Robots Take Retail

The robots are coming! It sounds like a tagline for a science fiction film, but we need only look as far as the retail industry to see the truth in this statement. Robots have been with us for a while in retail, and technology powered through AI and machine learning to incorporate the voice of the customer to transform how retailers make product and pricing decisions is something I’ve been advocating for years. Amazon and many retailers are operating robots behind the scenes to help with inventory management. Walmart is building its robot army as well, and according to this ABI Research release, the company deployed 350 systems for inventory management across its stores in 2019 alone. That’s an average of roughly one robot for each store.

As retailers look to trim costs and streamline operations, particularly along the supply chain, robots are only going to become more entrenched in retail’s day-to-day operations, taking on greater roles and interacting with employees and consumers alike as AI becomes smarter. By 2025, more than 150,000 mobile robots will be deployed in brick-and-mortar retail establishments, according to an estimation by ABI Research. And robots’ work will certainly not be limited to warehouses.

A New Breed of Robot

The newest models of robots are already getting upgrades, and are coming equipped with machine vision algorithms able to capture and analyze images and video and respond accordingly. New technology is enabling them to analyze and interpret unclean areas and clean by themselves, understand when customers enter the store and greet them, and take photos of new cartons, analyzing items in the box and moving them to the right shelves.

At Walmart in particular, scanner robots are able to pinpoint locations where items are out-of-stock, send images to associates who use handheld devices, and also transmit that information to the fast unloader robots that are prioritizing which items get unloaded off trucks. The theory  is that when working in conjunction, robots make store associates more productive. Kroger plans to build as many as 20 automated grocery warehouses across the US where robots will help fulfill orders placed online. The company is also testing driverless robot delivery cars. Hundreds of stores by Giant Food Stores and Stop & Shop have deployed a pillar-shaped robot named Marty who travels the aisles looking for spills and runs price checks.

The plan is for robots to take over the mundane tasks and leave human employees open to doing more high-value jobs, like customer service. For example, instead of spending time finding items on store shelves, employees could interact with customers to teach them about new products and, ideally, boost sales.

Walmart spokesman Ragan Dickens told Digiday, “We don’t have any associates that just scan shelves; it’s a piece of what they do,” he said. “[Robots] reduce the amount of time they’re spending on repetitive, mundane work, and they can work with customers.”

Robot Ripple Effect

We can see the ripple effect of the robots by looking at Amazon, which has already been replacing low-skill warehouse workers with robots. Last spring, when Amazon announced new machines in several of its US warehouses that scan and box items to be sent to customers, it meant replacing at least 24 jobs at each location where they were installed, according to Reuters. If installed in all of Amazon's 55 US fulfillment centers, they could replace more than 1,300 employees, according to the article. Business Insider surmised that “Amazon's broader warehouse robotics usage could be part of a larger push to shift its logistics workforce out of the warehouse and into the last mile,” and referenced the company’s separate announcement that it would pay workers up to $10,000 each to quit their jobs and set up their own delivery businesses as part of its Delivery Service Partners program.

The idea is seeing tremendous traction already. Since it was announced June 28 of last year, tens of thousands of people have applied to the program and Amazon has put in an order for 20,000 Mercedes-Benz vans from German automaker Daimler, according to The Wall Street Journal. This is likely creating “openings” where even more robots can be backfilled.

According to Oliver Chen, Managing Director and senior equity research analyst covering retail and luxury goods at Cowen and Company, robots are well placed at the intersection of physical and digital, particularly with regards to curbside pickup. “In-store autonomous robots are new, and so scaling them accurately is a challenge. As curbside pickup becomes more popular, we have to figure out how to manage the volume in the store.” He goes on to note in his recent interview with RetailNext that with fully automated dispensaries, you don’t even need a person to bring out the groceries for pickup.”

My Robot Teammate

The reality of working side-by-side with robots may feel a little far-fetched to some in the industry, but it’s worth asking how human employees might react particularly as robots move toward more interpersonal relationships through AI.

