The home PC changed retail stores forever. Shekel Brainweigh can do it again

In a world ever-dominated by Big Tech since the introduction of the home computer in the early 2000’s; digitisation, automation – and more recently, artificial intelligence – has been the name of the game across all sectors and economies.

This, too, goes for the retail sector – which is, perhaps, where our new digital world has become most apparent across two decades.

Consider the decline of bricks and mortar stores broadly in favour of online retailers like eBay and Amazon. Walmart and Costco have introduced e-shopping platforms; so too have Australian supermarkets Coles and Woolworths.

Retail has become digital – and so too has inventory management. Enter ASX-listed and Israel-based retail disruptor Shekel Brainweigh (ASX:SBW).

What does Shekel Brainweigh offer?

Shekel Brainweigh’s offering to the market, in layman’s terms: the company makes AI-powered weighing technologies installed into retail businesses which automatically track what a consumer takes off the shelf.

In a recent interview with The Market Online, the company’s Country Manager for Australia Danny Nadri spoke to Presenter Fouad Haidar about Shekel Brainweigh’s impressive streak of double digit growth in recent years.

TMO’s Fouad Haidar interviews SBW’s Danny Adri for Capital Compass

The tech is also used in the company’s ‘Hubz Smart Coolers’ and ‘Innovendi’ vending machine solutions. But that’s hardly an exhaustive look at the company.

Shekel Brainweigh saw recent success in the last quarter – more on that shortly – marketing its smart shopping carts (Australian readers: trolleys) to other businesses.

Those trolleys keep track of what is added and taken out, reducing shoplifting risk and reducing the need for businesses to hire staff to tediously perform stocktake.

Similarly, Shekel Brainweigh was an early adopter of self-checkout technology that was catalysed by the COVID-19 pandemic.

Shekel, however, began investigating that technology all the way back in 2010.

Worth noting is that the company can also offer entirely autonomous stores – either by fitting out entire bricks and mortar locations with its AI and automation solutions, or, by offering its capsule walkthrough mini-stores.

Amazon was well reported for introducing ‘walk-out’ automated small supermarkets across the US in recent history, and other players have been probing around the margins of the concept as well.

Wide range of high-profile users

To call “impressive” the cohort of other household name companies SBW has done business with is something of an under-representation.

Shekel Brainweigh has previously sold its tech to Toshiba, Fujitsu, and Datalogic.

Its end users include US-based majors like Walmart, CVS, Dollar General, The Home Depot, Europe’s LIDL – just to name a few.

If you’re looking for a revolutionary digital disruptor in the retail space – look no further than ASX-listed Shekel Brainweigh.

The company doesn’t just necessarily pose a threat to established power structures in the retail market, either. Increasingly, the company is exploring the healthcare market.

In FY22, Shekel inked sales of US$10.15M in the healthcare market with growth in that department up 3.5% YoY.

While not its bread and butter so to speak, healthcare offers a promising growth market for the company – especially as it notes healthcare budgets, post-COVID, are returning to a place where elective care is more feasible and attractive to both consumers and providers.

The company’s precision weighing tech, from the Original Equipment Manufacturer (OEM) point of view, can be easily used in incubators and warmers for infants; and naturally, the company can easily pivot into producing scales to weigh patients.

Similar prospects abound for the agricultural and industrial sectors respectively.

While together reflecting the smallest cohort of Shekel’s revenue raising prospects, with sales at US$5.14M in FY22, the company describes itself as a “local market leader” in Israel, with its weighing tech able to be used to tackle livestock and dairy applications.

Shekel also outlines it is able to offer airport baggage weighing options; as well as similar applications in military and manufacturing.

Artificial Intelligence thematic

Backed by AI tech in nearly all of its major product offerings, Shekel Brainweigh is well poised to leverage the growing Artificial Intelligence thematic sweeping world markets.

The company expects investments by retailers in AI to hit US$23B by 2025, backed by research from Juniper.

For context: in 2020, this market was sized at $5B. That’s a fivefold increase over as many years – a factor of return scantly seen.

Shekel Brainweigh stands at the forefront of the forgotten-but-still-functioning Internet of Things (IoT) market, now enhanced by the recent AI boom that coincided with cheapening costs for machine learning.

Also worth considering is that the company’s technology is validated by global microchip and IT player Intel – with which Shekel is a “gold partner.”

The company’s AI tech, it reports, is the most accurate at identifying products at checkouts and in-carts; able to monitor and track different product classes being taken off the same shelf, and Shekel reports its more affordable than RFID and computer vision systems.

Its data collection and projection capabilities can also offer retailers a heatmap of their shelves, which can be seen as a direct visualisation of customer preference and behaviour (and thus psychology.)

Strong performance underpins potential

This is all well and good – but how does Shekel Brainweigh perform in terms of earnings?

Across the first three months of 2024, the company inked an A$764K deal with Cust2Mate, a retailing solutions provider that falls underneathToronto-headquartered and publicly-listed A2Z Smart Technologies.

That deal was for its smart cart (trolley) technology which weighs products in-cart, and also has product memory functions as well as in-built self-serve scanners built near the handle – allowing for completely automated store functionality.

The company also inked a second deal at A$454K with UK partner company Sobie-McIntosh. That company is interested in Shekel’s Smart Coolers products – ultimately, next-gen automated vending machines that utilise Shekel’s market leading AI-backed tech.

Revenue growth overall is up for the third consecutive year at US$27M and the company is launching its upgraded AI tech platform called Sentinel – currently the subject of a roll-out trial with a major but undisclosed European retailer.

The company is also active on the road, advertising its wares at two major exhibitions across Q1 CY2024, including EuroCis24 – a leading retail exhibition based, this year, in Dusseldorf, Germany.

With a new AI product under testing, active marketing continuing and over A$1.2M revenue in the first three months of 2024, Shekel Brainweigh is proving to be an effective, and attention-grabbing, actor in this space.

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