The news has not been great for retailers dependent on mall walkers for sales. Many people blame internet-based giants like Amazon for the rapid decline in profits experienced by these seemingly archaic brands. However, a deeper inspection seems to point toward the lack of innovation as the culprit for the impending demise of once-popular chains like Macy’s and JC Penney.
Big box stores like Target, Walmart, Best Buy, and cult favorite Costco are seeing steady or improving numbers despite the onslaught of convenience from Amazon. How are these brands managing to keep up?
Target is relying on improved revenue from clothing sales while Walmart has found its boon in grocery receipts. Costco seems to be doing well by luring customers with their free, liberal samples policy. Meanwhile, Amazon continues to barrel along with the perfect mix of every product on the planet and leading the field in automation and efficiency.
Automation and the Customer Experience
The beauty of automation is that its reach goes beyond one facet. Automation has long been in existence in the retail and customer service worlds. There was once a time when doors needed to be opened by pulling on a handle. How did we make entering a store more convenient? By automating them!
Large retailers like Target, Best Buy, Walmart, and Costco have tapped into the variety of segments of automation to help them retain and gain a strong consumer base. Amazon continues to drive the online sector and has led to creative innovations for all the “brick and mortar” brands. Some of those innovations have managed to cross from the fulfillment world into customer service.
Shoppers are frequently benefited by automation without even knowing it. The automatic door opener is an example of tangible automation but there are many things that are less physical going on to improve consumer experiences.
Have you noticed that your local Target seems to have more employees? How can Target be growing revenue while paying for more workers? They aren’t. Automation has freed employees from mundane tasks like counting cash in a back room and put them in customer-facing positions. Customers enjoy rapid replies from chatbots (a form of digital automation) that can provide technical support and give the appearance of no wait time in the dreaded queue.
The bottom line is that automation improves experiences for shoppers and workers. Things are at a tipping point now for retailers. The decision between investing in automation and keeping the status quo will make or break once-reliable brands. Brick and mortar is not dead as evidenced by positive forecasts for Target and the like but the choice remains – evolve or shutter.
Data is King
The drive for obtaining as much data about shoppers, their habits, and what is popular is an important part of why the biggest retailers are pushing forward with automation. Of course, insights into what customers want is a benefit but automation helps use data to improve the bottom line in other ways.
Digital automation combined with the application of robotics in stores has improved inventory management to the point of keeping almost exactly the right amount of stock on the shelf. There is no quicker way to lose a customer than for them to find an empty space where their favorite product should be.
Using data for the purposes of precise inventorying helps in two ways. First, it allows retailers to stock what they need to while avoiding over or understocking. This helps keep money in the companies’ pockets. Secondly, it keeps workers who could be helping customers and improving the overall shopping experience from being bogged down with unnecessary stocking duties. This helps with consumer retention and acquisition by providing exemplary customer service.
Taking data collection and processing a step further, robotic automation has proven immensely beneficial. Walmart has employed robots created by Bossa Nova to roam the aisles scanning the shelves for stock levels. This automation has freed labor to do other tasks like assist customers, keep stores neater, and provide a generally better experience.
Enter the Robot Army
Walmart has always been a harbinger of things to come in the large scale retail industry. While many decry the pushing out of local retailers, Walmart stores have offered unprecedented access to products that some communities might never have had before.
It is no surprise then, that one of the world’s largest brick and mortar retail chains is one of the leaders in automation. Robotics and digital automation are abundant at Walmart and similar brands – from automated self-checkout kiosks to the floor mopping robot called the Auto C.
These retailers insist that the onslaught of robots is a positive thing for workers. The machines will do the mundane, tedious tasks while human workers can go about more fulfilling roles like engaging customers more frequently.
Automation like the Auto C or the Auto S (the robot that scans the shelves for inventory) has already proven itself useful and beneficial to consumer experience and the bottom line. Unfortunately, their human counterparts offer mixed reviews.
Some workers see robotics as an impending doom for jobs. If robots take all the work, what will the humans do for a paycheck? This continues to be refuted by Amazon and other retail brands. First, the technology is still a decade or more away from being able to fulfill an Amazon order on its own, according to Amazon’s Scott Anderson (director of Amazon Robotics Fulfillment). This means human workers are still needed in the sector.
