Following record revenue in 2021, artificial intelligence (AI) weighing technology developer Shekel Brainweigh (ASX: SBW) expects this momentum to continue as it expands globally amid the rapidly growing autonomous retail sector.
Describing itself as an AI innovator, Shekel Brainweigh has developed advanced weighing technology for retail, healthcare, industry and OEM markets.
In OEM, Shekel Brainweigh’s technology is incorporated as weighing solutions for global majors such as GE Healthcare, Datalogic, Toshiba, and Fujitsu. Shekel Brainweigh is also classified as a gold partner for major tech company Intel.
Shekel Brainweigh has been split into two main business divisions: scales and retail innovation.
The company’s scales division has been operating for the last four decades and continues to grow and be profitable.
Shekel Brainweigh says it has established a position as a “significant pioneering leader” in designing and manufacturing electronic scales, advanced weighing systems and force measurement applications.
These scales are used in healthcare, retail, industry and as OEM weighing units in partners’ products.
In healthcare, the company’s scales are sold under the brand Healthweigh for various purposes including fitness, baby and neonatal, special needs, and physicians.
Also in this space, Shekel Brainweigh manufactures OEM weighing units for inclusion in baby incubators of GE Healthcare and the Japanese company Atom.
For retail, Shekel Brainweigh’s technology is used in self-checkout systems to provide precision scale and weighing solutions.
Shekel Brainweigh has used “highly advanced” machine learning and AI to create a suite of automation products that aim to transform the retail industry and “revolutionise” the customer experience.
With the contactless retail market forecast to boom in the coming years, the company has established this division to pursue opportunities in the space with new products created and other innovative technologies under development.
As part of this, Shekel Brainweigh recently unveiled its first autonomous store in the US just south of Atlanta.
Shekel Brainweigh chief executive officer and executive chairman Arik Schor said the US opening attracted “wide media interest”.
Combined with Hitachi’s consumer tracking technology and UST’s digital solutions, customers use a mobile app, make purchases from Shekel Brainweigh’s “product-aware shelves” and pay digitally – eliminating the need for checkout lines.
The US opening follows two existing stores in Paris, France, one in Germany and another one to be opened in Israel in a few weeks.
Under the retail innovation division’s business model, Shekel Brainweigh’s strategy is to generate revenue via three streams – sale of hardware, software as a service (SaaS), and, eventually, data analytics as a service (DaaS).
Mr Schor added the company anticipated greater demand for its autonomous stores and other innovative retail solutions over the next 12 months – particularly in the US, EU and Asia.
“We see vast potential for our technology in a range of applications and ways in which we can pair our hardware with our DaaS and SaaS capabilities to provide our customers with more accurate and valuable tools.”
For the financial year ending December 2021 (FY2021), Shekel Brainweigh achieved numerous milestones which drove revenue to hit new records.
During the period, revenue reached US$23.1 million (A$31.5 million) – up 26% on FY2020 levels.
The existing and profitable scales business division generated revenue of US$22.2 million (A$30.3 million), while the retail innovation business revenue grew 244% to US$921,000 (A$1.26 million) in FY2021.
This resulted in a gross profit of US$9.03 million (A$12.32 million), which was almost 30% higher than US$6.97 million (A$9.51 million) in FY2020.
Mr Schor said the record revenue across all areas of the business was a “major accomplishment” – particularly given the challenges posed by COVID-19 including product shortages, shipment delays and increased employee leave.
“Our strong revenue result demonstrates the continued demand for our products and our ability to meet our customers’ needs, despite significant headwinds.”
Frictionless shopping trend
Despite the supply challenges from COVID-19, the pandemic has also created mounting demand in the retail sector – particularly with frictionless or autonomous shopping.
This was propelled by consumers moving to contactless shopping experiences wherever possible.
Analysts estimate the retailed transactions through frictionless checkout technologies will be valued at US$387 billion (A$528 billion) by 2025 – up from US$2 billion (A$2.73 billion) in 2020.
As this transition evolves, retailers are expected to invest US$23 billion (A$31.4 billion) in AI technologies by 2025.
To capitalise on this new trend, Shekel Brainweigh has continued developing its technologies and products.
Product Aware technology
Shekel Brainweigh has designed the Product Aware technology, which is undergoing additional development and enhancement for use in multi-shopper autonomous stores.
The Product Aware Shelf technology uses Internet of Things (IoT), on-shelf electronics, software, AI and algorithms to identify products and movements on shelves.
A Product Aware Bay has also been developed which comprises up to eight shelves.
Also using the Product Aware technology is Shekel Brainweigh’s first generation Innovendi smart fridge, which is an unattended automated vending machine.
The Hubz unattended micro smart cooler is Shekel Brainweigh’s second generation smart fridge. Similar to Innovendi, Hubz has been designed to allow for sales of fresh and refrigerated products.
These smart fridges are already operational in several countries and are described as the “new way of vending”.
Owners of the vending machines pay for the hardware and an ongoing SaaS subscription and have noted customers end up purchasing more goods because they can personally grab their food and beverages.
On a larger scale, Shekel Brainweigh has created the Micro Market Capsule (autonomous store). This incorporates the Product Aware Bays, consumer tracking by Hitachi LiDAR sensors, and different integrated payment systems.
Fast Track launch
According to Shekel Brainweigh, most automated recognition solutions at self-checkouts rely on computer vision, RFID tags and traditional scales.
However, the company pointed out these current solutions fail to meet the accuracy threshold.
Shekel Brainweigh has developed a more advanced self-checkout solution called Fast Track, which was launched in January at NRF – the largest retail convention in NYC.
Fast Track comprises visual fruit and vegetable recognition technology that is incorporated in frictionless computer vision based self-checkouts that can be used in autonomous stores.
The ability to automatically recognise different fruit and vegetables at the self-checkout poses a challenge for retailers.
It is the lengthiest part of the self-checkout process and the easiest for consumers to make mistakes or select a cheaper alternative without detection.
Compared to current self-checkout technologies, Shekel Brainweigh’s has up to 99% accuracy, is scalable and comes with no major infrastructure costs because it can be installed in existing computing devices.
Smart carts for retail markets
Another innovation in the retail space is the smart cart.
A2Z Smart Technologies has developed the Cust2Mate smart cart for use in retail. It incorporates Shekel Brainweigh’s weighing technologies and is the world’s first proven-in-use mobile self-checkout shopping cart.
It is designed to streamline the shopping experience so that customers can “pick and go” and bypass long checkout lines.
Data is the future
As part of Shekel Brainweigh’s retail innovation division, it is developing data insight products.
The company’s machine learning and AI technology is able to collect, collate and provide valuable data that can be sold to retailers.
Retailers can then use this data to help with product placement, and provide critical information regarding consumer engagement and behaviours.
Accelerate development and growth
To fund ongoing development and expansion plans, Shekel Brainweigh recently completed a US$5 million (A$6.82 million) convertible loan and raised A$4.57 million via two share placements and a share purchase plan.
Funds will accelerate refinements underway in the retail innovation division along with commercialisation of the Fast Track technology in the US and EU.
Shekel Brainweigh is also looking to commercialise its autonomous solutions in Asia with a focus on the Japanese market.
Funds will also be used to enlarge the company’s manufacturing and system assembly capacity to support higher demand.