US-based retail automation technology provider Focal Systems has secured $25.8m in a series B round featuring workplace performance data and management software provider Zebra Technologies, as brick-and-mortar retailers integrate more automated technology.
Point72 Ventures led the round, which included fellow venture capital firms Costanoa Ventures and Zetta Venture Partners, bringing its total funding to over $40m. The proceeds from the round will be used to develop its technology and grow its sales and technical teams.
Focal uses artificial intelligence (AI) and computer vision-based perpetual inventory (PI) technology to optimise tasks and smoothen store operations, creating actionable alerts designed to help stores minimise situations where they run low or out of inventory.
The technology also helps track staff performance and aid in stocking training, and this type of meticulous tracking around physical stores could be crucial to them staying open amid increasingly aggressive competition with a growing number of online rivals.
Consumer focus is shifting towards maximising convenience in-store and retailers are increasingly integrating technology that leverages some of the only remaining advantages that brick-and-mortar has over online shopping: the instant gratification of immediate purchase and the in-store experience.
Market and consumer data and research provider Statista predicts global retail e-commerce sales will rise from roughly $4.28 trillion in 2020 to $6.38 trillion in 2026.
In addition to streamlining the shopper experience, retailers are also savvy to the benefits that digital eyes around a store can bring in terms of collecting data on points such as how design factors correlate with making shoppers stay longer, spend more or return to the store in future.
Focal rolled out over 40,000 cameras in stores over the course of 2021, representing a 400% increase on the 10,000 it had before the year began, and already has commitments to roll out a further 200,000 this year.
Francois Chaubard, chief executive of Focal Systems, said: “I love partnering with retailers to transform their stores. Retailers are pushing harder than ever before to adopt computer vision and AI at scale, and Focal is here to help.
“At a time when supply chain issues, organised retail crime and labour shortages continue to challenge the retail industry, merchants are still relying on outdated and inaccurate sales-based PI systems that just do not work.
“Approximately half of the out-of-stock items on a grocery store’s shelves are not related to supply chain issues or labour shortages – they are a result of sales-based PI systems not accurately capturing data. Focal solves this.”
Perhaps the most famous example of a company taking big strides into automation is Amazon with its checkoutless Fresh stores, which also use computer vision to track everything shoppers take off the shelves and automatically bill it to their accounts.
Grocery delivery service Instacart struck a $350m cash and stock deal in October 2021 to acquire smart retail technology developer Caper AI, which produces smart trolleys that integrate weight sensors, barcode scanning and payment mechanisms to automate retail purchases. It also has an automated checkout counter product for customers to use in-store.
Even with more automation, however, physical retail has been losing ground to online shopping, where AI is also a major factor in how retailers are driving sales, producing automatic marketing and recommendations engines for customers, gathering and analysing customer sentiments, managing stock and orders and predicting consumer behaviour.
