Did supermarkets really think they could expect customers to work for free by processing their own checkouts? Apparently so, which has only fueled grocery theft which has quickly become the biggest problem faced by retailers while also promoting investment in loss prevention tech offered by RocketBoots (ASX: ROC).
The need for robust loss prevention solutions has grown. Coles, one of Australia’s largest supermarket chains, has reported losses of more than $1 billion over the past four years due to theft, while Woolworths faces similarly high figures, with the combined loss estimates for the two retailers surpassing $3 billion. Self-service checkouts, which are convenient for both customers and retailers, have inadvertently become a boon for thieves, allowing them to exploit the unmanned systems through techniques like not scanning items, swapping barcodes, or manipulating the payment process. But those same supermarkets are more content with these losses than employing staff to man checkouts.
These theft problems however, are not isolated to Australia with RocketBoots signing its first major international contract with UK grocery retailer The Southern Co-Operative. This four-year deal will see RocketBoots’ AI-powered loss prevention software deployed across multiple stores in three phases, with the potential total value reaching $1.8 million. This contract is part of RocketBoots’ strategy to expand internationally, establishing a foothold in the UK, EU, and US markets.
RocketBoots’ software is designed to empower retailers to optimise front-of-house operations, addressing key issues such as rising theft at self-checkouts, staffing costs, and customer service volatility. The technology tackles this challenge by leveraging artificial intelligence (AI) and machine learning to detect suspicious behaviour in real-time, enabling retailers to swiftly identify and act on potential theft.
This technology aims to swing the power balance back to retailers in the battle against shrinkage, which occurs when inventory records do not match actual stock levels due to theft, fraud, or error. RocketBoots’ software ensures that retailers not only reduce losses but also optimise their staffing costs and improve customer service.
With the rollout of Stage A of the contract already planned for this year at eight UK sites, RocketBoots’ annual recurring revenue is expected to increase by $160k initially, and up to $450k as subsequent stages are implemented.
RocketBoots CEO, Joel Rappolt, said: “This deal shows international momentum and demonstrates the growth potential. RocketBoots has secured 2 new customer contracts in the past couple of months, and this is a convergence of our customer sales pipeline and ability to demonstrate the value our technology delivers.
“Importantly, we see this as a beachhead deal where RocketBoots can position itself for further growth in the UK retail grocery sector and increases our confidence in closing the other trials we have on foot.”
Rocketboots is currently engaged in advanced discussions with over 30 other potential customers, representing more than 10,000 retail sites worldwide.
For FY24, RocketBoots reported $730k revenue and net loss after tax of $2.9 million. As of 30 June 2024, the Company had $555k of cash on hand.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, bloodstock enthusiast and former Analyst.
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