Fintech Powerhouse Ramp Eyes 16 Billion Valuation
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19. June 2025
Retailers Face Existential Crisis As Sales Plummet Amid Inefficiencies
The Retail Industry on the Brink: A Call to Action for Digital Transformation
A recent study by Simbe Robotics Inc. and Coresight Research has shed light on the urgent need for retailers to adopt digital transformation strategies, highlighting the substantial losses retailers incur due to in-store inefficiencies.
According to the “State of In-Store Retailing 2025” report, retailers are losing a staggering $162.7 billion in margin each year due to in-store inefficiencies, representing a 27% increase from 2024. This significant loss is fueled by several factors, including labor challenges, execution gaps, and the underutilization of technology.
Labor Challenges are a Growing Concern
The retail industry has long struggled with labor challenges, which have become increasingly complex in recent years. Eighty-one percent of retailers report losing at least 5% of operating margin due to in-store inefficiencies, up from 75% last year. These issues not only erode profit margins but also affect customer satisfaction, as lost or misplaced products can lead to frustration and a loss of trust.
The consequences of these labor challenges are far-reaching. Shrinkage, manual tasks, and employee turnover are the biggest contributors to store inefficiencies. Retailers must acknowledge the elephant in the room and take concrete steps to address these issues.
Execution Gaps: A Widening Concern
In addition to labor challenges, execution gaps are widening, with promotion execution errors now the top operational challenge at 39%, followed by product pricing errors at 37%, and misplaced or missing items on shelves at 37%. These errors can have devastating consequences for retailers, leading to lost sales, damaged reputations, and significant financial losses.
The report highlights the need for retailers to adopt holistic store intelligence strategies that incorporate AI, automation, and data analytics. By leveraging these technologies, retailers can gain a real-time view of their stores, identify inefficiencies, and make data-driven decisions to optimize operations.
Technology Adoption is a Mixed Bag
Despite the urgent need for digital transformation, many retailers are still underutilizing technology in their stores. Only 20% of retailers have fully scaled their store intelligence technologies, leaving a significant opportunity for early movers who can capitalize on the benefits of AI and automation.
Shelf-digitization technologies, including robotics, saw the largest jump in adoption, with a 16-point increase. These innovations are transforming the retail landscape, enabling retailers to optimize product placement, reduce waste, and improve customer experience.
Simbe Robotics Inc. is at the Forefront of Digital Transformation
Simbe Robotics Inc. is providing retailers with the tools they need to succeed in the age of AI. The company’s Store Intelligence platform empowers retailers to automate tasks, reduce manual effort, and gain insights into store operations.
For example, ShopRite used Simbe’s autonomous Tally robot to cut out-of-stocks by 50% in one of its highest-volume stores. Other customers have reported more than 98% on-shelf availability and over 90% improvements in pricing accuracy.
Strategic Partnerships are Key to Success
Simbe has recently announced a strategic partnership with DeCicco & Sons, a family-owned grocery chain in New York State. The partners will bring Simbe’s Store Intelligence platform to DeCicco’s flagship Sleepy Hollow location and additional stores in Eastchester and Larchmont.
The integration of Simbe’s platform with digital shelf displays from Aperion, contactless checkout, and mobile integrations creates a seamless, modern retail environment that boosts product availability, pricing accuracy, and service quality while reducing manual effort. This partnership reinforces Simbe’s role as the infrastructure powering modern retail.
Retailers Must Act Now to Stay Ahead
The “State of In-Store Retailing 2025” report serves as a wake-up call for retailers to acknowledge the urgent need for digital transformation. By embracing AI, automation, and data analytics, retailers can optimize operations, reduce waste, and improve customer experience.
Those who fail to adapt will be left behind in an increasingly competitive retail landscape. The stakes have never been higher, and retailers must act now to stay ahead of the curve.