In-Store Inefficiencies are Costing Retail $196 Billion Annually
A new report found that in-store inefficiencies now cost retailers $196.4 billion annually, with technology sequencing emerging as a critical factor in maximising retail technology investments.
Retailers have spent the past several years modernising stores with new technologies designed to improve inventory accuracy, streamline operations, and enhance the customer experience.
Yet despite growing adoption of store intelligence platforms, many retailers are finding that technology alone is not solving persistent operational challenges. The latest research suggests that the problem is less about the level of investment and more about how those investments are prioritised.
As retailers expand their digital capabilities, the sequence in which technologies are deployed is emerging as a critical factor in determining whether those investments deliver measurable returns.
Retailers are accelerating investments in store intelligence technology at record levels, yet operational inefficiencies continue to rise, costing 6.4% of gross sales annually, up from 5.5% in 2025 and 4.5% in 2024, which totals $196.4 billion across key retail sectors.
According to Coresight Research’s annual The State of In-Store Retailing 2026 study, retailers are deploying pricing software and supplier platforms before establishing the shelf-level data these systems require. This unoptimised technology sequencing creates the gap between technology investment and ROI.
Sponsored by Simbe and RELEX Solutions, Coresight Research conducted a survey of 200 US-based retail decision-makers.
Technology Adoption Surges as Operational Costs Rise
Store technology adoption is nearly universal: 97% have deployed or plan to deploy store intelligence technology within the next year.
Yet inefficiencies now cost retailers a growing share of gross sales. The research shows that technology sequencing—not investment alone—is what separates value creation from value erosion.
“Store technology decisions this year will shape competitive positions for decades,” said Deborah Weinswig, CEO and Founder of Coresight Research.
“Our data shows that prioritisation determines return. Retailers that deploy shelf digitisation technology first build a compounding competitive advantage that is difficult to replicate.”
The findings point to a widening disconnect between technology adoption and operational outcomes. While most retailers have embraced store intelligence initiatives, many continue to implement advanced pricing, inventory, and supplier management systems before establishing a reliable source of real-time shelf data.
As a result, the very systems designed to optimise store performance often operate with incomplete or outdated information. “What this research shows is that isolated technology decisions create isolated results,” said Doug Iverson, Senior Vice President at RELEX Solutions.
Key Report Findings
While retailers continue to expand store intelligence investments, the research indicates that the order of technology deployment is increasingly determining which organisations achieve measurable operational gains. Here are the findings:
- Investment has increased, but losses are accelerating:
60% of retailers have already scaled or are actively scaling store intelligence technologies, up 18% year over year. Yet in-store inefficiencies cost retailers 6.4% of gross sales annually—up from 5.5% in 2025 and 4.5% in 2024, totaling $196.4 billion across key US retail sectors.
- Technology sequencing determines competitive advantage:
Only 33% of retailers are investing in shelf digitisation. Many prioritise pricing and supplier systems over shelf digitisation, despite those systems’ reliance on shelf-level data to perform. Not having established the shelf digitisation foundation limits return.
- Retailers with digitised shelves are seeing enterprise-wide gains:
BJ’s Wholesale Club accelerated online order fulfilment by approximately 40%. Schnucks Markets detects 14x more addressable out-of-stocks and has reduced out-of-stock items by 30%.
- Store intelligence elevates retail labour:
86% of retailers report reduced time on manual tasks since introducing store intelligence technology, with an average 14% decrease reallocated to higher-value work, such as merchandising and product expertise, resulting in an enhanced customer experience.
“A digitised shelf is the foundation that every retail system depends on,” said Caitlin Allen, Senior Vice President of Market at Simbe.
“Leading retailers have modernised operating models with data that flows seamlessly across store operations, supply chain, and digital channels. This shift improves execution across the store while enabling teams to focus on higher-value work for the customer.”
Building the Foundation for Long-Term Retail Performance
The report ultimately highlights a shift in how retailers should evaluate technology investments. Rather than viewing store intelligence as a collection of individual tools, leading organisations are increasingly treating it as an interconnected operating model built on accurate, real-time store data.
Doug Iverson added, “Retailers see the biggest gains when store data flows seamlessly into supply chain, merchandising, and pricing decisions. That’s how you reduce inefficiencies at scale and ensure every system is working from the same version of reality.”
As competitive pressures intensify and margins remain under strain, the ability to identify and eliminate inefficiencies has become a strategic priority.
For retailers planning future technology roadmaps, the findings suggest that success will depend less on how much they invest and more on how effectively they sequence those investments.
Optimally sequenced store technology offers real advantages for those that get it right. As Kim Anderson, VP of Store Operations Support at Schnuck Markets, Inc., said, “Shelf intelligence must come first, or every downstream system will fall short. If you don’t have a reliable view of what’s actually in your stores, nothing else works.
