In-store Inefficiencies Cost Retail $196 Billion Annually Driven By Misordered Tech Deployments Strategies

New Coresight Research report finds technology sequencing, not investment level, is the key driver of retail performance.

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 total $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 unoptimized technology sequencing creates the gap between technology investment and ROI.

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 prioritization determines return. Retailers that deploy shelf digitization technology first build a compounding competitive advantage that is difficult to replicate.”

Key report findings include:

• 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 U.S. retail sectors.
• Technology sequencing determines competitive advantage: Only 33% of retailers are investing in shelf digitization. Many prioritize pricing and supplier systems over shelf digitization, despite those systems’ reliance on shelf-level data to perform. Not having established the shelf digitization foundation limits return.
• Retailers with digitized shelves are seeing enterprise-wide gains: BJ’s Wholesale Club accelerated online order fulfillment 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 labor: 86% of retailers report reduced time on manual tasks since introducing store intelligence technology, with an average 14% decrease reallocated toward higher-value work, such as merchandising and product expertise, translating to enhanced customer experience.

“A digitized shelf is the foundation that every retail system depends on,” said Caitlin Allen, Senior Vice President of Market at Simbe. “Leading retailers have modernized 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.”

“What this research shows is that isolated technology decisions create isolated results,” said Doug Iverson, Senior Vice President at RELEX Solutions. “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.”

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.—an early adopter of store technology like Tally, the world’s first autonomous shelf-checking robot—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.”

Download the Full Report: Read The State of In-Store Retailing 2026 here.