Retail is dead, long live retail: Robotics to the rescue

What's in store for physical retail?

When it comes to consumer technology, I consider myself an early adopter. Call me a hypocrite, but I still prefer brick-and-mortar stores to e-commerce. I am supported by statistics. In a consumer survey conducted by Retail Dive in 2017, just 7% of responders said they preferred to shop only online.

Then 2020 arrived, marking the start of the new decade with confetti of coronavirus. As people quickly adapted to fast-emerging trends like 'home-sweet-home', 'low-touch-is-the-new-high-touch', 'six-feet-apart-or-six-feet-under', 'virtual-is-the-new-reality', and 'buy-online-ditch-the-store', e-commerce sky-rocketed, taking us on a time-travel trip 5 years into the future to 2025 with a shameful disregard for Einstein's relativity theory.

As a result, the retail stores found themselves in fear of becoming extinct.

Old retailers never die; they just trade-up to a new world

It’s not in-store vs. online. It’s all retail. Of the top 50 online retailers, nearly all operate stores. Industry-wide, online sales make up 10 percent of all retail sales- National Retailer Federation

I strongly believe the concept of physical retail will never die. Retailers will re-invent themselves not only to stay alive but to come out stronger, leaner, and meaner. The massive transformation that is expected to sweep the retail world will involve, in my opinion, the following two key changes that will result in a nirvana-like experience for the customers:

• The blending of the brick-and-mortar (body) and digital sides (soul) of the business; the best example of this being Alibaba Hema stores in China
• The reinvention of in-store experience involving augmentation of human effort with AI-powered robots to serve the customer better and cheaper

RETAILiate and bot-o-mate!

As part of, what I call, the RETAILiation strategy, retailers will introduce bot-o-mation (a portmanteau of robot and automation) into all aspects of the customer journey inside the store, with the goal of increasing customer satisfaction, conversion, and profitability. It is a perfect win-win proposition for the customers and the retailer. For customers, the increasing presence of helpful robots in stores will translate into hassle-free, personalized shopping experiences leading to higher satisfaction. As for retailers, apart from driving conversion, they can increase their profitability through improved productivity, lower costs, and better inventory management.

Robots will help in achieving those goals across the following aspects of the in-store customer journey

1. Getting customers into the store
2. Keeping customers safe by limiting employees required in store
3. Providing customers a great in-store experience including personalized assistance, engagement, and product availability
4. Ability to check-out with speed

Let us look at how some of the retailers are piloting these initiatives in their stores

Better safe than Saree: To get customers safely into their stores, some garment stores in India have devised an interesting way to greet customers with AI-powered saree-clad humanoid robot ‘Zafira’ that dispenses sanitizer, checks temperature, counts customers entering the store, checks if they maintain safety protocols like social distancing and wearing masks while entering the store.

Spotless: During an era when cleanliness is next to godliness, Walmart introduced 100s of floor scrubbing robots with autonomous navigation and data collection capabilities to keep their floor clean and hygenic

Lowely: To provide a great in-store engagement to their customers, Lowe’s introduced LoweBot, an autonomous retail service robot designed in their San Francisco Bay area store. LoweBot is able to find products in multiple languages and help customers effectively navigate the store. LoweBot can also assist with inventory monitoring in real-time

Let's have a Geek salad: Salad bars have always been the profit puppy for grocers, but they got impacted with the onset of the pandemic. A family-owned regional chain in Ohio named Heinen's Grocery store, which had to shut down their salad bar in March, decided to try something new rather than wait around for local officials to give their okay to resume. They introduced Sally, the salad-slinging robot that serves up preset options like Caesar and Cobb along with custom mixes, all with just a few touches on the machine’s digital screen

A shelf-ish robot that can scan shelves for product availability: Roaming the aisles at Schnucks stores, the Tally robots travel the entire floor two to three times daily and scan about 35,000 products each time, providing Schnucks with accurate, frequent, and comprehensive insights into product flow and operations, improving how products are organized and stocked on shelves to make sure items are placed where customers expect them to be

One-armed gal that helps utilize vertical space and provides unmanned 24x7 service: Best Buy introduced Chloe in 2015 at its Chelsea store in NY. Chloe has a robotic arm built on a chassis that moves among shelves in an area set behind a clear partition. Customers can use touch screens in the store to pick out the merchandise they want. By shelving merchandise vertically, this system opens up about 1,000 sq. ft. of floor space in the store. Also, Best Buy customers don't have to wait for the store to open to make their purchase.

Eyes in the sky: Amazon Go is the first store of its kind where no checkout is required. Customers simply enter the store using the Amazon Go app to browse and take the products they want and then leave. Amazon accomplishes this with an elaborate overhead camera system, which records your every move and every item you put in your orange Amazon bag (no carts!)

It's a start, what does the future hold?

We looked at 7 different examples of how robots are transforming the retail experience, but how many of us have actually seen one of these at a store near us? I suspect, not many. That speaks to the growth potential. In a report that came out pre-Covid, retailers globally were expected to spend over $21.5 billion in the next 4-5 years on automation solutions including US retailers deploying more than 150,000 robots among other automation solutions. But those numbers could look much bigger coming out of 2020. As the retail robotics market evolves, an area that is worth watching closely is what development models retailers end-up adopting, ranging from insourced (like Amazon and Lowe's), outsourced (like the others) to Robotics-as-a-service, a model that will evolve in the future.

Updates since publication

Nov 3, 2020: Fire warning: Believe it or not, just one day after my publishing this article, Walmart decided to fire the shelf scanning robots at their store after they realized their associates were able to do a better job!

Jan 08, 2021: Zapped: Ahold Delhaize USA’s Retail Business Services (RBS) arm is testing ultraviolet disinfection robots in two distribution centers to support stepped-up cleaning procedures during the COVID-19 pandemic

Mar 3, 2021: Candy crush: Here is an interesting robotic use-case that's in the news today, that aims to bring out the kid in each one of us. As every kid worth his lollipop knows (at least intuitively) candies are one of the most impulse-purchased items in a store. Impulse buyers experience more positive emotions such as delight and thus spend more. Moreover, the impulse can strike anytime, anywhere. It's kinda strange that today's merchandising strategy relies on impulse urge striking a customer at designated points (candy shelf, checkout lane, or displays). The confectionery giant Mars leveraged the impulse psychology and current merchandizing gap to pilot a candy-toting autonomous mobile robot at an NY Shoprite, that brings checkout items to shoppers wherever they are in the store.