales.
In retail, especially when dealing with fashion, electronics, or any products with visual characteristics, maintaining quality is crucial. Computer vision can be employed for visual inspection of products at manufacturing, distribution, and in-store.
Computer vision algorithms detect defects or imperfections in products. They compare the product to a standard and check if it meets design criteria, including size, color, and quality standards. Ensuring that products meet quality standards consistently leads to higher customer satisfaction, lower return rates, and increased trust in the brand.
Computer vision in inventory management
Maintaining optimal inventory levels is crucial for retailers to meet customer demand and maximize sales. Computer vision technology integrated with inventory management systems allows retailers to analyze visual data from cameras mounted on shelves, detecting low inventory levels and notifying store staff when action is needed.
This approach enables retailers to provide a seamless shopping experience and avoid missed sales opportunities. By automating the inventory management process, retailers can streamline replenishment procedures and ensure that popular products are always available to customers.
Let’s look at how N-iX has implemented a computer vision solution coupled with a modernization of a warehouse management system to see how this technology can benefit businesses in practice.
Read more: Finding the right computer vision engineer
Case study: computer vision solution in modern warehouse management system
Our client, with 400+ warehouses in 60 countries, faced the challenge of optimizing logistics on a large scale. They initially implemented an internal logistics platform but encountered significant flaws that hindered further scalability. Recognizing the need for a transformative solution, N-iX introduced a cutting-edge computer vision system for dock management at the core of this project. This innovative approach utilized industrial optic sensors and Nvidia Jetson devices to enable contactless tracking of goods.
We engaged a highly skilled expert to lead the computer vision workstream. After evaluating the existing algorithms, we decided to completely rebuild them. Our team redesigned the solution and implemented CI and CD for Machine Learning, which was a crucial step considering our client's global operations. This approach allowed us to continuously train, test, deploy, monitor, and operate the Machine Learning models, ensuring constant improvement and adaptability.
The planned computer vision solution for warehouse cameras will greatly improve our client's logistics operations. This system will automatically identify packages, scan barcodes, and update delivery statuses. With advanced algorithms and machine learning automation, the cameras will be excellent at reading barcodes and text in various conditions. Additionally, we are creating a mobile application to enable warehouse staff to scan barcodes and allocate boxes.
Benefits of N-iX's computer vision solution and logistics platform modernization:
- Automation and reduced paperwork: Manual tasks are automated, reducing the burden of paperwork for warehouse staff.
- Streamlined inventory management: Inventory management is streamlined across 400+ warehouses globally, leading to improved accuracy and efficiency.
- Real-time package tracking: The platform enables almost real-time tracking of packages, facilitating effective delivery status management and load prediction.
- Package damage detection: The system can identify damaged packages, ensuring that only intact goods are delivered, thus eliminating defective packages.
- Effective planning: The platform enhances planning processes, reducing operational overhead and minimizing warehouse downtime.
N-iX's computer vision solution is designed to revolutionize our client's warehouse management. It aims to enhance efficiency, reduce costs, and ensure the seamless flow of goods across its global network. Our client is well-positioned to unlock lasting business value and operational excellence with this transformative technology, paving the way for an exciting future.
Computer vision in retail is not merely a technological trend; it has become a transformative force, reshaping the landscape of the industry. From enhancing customer experiences and streamlining operations to optimizing inventory management and bolstering security, the applications of computer vision are far-reaching and impactful. Harnessing these advantages can serve as a trigger for business growth within the unique window of opportunity when only a few retailers are leveraging this technology to its full potential.
Why embrace computer vision with N-iX?
- N-iX is a reliable global vendor with over 20 years of experience in Data Science, AI, and Machine Learning projects.
- The company's team consists of more than 2,000 software engineers and IT experts, including 200 in Machine Learning.
- The company strictly adheres to international industry standards, such as ISO 27001, ISO 9001, ISO 27001:2013, GDPR, and PCI/DSS.
- N-iX has been recognized by ISG as a rising star in Data Engineering and has earned a reputation as a trusted software development vendor. The company has also received numerous awards and industry ratings, including IAOP, GSA, CRN Solution Provider 500, and ISG.
- 30th Annual Retail Technology Study by RIS
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