Five ways automation will impact grocery retail: The race is on
Source: Bill Bishop @ brickmeetsclick.com
There is much debate about how grocery retailing will evolve over the next 5-10 years – and how much shopper behavior will actually change as a result of online grocery – but it’s safe to say that leveraging automation will be one of the ways brick and mortar supermarkets evolve their models to remain viable and profitable. Machines of all shapes and sizes will do at least some of the repetitive work previously executed by people in grocery.
Some of this automation will be relatively simple, like Mini Choice Market’s vending machines for fresh and packaged products; other applications will use artificial intelligence/machine learning to maintain and interpret store conditions, like Marty the robot and xNorAI’s shelf monitoring systems; still other applications like robotic picking systems will impact more than the task they were originally designed for (online order pick rate efficiencies, in this case).
Automation's impact
Here are five forecasts about automation’s impact on the process of buying and selling food/groceries that can help all of us – retailers, product suppliers, and tech providers – begin to imagine and ultimately create the future.
#1: Leveraging automation will be the primary way in which supermarkets remain competitive. They’ll do this by increasing productivity in three areas of the business.
Labor – Reducing the number of hours worked to produce the same volume of sales.
Inventory - Giving the retailer the tools to replenish stores with individual items versus case quantities.
Space - Enabling dynamic adjustments of display space that align more closely with sales patterns within the week and even by day.
#2: Automation will attract a more educated and/or engaged and productive workforce to food retailing.
Increased automation will change the perception of the supermarket, making it into a “more desirable” place to work.
Grocery retailers have already begun to raise salaries to attract and retain higher quality employees. Soon there will be a similar increase in their efforts to make their companies “a better place to work” through such actions as
Shifting from part-time to full-time employment
Increasing professional and skill-focused on-the-job training
#3: Automated order selection systems will replace/reduce "self-service" retailing as they improve the efficiency of order fulfillment.
Auto fulfillment systems not only eliminate the need for humans to fulfill orders from the aisles, they eliminate the need for in-store shoppers to go up and down the aisles in search of specific shelf-stable items.
Shoppers place an order for the center store items in one of two ways – in-store or ahead of time via the mobile app. Either way, their order is ready for pick-up at the store and they still have ability to shop the store’s perimeter departments themselves.
Waiting in the checkout line is one of the greatest frustrations of in-store grocery shopping, and if the items in the pick-up order are already assembled and totaled, then check out is much faster.
#4: Longer term, a big impact of automation will be to improve the grocery shopping experience by allowing the customer to enjoy their own personalized version of the store with curated items that fit their needs and priorities.
Two technologies – augmented reality and virtual reality – are available today and getting better every year. The evolution of these “synthetic” realities opens the way to deliver what looks and feels like a traditional in-store shopping experience any place and any time.
This enhanced online shopping experience, combined with the ability to customize the product assortment to individual/household preferences and optimize search/navigation capabilities, will change the face of food retailing.
#5: In the true spirit of disruption, the game-changing power of automation will be fully realized only when technical breakthroughs drive significantly lower retail costs.
Repurposing current technology is easy enough, so many retailers will choose that path and forego the opportunity to create sustainable, competitive advantage.
Significant retail cost reduction will justify the greater investment in automation, but only some competitors will invest in the new way of doing business, others won’t be able to step up.
The race is on
For two compelling reasons, now is the time to start evaluating and testing the different types of automation that will help a grocer strengthen its competitive position and value proposition.
Competitive pressure: Some grocers and food retailers have already moved past testing to rolling out different types of automation, and it looks like there’s plenty more activity like this and automation development in the pipeline.
Time pressure: Even some of the basic forms of automation will take time to integrate into the business model, so beginning today just makes sense.
Returning to the predictions above – this isn’t about automation for automation’s sake, it’s about remaining competitive, increasing productivity, valuing your employees, and giving your customers the products and shopping experiences they want.
