AI and Automation Are Coming to Retail. How Are Stores Adjusting?

The retail experience is evolving. The store of the future may look much different than what shoppers normally encounter. All of this will be made possible with automation and artificial intelligence (AI). With almost every retailer in the country feeling the pressure of Amazon and its market share, retailers now have to compete with the ecommerce giant’s physical store, Amazon Go, which needs no employees and uses cameras and sensors to charge customers with a card on file. The first one was opened in Seattle in January with future stores to open in Chicago and San Francisco. With tech companies seeking to roll-out powerful automation tools for retailers, how will they be used, and will it sway shoppers?

Automation Is a Clear Preference

The benefits of automation are already seen on a smaller scale with self-checkout. While there is a considerable up-front investment for retailers, they can benefit from less reliance on physical labor and customers overwhelming like the choice. A study by the NPD Group for NCR Corporation determined that majority of U.S. consumers believe self-checkout and kiosks improve the store experience. It also found that two out of three consumers want self-service options, with the majority of those wanting this falling in the under 45 age groups.[1]

Automation at checkout is now even easier with a smartphone. Customers do not need to get in line at Wal-Mart or Kroger, as many items can be scanned with an app and paid for there.

Most retailers will not highlight the fact that less labor is needed. John Creculis, vice president of central operations at Wal-Mart said to the New York Times, “We see this as helping our associates. We are a people-led business that is technology enabled.”[2]

Beyond the Checkout

Automating the checkout is only one application. Retailers can obtain assistance from other forms of technology as well. Robots could soon be stocking shelves while smart devices could signal that a product is out of stock or is nearing expiration. This makes process of inventory tracking easier and provides data to store managers. This type of monitoring could help with the frustration shoppers have when stores do not have what they need. This is an important, yet often forgotten part of the in-store experience. Shoppers, especially in the U.S., expect a store to always be in-stock. If stores continue to have inventory issues, these shoppers will move on.

POS Opportunities

Consider this example of the point-of-sale (POS) system. A store cannot function without it. If products do not scan or do so incorrectly, it makes for longer lines and complaints. Intelligent automation could detect a POS issue and repair it without staff intervention. So, customers aren’t inconvenienced.

Automation as Customer Service

Lowe’s, the home improvement chain, has been testing what they call the LowesBot, a robot that helps shoppers find what they need. It uses natural-language processing to understand customers. They simply follow it and no longer have to spend time hunting down an employee on the floor. It comes equipped with a 3-D scanner and a touchscreen for interaction. [3] Kyle Nel, executive director of Lowe’s Innovation Labs, said of the bots, “This is a response to things people wanted since retail began, but up until now there just wasn’t the technology to be able to make that happen.”

Automation and Drive-Up Trends Merge

Stores may also find value in merging automation and a big trend in retail, drive-up. Target and many other retailers offer buyers the opportunity to order online and pick up at brick-and-mortar locations without getting out of their car. As it stands now, this model needs labor. The store gets an order, then a worker must go find all the items and bag them. When the customer arrives, that worker then needs to take the cart out to the car and pack it.

It is very convenient for shoppers but a labor drain for stores. Automating this process would allow stores to keep aisles occupied with workers and streamline the pick up routine for customers.

When thinking about how retail will evolve, it’s clear that automation and AI are and will be the catalysts for change. The in-store shopping experience is not dead, it just needs to change to meet customers needs and preferences. It’s an exciting time for retailers, however, they need to capitalize on automation, not ignore it.

[1] https://www.ncr.com/news/newsroom/news-releases/retail/self-service-survey-us

[2] https://www.nytimes.com/2018/04/01/technology/retailer-stores-automation-amazon.html

[3] http://www.cnbc.com/2016/08/30/lowes-introduces-lowebot-a-new-autonomous-in-store-robot.html