Retailers are hemorrhaging $162.7 billion in lost margin each year due to in-store inefficiencies — a 27% increase from 2024 — and pressure is rising, according to a new study from Coresight Research and Simbe.
The State of In-Store Retailing 2025 highlights an urgent need to digitize stores using AI and automation, with the findings demonstrating how top retailers are closing the execution gap and why others risk falling permanently behind, according to a news release.
“Industry leaders are no longer asking if stores will become intelligent — but when,” says Brad Bogolea, CEO and co-founder of Simbe. “Retailers need a real-time view of what products are on shelves, where they are and whether they’re priced correctly. We built Simbe to help retail teams answer those questions — automatically, at scale and without guesswork.”
Key findings from the report:
- The cost of inefficiency: Retailers now lose 5.5% of gross sales to in-store inefficiencies — up from 4.5% in 2024 — representing a $162.7 billion opportunity across key U.S. sectors, including grocery, mass merchandise, drugstore, DIY and warehouse clubs.
- Mounting margin pressure: 81% of retailers report losing at least 5% of operating margin due to in-store inefficiencies, up from 75% last year.
- Labor-related challenges drive inefficiencies: Shrink (42%), manual tasks (39%) and high employee turnover are the biggest contributors to store inefficiencies.
- Execution gaps are widening: Promotion execution errors are now the top operational challenge (39%), followed by product pricing errors (37%) and misplaced or missing items on shelves (37%).
- Technology use is rising but still underutilized: 66% of retailers have begun implementing store intelligence technologies, but only 20% have fully scaled them, leaving a significant opportunity for early movers.
- Investment momentum: Planned investment in store intelligence technologies is up 151% year-over-year. Shelf-digitization technologies, including robotics, saw the largest jump in adoption, with a 16-point increase.
“The next 12 to 18 months will determine who leads retail’s next era,” says Deborah Weinswig, CEO and founder of Coresight Research. “Retailers that fail to adopt holistic store intelligence strategies risk falling into a permanent margin disadvantage as automation reshapes in-store execution.”
Retailers using Simbe’s Store Intelligence platform are already realizing the benefits, according to the release. For example, ShopRite leveraged Simbe’s autonomous Tally robot to cut out-of-stocks by 50% in one of its highest-volume stores. Other Simbe customers report 98%-plus on-shelf availability and 90%-plus improvements in pricing accuracy.
