5 ways Robotics & AI is impacting the retail space...

Integrated robotics in retail is nothing new, I remember walking around the Metcash DC in Western Sydney back in 2018 and being amazed by how little warehouse workers were on the floor. At the time, they operated a near "humanless" fulfilment operation, that required only a handful of engineers on call in case of faults or blockages. Robotics have come a long way since then and of course 2023's buzzwords "Artificial Intelligence" is now at the forefront of all conversations within the retail space. I do not think we are too far away from walking into a store, selecting our groceries and walking out, without speaking to a human and having the funds deducted directly from our bank accounts, that is assuming a drone has not airdropped the groceries onto our doorstep already, of course. In many parts of the world stores like the above already exist (look at the Amazon Go stores), albeit they are not super widespread. With all this in mind, it begs the question: What is next for AI and retail? In this article I will run you through the 5 main ways Robotics & AI is impacting the retail space as we close out the first quarter of 2024.

Logistics, Warehousing & Inventory Management

Leading suppliers and retailers have been adopting robotics in their warehouses and DC's for the last ten years; however, new AI powered integrated systems are not only changing the physical appearance of a warehouse but also the talent requirements of these warehouses. Everything is changing from the increased expenditure on energy to decreased costs of labour, robotics pave the way for 24/7 operation, without forking out the overtime and unsociable hours. Accuracy of picks has increased, due to the elimination of human error and this is reducing wastage and delivery times.

Machine learning and AI systems analyse droves of newly available data to eliminate bottle necks, inefficiencies and even route planning for delivery drivers. Automated vehicles are now slowly taking hold of the last mile delivery of product, thus decreasing labour costs, decreasing delivery time and increasing overall efficiencies in the last mile. Uncannily accurate inventory systems are analysing historical data to ensure SKU mix is optimised for seasonality, which reduces waste and storage costs, whilst is decreasing out of stocks and further minimising lost opportunism for sales. It is making a mockery of Toyota Motor Corporation ' famous introduction of Just-In-Time production and inventory management in early 1970's Japan.

Store Operations

The most visible effects to the customer are manifesting themselves in store, these are the most impressive as they in sight and front of mind. They are also the least widely adopted (right now) as there is WAY more at risk with AI interacting directly with the customer. Whilst a trip to Camden, London in 2023 saw me witness fist hand the GO stores from 亚马逊 I have yet to witness much myself in Australia. It is pretty ironic to me that Amazon is at the forefront of bricks and mortar retail tech, given they have made them name putting bricks and mortar retail out of business; however, their GO stores concept is to eliminate human contact from the shopping experience and an automatic bill being applied to your Amazon account.

Another way AI is effecting store operations is with AI powered security systems that aim to eradicate theft from stores, advanced AI systems can track shoppers round stores and monitor the shoppers trying to apply a 5 finger discount. Experts predict the emergence of "Live Pricing" where the price of a product is impacted, in real time, by supply and demand, kid of like a stock market for milk. Who would have thought we may see Apples appreciate on the same day and in the same way that Apple appreciates? There are many problems poised with this and I will be interested to see if this some come to fruition as it is already widespread in the travel sector and has its claws sunk into eCommerce.

Customer Experience

It will be only a matter of time until facial recognition technology maps you and what you buy, pushing products you are likely to buy to the front of eyesight. It also is likely that our main staples and favourites will be waiting for us on arrival at store, leaving only a few minutes to grab an extras, meaning we have more spare time back. Virtual Reality has been in place within warehouses for years, but how far are we from a VR headset within store? Does this mean a bricks and mortar retailer can stock the same number of SKUs as the Amazon website?

Panasonic 's Regi-Robo is pioneering the contactless bagging systems at the end of the check out but is feeling steep competition from MIT's Magic Ball gripper, the suction cup robotic arm that will save most people from their 45 seconds of weekly exercise at the check out.

Online Shopping

Perhaps the most dramatically affected area of retail has been and likely will be eCommerce or Online shopping. Extensively complex algorithms pull masses of personal data from the internet, pushing product advertisements at you so accurate, many people feel that the phone is listening to what we are talking about (I am not one of those people; however, it wouldn't surprise me of they were), I digress. Products are being shoved down our throats, mid-Instagram scroll, with links directly to the page to purchase. Amazon's algorithms are that strong, that I can find myself ordering 4-5 books at one time, when I only logged in to check the price of a Niel Degrasse Tyson publication. AI tools analyse past purchase history to build a detailed and robust customer profile and they even pinpoint the point in which you back out of a potential sale and customize the next offer to avoid that mistake. If companies can maximise their miniscule slice of your time, to only show you things that you want, they can convert that small slice of time, to a big slice of wallet.

Online retail now accounts for just over 20% of sales worldwide according to Shopify and as the highest spenders transition from Baby Boomer's to Gen Zers, one can imagine this figure is only to rise. This poses some potential benefits for both customer and retailer. From a retailer perspective, eCommerce allows easier adoption of AI and algorithms, meaning suppliers can put products costumers wanting front them more frequently, thus increasing sales. The customer can benefit however, mainly from increased visibility on product and service reviews, decreasing the amount of "Cowboys" and increasing overall product and service quality as the bad actors struggle to keep market share.

Home Delivery

How have we got this far without mentioning Drones? Drones are unmanned vehicles that usually travel by air, although their are surface and marine drones out on the market. Any Sci-Fi show or movie typically has a sky full of flying machines and drones buzzing around their airspace; however, rest assured the drones are here and the tech is ready. The main thing holding back the mass adoption of drones and other automated vehicles is legislation, governments around the world are scrambling to put in robust legislation and rules around autonomous vehicles and drones, this is mainly around liability, who can be held accountable if things go wrong?

Home delivery pulls together a number of the above points and ultimately effects the customer with increased convenience and at times a lower price, that is if the supplier has passed on the cost saving received from labour, on to the customer.

Conclusion

Overall, the retail industry is being impacted from all angles from robotics and AI; however, a lot of the effects are the same, just in different areas of the Industry. Efficiency improvements, cost savings, increased accuracy and better customer experience are the knock on effects of robotics and AI in the retail space.

What is next for retail?

My prediction is that over the next 5-10 years 90% of cognitive effort will be completely removed from the buying process... Staples and favourites will be automatically ordered on a daily, weekly and monthly basis and any products that require thought, will be pushed into your face based of previous purchases. In addition to this, 90% of the physical effort will be removed, grocery baggage robots, till to car transport will carry your bags (and maybe you) and your self driving car will take you home. Mini DC's around the world will hold products and drones will drop the aforementioned staples right to your doorstep, where you robotic AI powered dog will tear your holographic newspaper to pieces as soon as the robots drops it through your letterbox!