DIGITAL WORKERS ARE HERE — AND THEY'RE ASTONISHINGLY EFFICIENT

Israel's retail sector is in transformation. If you have noticed Thai, Indian or Sri Lankan workers at your local grocery store, you are certainly not alone. Food retail chains, like much of the traditional economy, are facing severe labor shortages, leaving executives scrambling to find enough staff to keep operations running. In the interim, leading chains are bringing in workers from developing countries. The long-term future of the entire sector remains uncertain.

But, as it turns out, there is a sustainable solution, and companies around the world are racing to develop it, with the Israeli startup ShopperAI leading the way. The solution is digital agents, and is it poised to transform the Western retail world.

Retail Chains Are Facing Severe Distress
If the name ShopperAI sounds familiar, it is likely because of the attention it received when the company became the first to introduce AI- and computer-vision–based technology to Israel's retail market. Layering its platform onto existing in-store security cameras, ShopperAI enables retailers to analyze consumer behavior in physical stores, monitoring, measuring and analyzing shopper behavior in real time. Rapidly gaining traction, particularly among food retail chains, it took the Israeli market by storm.

Now entering its next evolutionary stage, Shopper AI is, in response to market demand, shifting its focus toward creating digital agents for its diverse customer base.
"The future belongs to AI agents," says Lanor Daniel, the company's founder and CEO. "Retail chains in Israel and worldwide are facing acute shortages of frontline workers such as cashiers and shelf-stockers in supermarkets, convenience stores and gas-station shops. Recruiting young employees has become particularly difficult as many no longer see a future for themselves in this industry, gravitating instead toward easier, screen-based jobs. The data show a staffing shortfall of 30 to 40 percent in these roles, with the situation is especially severe in Israel, the 'Startup Nation.'"

How Does the Labor Shortage Affect Retailers — and Consumers?
"For retailers, the impact is shrinking profit margins," explains Daniel. "When shoppers can't find what they're looking for in the supermarket because there aren't enough employees to restock the shelves, or because an aisle is blocked and no one is available to clear it, they'll simply go elsewhere or shop online. This is obviously bad news for supermarket owners, but it's no less damaging for consumers. When retailers' margins are under pressure, they're less able to offer attractive promotions, and the rising cost of living ultimately hits all of us in the pocket."

Seeing the Shop Floor at Every Moment
The solution developed by that ShopperAI to the challenge facing the entire retail industry is digital agents to perform many of the tasks traditionally handled by human employees, and do so with exceptional speed and efficiency.A single agent can oversee a wide range of functions, from auditing and tracking shelf inventory to ensuring that all areas of the store remain accessible and available to shoppers. With human employees nonetheless remaining essential, the result is a hybrid that combines people and machines, significantly enhancing overall workforce productivity.

"Supermarket employees have an endless list of tasks — continuous audits, checking inventory on shelves and in storage, ensuring that every aisle and shelf is accessible to shoppers, placing orders and more," says Daniel. "This is where digital agents can, and already do, play a key role, taking over many of the routine tasks traditionally performed by frontline workers. At the same time, there are things digital agents can't do. That's why the combination of the two is the winning formula. Our platform also lightens the workload of branch managers and retail CEOs, transforming ordinary employees into smart, efficient and better focused operations managers through real-time alerts."

How Does the System Work?
The ShopperAI platform is based on five years of research and development, during which a highly complex technology was turned into a simple, user-friendly solution, relates Daniel. "It is based on the security cameras already installed in every supermarket and retail business, which we convert into cameras that monitor every corner and every shelf of the store. The client — for example, the branch manager — can see the entire sales floor at any moment, and receive real-time alerts about stock shortages, planogram deviations and accessibility issues."
The platform includes an alert system that delivers push notifications directly to the client's smartphone or computer, using messaging apps they already rely on, such as WhatsApp and iMessage. In other words, it integrates with apps already in use across the business.
"This approach keeps managers in full control at all times," says Daniel. "Because it's camera-based, CEOs can monitor all their branches countrywide and even worldwide, so that they know the status of all of them at any given moment. This is a major market breakthrough.Digital agents streamline operations and reduce losses. They're so efficient that, when a product shortage triggers an alert, they can, with managerial approval, place a rapid order with the supplier, ensuring that inventory is replenished quickly."

