Article The Automation Revolution in Retail
By Insight UK / 20 Mar 2019
By Insight UK / 20 Mar 2019
Automation is a trend that will impact all industries. Already, repetitive, time-consuming tasks traditionally carried out by humans are accomplished by Artificial Intelligence (AI) algorithms or even robots.
By adopting a computerised approach, it frees up staff to devote time to higher value work that generates more value for the company and can reduce the number of employees required by an organisation. The result is that humans become more productive, and businesses become more efficient.
The retail sector will be disproportionately impacted by this shift. The rise of e-commerce has already enabled widespread data-driven automation, while the in-store experience is already changing through the introduction of technology self-scan checkouts.
According to the Office for National Statistics, 20% of total retail sales are conducted via the Internet. Consumers are flocking online because of the convenience of being able to shop whenever and wherever they are, the wider choice of goods, and in many cases, lower cost.
Automation plays a key role in driving sales. Online retailers have access to vast reservoirs of data that can be used for web-based advertising and to create personalised offers or recommendations. But automation is also improving levels of customer service.
AI Chatbots are commonly used to handle basic customer queries and dispense information.
A lack of physical infrastructure makes online retailers more agile and reduces fixed costs, while the deeper understanding of consumers seemingly gives them an advantage over physical retailers.
But there is no reason why physical retailers can’t compete and embrace these innovations themselves. Many retailers employ omni-channel strategies comprising physical and online elements in order to gain the best of both worlds, while the increased use of technology in-store is helping to narrow the divide.
The most obvious example of automation in physical retail is the self-service checkout and some stores allow customers to place orders online or via a mobile application, then collect them at a convenient time.
Amazon Go is going one step further – eliminating the checkout altogether. Customers simply use an app to enter the store, make their selection, and sensors automatically detect what is taken. Amazon then bills the card stored in a person’s account.
Some retailers are also using Augmented Reality (AR) mirrors that allow customers to see what an outfit looks like on them before making a purchase. And other retailers have embraced ‘shoppable windows’ that allow customers to place orders even when a store is closed.
These technologies offer shoppers the same convenience as online shopping, while offering retailers some of the efficiency gains.
It is thought robots could eventually be used to stock shelves and move goods around, reducing staff costs. This combined with sensors connecting to the Internet of Things (IoT), could make stores easier to manage.
However, it is the ability for automation to narrow the data gap on online rivals that is the most promising aspect. Free Wi-Fi networks and beacon technology are able to identify a customer and track their movements around a store, providing insight into where items should be placed and what targeted offers should be made.
Meanwhile, the use of self-scanning devices and applications gives retailers a real-time view of what customers have placed in their basket. This is a drastic improvement over static loyalty card schemes, from which data can take longer to become useful.
Automation is helping to reinforce the idea of a retail store as a place to learn about products, seek advice and to make repeat visits to. Automation gives organisations greater control and understanding about the customer journey.
This automation of the shop floor will be complemented by advances in supply chain technology, enabling smart warehouses and AI-optimised deliveries. All of which will help retailers increase sales and reduce costs.
Insight’s Digital Innovation solutions help retailers adapt to changing demands and differentiate themselves from the competition through the use of cutting-edge technologies and data-driven processes.
Take a look at ‘The Retail Store of the Future’.