There is also some standard pushback from those who are simply resistant to robotics entering public and professional life. This is likely related to the previously stated concerns and an awkward mesh point of robots that are not quite perfect being deployed amongst humans who tend to expect perfection from technology. Others say that the standards being set by robots in the workplace from an efficiency perspective are leading to the feeling that they cannot keep up with the subsequent demands.
There is some indication that robots and cobots (the human-friendly cousins of robots) might soon be performing the intricate tasks that human arms and hands currently do. A robot called “Blue” is part of the Berkeley Open Robotics program. Blue is outperforming the previous expectations we held for robotics and has been capable of doing intricate tasks like folding towels or using a Keurig-like coffee machine appropriately.
Robots hold some distinct advantages over human workers – no time off, no boredom or being off task, and for now no eyes to roll when given direction by a superior. Retailers who have done well to implement robotics as part of their automation plan are reaping the reward of continued viability while those who insist on staying behind are facing closures and a true reduction in available human jobs.
Large Retailers and Their Use of Automation
The use of automation in the retail sector is undeniably beneficial from multiple angles. Those who have led the way like Amazon and Walmart are seeing growth in revenue, improved customer satisfaction, and have positive forecasts for the future.
Automation continues to grow throughout the retail industry as Wi-Fi connectivity is improved and the technology becomes less expensive. Even small to mid-sized manufacturing shops are able to partner with robotics vendors like Rozum Robotics and gain access to affordable, effective tools to create robots and cobots that will improve their business models.
Large retailers like Amazon, Target, Best Buy, and Walmart all have the resources to spend on automation and they are certainly ahead of the curve in the implementation of automated tools.
Amazon is leading the way with its own robotics development program and the results are astonishing. The recent announcement by Jeff Bezos that Amazon Prime customers would have access to one-day shipping for many products would have seemed impossible just a couple of years ago. It would have taken some Santa and his elves level magic to making that happen in 2015. Yet, here we are.
Amazon has virtually perfected automation and human interaction by streamlining work for its human workers with use of Drive robots. Over 100,000 robots with shelves mounted on top make their way around Amazon fulfillment centers providing the humans (who do the packing tasks) with the products they need.
The improvement in automated technology is palpable with the Amazon Drive models, as they have increased their payload capabilities by 100% (in 2014, the Drive could lift only 750 pounds but is now up to a 1,500-pound capacity). This has led to making one-day shipping a reality for Prime customers.
Amazon also utilizes less flexible automated tools for repetitive tasks like lifting bins and raising pallets to high places.
Walmart is enhancing customer experiences by deploying automation in all the right places. As we have made plain, you cannot simply throw a bunch of robots into a store and call it a day. The smart deployment of resources is the key to the fiscal improvements automation can drive.
By having robots scan shelves or mop floors, employees can be shifted to customer-facing or client-assisting responsibilities. Walmart is also introducing automated conveyor belts to help streamline unloading trucks at its retail stores. This enables employees to get out of the backrooms and perform tasks like filling online orders for in-store pick-up.
Target has improved its automated systems to make workflows more efficient. As self-checkout becomes more popular, the lines waiting to use the kiosks grow. Target has stayed ahead of the game by using automation (cash-counting, for example) to get its employees in a position to help expedite the process. This also improves service at specialty counters like cosmetics and electronics.
Best Buy is experiencing a growth trend simply by introducing automation in its distribution processes. The household electronics giant has streamlined storage, retrieval, and packaging with automated systems. This has brought their bottom line into an ideal position and will get credit for the recent announcement of a project 8% earnings increase and 11.8% improvement of the bottom line.
Best Buy is also leading the way in employee engagement during this automation revolution. It has created a model that dictates the use of its stores as satellite distribution hubs. This has both made online fulfillment more efficient and gives employees a sense of security and necessity.
Automation is Here to Stay
There are certainly naysayers who aim to vilify automation, primarily those working off of misinformation and a dislike for change of any kind. The rapid decline of malls and increase of revenues amongst the largest retailers is a sign that automation is here for the long haul.
While the revolution of automation will change the landscape of retail as we know it, one thing will always ring true – exceptional service wins. As the technology continues to improve, retailers must find ways to incorporate automation effectively while engaging human workers in tasks that bring tangible value to consumers.