Inside Amazon's warehouse1 in
southern New Jersey, U.S., it isn't
uncommon to find giant beetle-like
robots moving around busily with
vertical shelves stacked on them.
The inventories on these shelves are
continually replenished in real-time
by human 'stowers.' Whenever
orders are received, human 'pickers'
pick items off the shelves (using
instructions on computer screens)
and place them in bins that are
carried by another set of robots to
'packers' for dispatch to customers.
Leveraging robotics, Amazon has
successfully automated manual
monotonous tasks across its
warehouses while upgrading the
responsibilities of its workers.
The impact of robotics today is
multi-dimensional with the
integration of digital elements such
as cloud and analytics. According to
Boston Consulting Group (BCG),2
the global robotics market is
estimated to reach USD 87 Billion
by 2025. It is believed that more
than half of this will be allocated
for the retail market. This is not
surprising, since retail has always
been an early adopter of
advanced technology.
Automation is not a new
phenomenon to this industry
and had set in early to create
efficiencies in retail supply chains.
However, now warehouse and
factory automations are being
pursued under pressure to
innovate, especially against the
keen competitive thrusts from
e-commerce retailers that are
heavily investing in robotics.
At Tesco, for example, Radio
Frequency Identification (RFID)
robots are scanning inventories
for entire stores in just an hour
(as against seven hours for a store
employee) with far less errors.
However, retailers are beginning
to realize that innovation must set
in holistically and extend far
beyond just the warehouse or
supply chain.
Robotics Across the Retail Value Chain
From logistics and supply chains to
back-office operations, store
operations, merchandizing, sales
and marketing to customer-facing
experiences, robotics can drive
innovation, and help boost top and
bottom-line outcomes. Online
retailers are developing systems
that are user-individualized for
customers at the front-end and
business users at the back-end.
While it is true that the bulk of
repetitive work is concentrated at
the Enterprise Resource Planning
(ERP) level, retail Chief Information
Officers (CIOs) can infuse robotics
into every stage of the retail value
chain to significantly speed up the
innovation. Welcoming customers,
minimizing negative experiences
in-store, achieving zero-defect
logistics, product picking and
delivery, and customer path
observation and analysis – robots
can play a game-changing role in
each of these areas of operations.
Boosting Productivity in Logistics and Supply Chain
Robotics has already transformed
Distribution Center (DC) operations
with their incredible speed and
accuracy of order picking. Amazon
has stated that its operating
costs have come down by 20
percent.3 C&S Wholesale Grocery
employs robots in its warehouses
to pick orders, and Walmart uses
drones in its warehouses to
monitor out-of-stocks and
accurate slotting.
The new generation of robotics,
automation tools and technologies
have the capabilities to support
zero-defect logistic processes to
achieve new highs in productivity.
The Effi-BOT, for example, is a fully
automated trolley deployed by DHL
Supply solutions. From single- to
multi-order picking, it creates a
more efficient and interactive
process to track complex
inventory movements and
handles pickers' manual work
in the warehouse.
The use of robots in the logistics
and supply chain enables retailers
to achieve sizeable savings from
stock-out shortages and losses, and
shrinkage due to administrative
errors. It also offers retailers the
flexibility to move their sales
personnel to functions that will
drive higher sales.
While drones are currently used to
deliver smaller packages, they may
be used, in the near future, to
deliver larger items of varying
shapes and sizes. This may be one
apt solution that retailers can adopt
to address the challenge of growing
numbers (nearly one-third) of U.S.
haulage drivers who are
approaching retirement age. Robots
can be deployed in small to
medium-sized retail companies too
– costs are not prohibitive across
the board. For example, a Baxter
robot costing around USD 25000 has
in the past sorted plastic products
for over 2000 straight hours.
Pick & Pack
-
Sawyer, the
collaborative robot
from Active8, with its
embedded vision
system, provides
tremendous efficiency
in picking, co-packing
and handling multiple
e-commerce orders
-
Tally, Tory, Scallog and
Stockbot are robots in
the retail industry that
find application in
inventory, stock-taking
and surveillance
Bringing Intelligence to Merchandising and Store Operations
As robots increasingly move from
warehouses to shopfronts,
embedding Artificial Intelligence (AI)
in them will allow retailers to
dramatically transform their
customer interactions. While a basic
sensor-based robot can bring
customers what they are looking for,
an AI-led robot can offer
personalized product
recommendations. The robot's
'advice' is invariably driven by
analytical insights gleaned by
combining data such as customers'
age and location with their
purchase histories.
