Automation: How Much, How Fast?
A RetailWire article took on the pace of automation in retail, with RetailWire Braintrust panelist, Carol Spieckerman, weighing in.
Technological automation continues to stoke enthusiasm among advocates and fears among detractors, with the former seeing unprecedented new ways to streamline operations and the latter concerned about the potentially devastating impact on the job market. Retail has already witnessed some major forms of automation implemented at scale, and a major player in the segment recently laid out a tight timeline along which people should expect more.
Mark Shirley, head of logistics at Primark, told Reuters late last year that the percentage of automation within the retail industry could jump to between 60 percent and 65 percent within the next three to four years. He approximated the current amount of automation in the retail sector as resting at about 40 percent.
The Reuters article, released in conjunction with the World Economic Forum, pointed to a tight labor market, rising wages and reduced customer spending as the factors pressuring retailers to automate at a faster rate. Robotic automation has already gained a foothold in areas as disparate as store cleaning, warehouse management, supply chain logistics, food ordering and grocery checkout.
Not all automated solutions, however, are proving to be popular with customers or profitable for retailers.
For instance in February, Amazon announced that its Amazon Fresh grocery chain, which uses Just Walk Out technology to do away with the checkout process, would delay the opening of new stores as the tech company seeks a way for the grocer to differentiate itself in the marketplace.
And in foodservice, McDonald’s AI-based voice ordering system recently started getting slammed on TikTok, according to a Business Insider article. TikTok videos show how customers attempting to order from the AI at the drive through become frustrated and amused as the voice bot continually fails to take their orders correctly.
Even some in logistics have warned about the potential risks of retailers investing in trendy, expensive automated solutions. Dan Myers, UK and Ireland managing director of freight firm XPO Logistics, told Reuters that,“there is always a trade off between the agility and flexibility of a human approach versus the efficiency of an automated approach.”
Carol Spieckerman’s RetailWire weigh-in:
Although media clickbait might suggest otherwise, the transitions between now and next generally last longer than expected. That doesn’t mean retail work isn’t shifting toward automation, though consumer backlash is a real threat. Some shoppers resent automated solutions, thinking they are paying the same or even more for less service. Others don’t like the idea of automation taking jobs away from their kids. Retailers will need to offer options across the spectrum from high touch to high tech for the foreseeable future or risk alienating shoppers. In the meantime, Amazon has the right idea by creating dedicated formats that directly appeal to automation-friendly shoppers.