How Did You Achieve These Insights?
To get to this point, ShopperAI built on its earlier work with branch managers in food retail chains and supermarkets, analyzing consumer behavior and gaining insight into how deeply they were impacted by the labor shortage. "We were constantly thinking about solutions," says Daniel. "Then, in a moment of clarity, we realized that the simplest was also the most effective: leveraging the cameras already installed in supermarkets for monitoring and control. From there, we developed our groundbreaking AI system and delivered a solution to a market eager for innovation."

Is the System in Operation?
The system is operational and performing well in close to a hundred branches across most of Israel's food retail chains. "I believe it won't be long before we see not just individual digital agents but entire fleets of them working in retail chains in Israel and worldwide," says Daniel. "Four years from now, people won't ask how many employees a branch has. They'll ask how many digital agents are operating!"

Simple Implementation, Rapid Return on Investment
According to Daniel, the system immediately impresses retailers, who quickly recognize how much it can save them by reducing losses from shrinkage, theft or shortages beyond their control.

"No retailer can know precisely how much inventory is on their shelves," she says. "When do they know for sure? Only during inventory counts — and, by then, the damage is already done. That's why our technology is so significant. Imagine a product like bread, sugar or milk out of stock for four to five hours a day. We're talking about huge losses — up to half a million shekels a month. With our system, we've reduced those hours to just a few minutes."

Another key advantage is the system's ease of implementation, using the cameras already in place, which minimizes financial risk for retail executives and delivers return on investment from the very first month. "Retailers have been burned by cumbersome, complicated technological solutions that required extra equipment and promised unrealistic returns," notes Daniel. "In contrast, our product is simple to use, needs no additional hardware and provides an exceptional ROI, paying for itself within the first month. This platform is truly a game-changer for the retail world."

Technology Can Create Real Change
Daniel founded ShopperAI in 2019 with former partner Sivan Friedman Joseph. The company's initial focus was developing technology that enabled retail chains and brands to gain insights into shopper behavior. With the backing of prominent investors, such as the Victory retail chain and the BRM Grou, it gradually captured the Israeli market. Today, Daniel is the sole controlling shareholder, and ShopperAI has raised approximately $14 million.

"The retail world used to rely on reports, spreadsheets and BI systems that explained what had already happened," she says. "Today, the focus has shifted to an execution-oriented environment with AI-based agents operating on the shop floor in real time, capable of placing orders, restocking shelves and optimizing supply chains."

When global players, such as OpenAI and Walmart, place intelligent agents at the core of their strategies, it's clear that the market is entering a new era, she notes. "The main challenge in retail today isn't lack of technology, it's the execution gaps — empty shelves, planogram noncompliance and processes that don't translate into action on the ground. Take, for example, Nestlé, which recently announced plans to lay off 16,000 employees globally due to inefficiencies in its branches. The outcome is higher prices, a cost ultimately borne by the consumer.
"This is exactly ShopperAI comes in. Our goal isn't to replace workers, but to help retail chains operate more efficiently, more accurately and with better control, even under operational pressure. When store management becomes more precise, the entire value chain benefits — from operations to product availability to the consumer's shopping experience. For me, this is where technology can create real and meaningful change. AI's capabilities today are truly remarkable, and if we can make them accessible this will result in better promotions and lower prices. That means we're helping reduce the cost of living which, to me, is a source of personal pride."

What About International Expansion?
There's tremendous demand for ShopperAI's technology, says Daniel. "We've recently entered Europe and Canada, and are about to launch in the US market. The growth is spreading like wildfire, which is incredibly exciting for me."

Are You Particularly Good at Identifying Market Needs?
"Absolutely!" responds Daniel. "We always pinpoint the market's current need. In the early years, we recognized that companies needed AI tools to analyze consumer behavior and deliver commercial insights to boost profits. We then identified the pressing problem of labor shortage, and moved into the field which we're now pioneering: commercial AI agents. You could say that we're changing the world. I'm proud that this revolution is being led by our blue-and-white Israeli company."

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In collaboration with ShopperAI