Pepper, a humanoid robot driven by
AI, is a good example of how the
convergence of AI and robotics can
drive customer engagement and
experience. The robot can be preprogrammed
to chat with
customers, answer their questions
and give directions. The
manufacturer, SoftBank Robotics,
claims that Pepper can also
recognize human emotions. AI also
enables it to use the tone of a
customer's voice to assess whether
they are happy or sad. At a pilot
conducted for Pepper at B8ta in
California, U.S., the tech retail
store witnessed a 70 percent rise
in footfalls.
Robots such as Pepper can use
their robotic arms to pick out
merchandise that customers choose
through touch screens in the store.
They can help retailers save on
store space by shelving
merchandise vertically. Clothing
outlets can also use robots to
quickly fetch items through the
store's mobile app to customers in
dressing rooms. Customers can
order and pay for what they pick up
before leaving the dressing room.
As the digital revolution in retail
gathers steam, robotics, Internet of
Things (IoT), AI and big data are
intersecting to personalize
customers' shopping experiences.
Retailers can use these
technologies to ingest customer
intelligence into in-store and out-ofstore
promotional activities to
optimize product assortments.
Spaced Out: The Robotics Advantage
-
Space management
-
Real-time tracking of
product movement,
stock levels and product
placement
-
Speedy and automatic
scanning of huge store
areas and imaging
products on all shelves
and aisles
-
Accurate and correct
stocking, tagging and
pricing of products
-
Early correction of
errors to minimize
costs, predictive
planning based on past
performance
Strategizing for Enhanced Customer Experiences
The Order & Pay App by Starbucks
is an example of robotic
self-service systems that enhance
customer experience with
pre-orders and payments. Other
aspects are self-checkouts,
self-service scanning and mobile
shopping. Today, organizations are
rethinking the means adopted to
analyze customer behavior for
deriving actionable insights.
Dedicated marketing intelligence
departments today process
humungous data and adopt IoT
components such as 3D sensors
that track customer journeys
in-store. Probabilities and statistics
then create models for in-depth
insights that enable better:
- Connections with end customers
leading to 'wow' experiences
- Automation for efficient and
effective follow-up processes
- Proactive recognition and
correction of customer issues
Sensor features look to analyze
customer count, path-tracking,
behaviors, attention spans and
emotions. The customer scoring
system spots unhappy customers
and uses their feedback to take
corrective actions.
Retailers use augmented or virtual
reality robotics to immerse
consumers in a virtual environment
for a more engaging and enticing
experience. For example, IKEA's
application allows customers to
travel through their catalogs in
augmented reality, virtually
installing furniture in 3D-modeled rooms. Virtual fitting rooms create
customer avatars from their photos
and morphological features — some
also provide customized
recommendations.
An even more exciting innovation
in this area is the development of
robot sensors that recognize
micro-expressions and associate
them with specific individuals.
The recently developed Emovu
software aims to track and analyze
shoppers' emotions and
engagement levels as they go
through a store.
Robotic Customer Touch Points
The innovative applications and
impact of robotics in the retail
industry offer tremendous potential
and opportunity. Welcome robots,
robots that track, monitor and
analyze customer journeys, and
operational robots — such
innovations are bound to provide
significant benefits, both for
customers and retailers.
Robots may have limitations in the
manipulation and demonstration of
complex thinking and reactions that
require a high degree of intuitive or
creative skills. However, these are
innovations for the future with
improvements in AI and deep
learning technology. For now,
however, robotics in retail has
moved to facial and voice recognition
features, enhanced responses,
interpretations and reactions.
Shopper's Assistant
Hointer, a retailer in
Seattle, is a completely
automated store.
Customers can use their
smartphones to scan an
item of clothing (only one
item of each category is
on display) and provide
their choice of size and
color. They can then go to
the fitting rooms where
robots deliver them their
choice of clothing. With
the assistance of the
robots, they can change
sizes and colors. Once
done, they can check out
their purchases using
self-service kiosks.
While robots in retail are still a
novelty, their rising adoption and
evolving sophistication will make
them ubiquitous in the future. For
customers, the increasing
presence of helpful robots in stores
will translate into hassle-free,
personalized shopping
experiences. Retailers can
capitalize on the rise of the robots
to realize improved productivity, cut
costs, enhance customer
experiences and boost profits.
Robotics, when combined with
digital technologies such as
analytics, AI and machine-learning,
has the potential to drive
transformation across the retail
value chain. And that
transformation will materialize
sooner than one thinks.
References:
1. http://www.nytimes.com/2017/09/10/technology/amazon-robots-workers.html
2. http://www.bcg.com/d/press/21june2017-gaining-robotics-advantage-162604
3. www.cmswire.com/customer-experience/how-amazons-robot-army-is-driving-customer-experience/