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Retail Solutions: AI Solutions for Smart Shelves

Table of Contents:

Shelves aren't just furniture anymore

I'm old enough to remember a time when stores had little price tags stuck on all their products, and they were often the deciding factor in what people would pay for them. You'd bring the item you wanted to buy to the cash register, where they'd look at the price tag and punch those numbers into the cash register. It would then display a total price, you'd pay, and then you'd get your receipt and a handful of change which you'd try not to drop. There was no automatic recording of what part of inventory had just been purchased, nor was there any guarantee some sneaky person hadn't swapped price tags with a cheaper item.


While price tags still exist, most retail stores now stack all of a single product behind a little price card, and the item is scanned at the cash register. The price of the object is retrieved from a database, and the inventory system can be updated to note that there is one less of that item in stock. Smart shelves are a natural extension of this system.


What are Smart Shelves?

Smart shelves are the practice of using modern technology such as displays, wireless connectivity, inventory tracking to make retail a more pleasurable experience for all involved. Especially in today's world of super-simple online shopping and product shortages, making in-person shopping a more pleasurable and manageable task for both the customer and the store is of vital importance.

Digital Price Displays

Back in ye olden tymes, retailers relied on paper labels to update their prices and show discounts on items. If any of the prices changed, or a product went on sale, they'd have to manually reprice every item. This system is time-consuming and reduces the opportunity to attend to customers, as well as being a tedious and somewhat demoralizing job for humans. We live in a world of screens -- why not do the same with price tags? By using electronic shelf labels, you eliminate all the paper and make price updates instantaneous and more convenient for your entire store.


The COVID-19 pandemic created a historic disruption of the retail world. Stores closed, e-commerce soared, and shopper behavior evolved at a moment’s notice. While some of the disruptions brought on by the pandemic will slowly fade with time, many of the changes will have lasting effects. For example, the ability to quickly, seamlessly and accurately change prices on in-demand SKUs with little to no human interaction has become a key differentiator, especially as shoppers continue to embrace digital shopping in droves.


To add to the appeal of digital labels, there are plenty of other benefits other than just displaying product prices. Digital labels on foods, for example, can display:

  • Nutritional facts
  • Size
  • Price per weight
  • Stock remaining
  • Additional product information

By adding the ability to display QR codes or even bluetooth beacons, customers could get a wealth of information about a product using their phone's camera or bluetooth.


Dynamic pricing also can provide the ability to set flexible prices based on current market demands, or adjust prices to better match those of competitors. Using AI to optimize pricing, retailers can boost stagnant sales during slow periods or raise prices to maximize margins when demand dictates. By automatically tracking in-store inventory levels, they can also enhance inventory management and make smarter restocking decisions. Tracking the presence of items on the shelves also reduces theft and shrinkage.

Happier Customers

Smart shelves benefit and engage with customers to create personalized shopping experiences. As previously mentioned, sensors on a shelf can detect a customer's approach and trigger a relevant promotion displayed on digital signage based on their previous shopping history. This is not unlike how many retailers print customer-relevant coupons on receipts, but without the problem where they're issued as the customer is leaving the store. Shelving can also automatically pair with a store's app to cause relevant products to flash at the customer to catch their attention. A shopping list created at home might automatically trigger real-world notifications on a shelf for the items on the list.


Think of how convenient this could be when for example, shopping for hardware items like nuts and bolts. Rather than pore over the hundreds of little bins in a home improvement store, the customer's app could notify the shelf which screws they needed, and the shelf would guide them to it with lights or sound. This combination of smart shelves and a mobile app makes a currently frustrating task easier -- one that often requires help from the store salespeople. This will have the effect of reducing customer frustration and thus increasing sales.


Inventory Optimization

Apart from only tracking products that are purchased, smart shelves can also use weight and placement sensors to detect when an item is present and when it is removed. They could sense how many people pick up and examine a product and either put it in their cart, or put it back where it was sitting. Using data from these shelves, stores could optimize their layouts, what products are featured, and even perform A/B testing to see how well their current placement leads to sales.


Such weight sensors and cameras can also help ensure that items are placed where the merchandising manager wants them to be, and large digital signs can attract customers to particular areas. Expensive items like phones and tablets, which usually require an employee to release from behind a locked glass cabinet could be automatically released by customers with their phone app.



While shopping trends were already changing, the arrival of the coronavirus and the resulting stay-at-home orders, social distancing mandates, and safety concerns massively accelerated the shift. And now today, with COVID restrictions largely fading away, the significant shortages and the way people think about shopping has likely changed indefinitely. Retail needs to use as many resources to merge the online and offline experience to bring the convenience of immediate fulfillment when shopping in person with the intelligence of online systems.

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