A few years ago, researchers in Germany explored how people feel about having robots for colleagues, according to an article in Forbes. More than 60 percent of respondents said they could easily imagine being supported by a robotic colleague, with 21 percent even suggesting such a change would be an improvement, with this largely due to the belief that a robot would be less error prone and more predictable in its behavior.

But what about a robot boss? Here, too, we found some surprising results. The October 2019 Oracle and Future Workplace report surveyed more than 8,000 employees, managers, and human resources leaders from across 10 countries on AI and robots in the workplace.

According to the study in TechCrunch, while many employees noted they once feared AI would eliminate their jobs, once they realized AI (and robots) could actually help them conduct work more efficiently, their attitudes changed.

The number of employees using AI at work increased by nearly 20 percent over the past year, from 32 percent to 50 percent. And the study found that 64 percent of employees surveyed said they trust a robot more than their manager, with half turning to a robot instead of a supervisor for advice, as they felt that technology could better provide unbiased information (26 percent), maintain work schedules (34 percent), problem solve (29 percent), and manage a budget (26 percent).

Robots are even making their way into the hearts of employee workplaces. Take a look at this great story by BBC which highlights how people are developing a soft spot for robot colleagues, and holding ceremonies when they retire or are taken out of commission. 

The Robot Store Associate

At the end of the day, however, like everything in retail, new technologies won’t fly without customer buy-in, and that goes for robots on the showroom floor too. Customers who are having their first interactions with robots are still a little lukewarm on the idea overall. Let’s face it, consumers can be slow on the uptake with new technologies, such as mobile payments which are still only eking out traction every year. Even chatbots, virtual robots that answer questions in an automated way online, are not a fan favorite. 

According to Fast Company, 95 percent of consumers don’t want to talk to a robot when they are shopping, neither online nor in brick-and-mortar stores. And 66 percent of consumers find that chatbots are more damaging than helpful to the shopping experience. There was no reference to generation breakdown on this, so it’s hard to know exactly who was responding in this way, but with the rising Generation Z and the tech-savvy Millennials driving consumer demand these days, we should probably drill down further.

This research report found that Generation Z named robots as new technologies they’d like to see in retail, particularly for delivery and in-store assistance. The “Generation Z as Future Customers, 2027” report agrees, and notes Gen Z customers will be more comfortable with the idea of autonomous technologies and robots, given that they are the first generation to be born in the Internet and technology era.

Tim Brady, Manager of Deployment and Strategic Initiatives at Giant Food Stores believes starting to integrate robots now will better align him with the next generation of shopper when the time comes. “We don’t want to put [robots] in place just because it’s a robot. It has to provide benefit. As customers change, like Millennials and Generation Z, they want to see more technology, more kiosks, more tablets, more self-checkout, that kind of thing, so if we don’t leverage the technology that is out there now we’ll become irrelevant,” he told Grocery Dive. 

Wrangling the Robots

As AI becomes more sophisticated, it’s likely that very soon retailers will have to navigate regulations on how robots are and can be used. And this may slow how the retail industry is able to innovate using AI and robot technology.

Chris Harlow, Director of Product Development at Realtime Robotics, predicts that "In the 2020s, the artificial intelligence and machine learning technology landscape will move from the 'Wild West' where almost anything goes to a more controlled regulatory environment. The introduction of mandatory legislation will inevitably slow down the pace of progress, and this will impact robotic automation. For example, AI and ML algorithms will face safety regulations, and this will hamper the speed of development of vision systems that are the key to AVs [autonomous vehicles] along with industrial robots taking on more complex tasks such as kitting or parcel sorting."

For those of us who have watched too many Terminator movies, the evolution of AI and robotics into everyday lives may feel like early days of an impending apocalypse. But let’s not get ahead of ourselves. Robots are bringing efficiency and creating opportunities for their human counterparts to have more meaningful work that exercises humanity’s best skills – like drive, creativity and interpersonal relationships. And as consumer expectations continue to shift toward technology-driven experiences, retail has no real choice but to rise up to meet them. At least for now.