How Retail Robots in Grocery Stores Reform Operations
Autonomous retail robots in grocery stores. Sounds so futuristic, doesn’t it?
Since the first time they showed up on a trends list back in 2015, experts have predicted that robotics would be the next big thing in the retail industry. With current trials and proof-of-concept projects underway at some of the retail giants nationwide, it’s clear the pace is picking up.
In nearly 20 years, there hasn't been much change in retail, quite frankly. Of course, e-commerce and d-commerce continue to be revolutionary, but when you get down to the physical retail store operations, the work seems all the same for retail workers—scanning barcodes, stocking shelves, paper price tags—just the same way it did two decades ago.
This is proven once again in a recently conducted survey of 312 retail decision-makers on the future of retail technology. In the Jabil survey, 70% of participants said that the e-commerce revolution was just the start and that retail would continue to see major disruptions and innovations—the pandemic accelerated many of these changes in the last 18 months. But with all the transformation retailers have had to go through with this digital landscape, where will the next era of innovation take place?
E-commerce was the appetizer, and now it’s time for the main course: in physical stores, where innovation has been slow (even though 90% of retail revenue is generated there).
The retail sector innovation mindset has been lacking a cohesive strategy. While some of the largest retailers have a clear technology roadmap ahead of them, the more frequent occurrence is a trial-and-error approach. It’s as if the retailers play a round of “loves me, loves me not” with the new robotic technology they see their competitors trying out and don’t truly invest in or trial to see real results. This makes the innovation process very inefficient. Let’s get ahead of this and be proactive.
When discussing autonomous mobile robots, sometimes we are met with skepticism. Retail executives tend to be cautious, which may be because previous attempts to trial new technologies have fallen short of promises. In addition, they tend to be cost-conscious decision makers, looking for pragmatic solutions. In an industry where margins are typically razor thin, there is no other way to be. But store robots could transform physical retail as we know it. How? Let’s examine.
Four Grocery Store Challenges Retail Robots Could Solve
No matter the type—grocery, home improvement, electronics, or otherwise—all retail store teams face similar challenges. When we ask executives what they would do with the added visibility autonomous grocery robot could give them, they mention four areas for improvement.
1. Ease Inventory Management
Retail executives want a better understanding of when items are out of stock. When there is no product on the shelf, that’s when the red lights go off. Therefore it is no surprise that 69% of retailers from the Jabil survey said that they were implementing or considering inventory accuracy systems to improve operations and efficiencies. Fifty-seven percent also were implementing or considering analytics to optimize channel and product inventory management strategies. Inventory and out-of-stock are big issues for grocery retailers.
What technologies is your company implementing or considering to improve operations and efficiencies?
In a grocery retail setting, 8% of the inventory isn't properly placed, priced or is out of stock, which translates to an approximate 4% hit to their revenues. Today, this is accepted in grocery, because there hasn't been a better way to get the data. But an autonomous robot could scan shelves through sensors and cameras to report this data in a consistent matter, so stocks can be replenished, stat. What would be the contribution to the bottom line if product availability improved even by a single percentage with a shelf scanning robot?
2. Guarantee Price Integrity
Price tag accuracy is another common issue amongst retailers. When a customer approaches the cashier ready to purchase and the prices in the POS don’t match the one on shelves, this equates to lost productivity and time, not to mention a negative customer experience.
In addition, if a retailer is running a sales promotion, they need to ensure it is displayed correctly to encourage shoppers to make additional purchases. Again, when there are price integrity issues, retailers are looking at lost revenues.
Besides checking for out of stock items, autonomous robots could also confirm price tag integrity, so the retailer never loses on a revenue opportunity or from providing customer satisfaction.
3. Confirm Product Showcases
Product set up is another challenge for retailers. They spend copious amounts of money in marketing to research and decide how products will be placed within the store. Will they place the skinny jeans on the top shelf and the socks on the bottom one? The key is in planogram compliance.
Planogram compliance ensures retailers can get one step closer to their ultimate goals: increase sales, improve overall profitability and deliver a good retail experience. Shelf allocation has a huge impact on product sales, and if there is no compliance to the plan you made to maximize sales, it can have a major impact on your stores.
This is another area where retail robotics can help. Using computer vision and artificial intelligence, these robots can guarantee there is planogram compliance. A study from the National Association of Retail Marketing Services discloses that retailers who achieve planogram compliance can realize a 7.8% increase in annual sales and an 8.1% lift in profit.
4. Identify Hazardous Conditions
All retailers, but especially grocery stores, pay hefty premiums for insurance coverage, where there are numerous possibilities for hazardous conditions, from slippery floors to products falling off shelves. The most common hazards lead to time-consuming and costly slip-and-fall accidents, which can cost the retailer as much as $7.5 million (or even more) for a single incident, if the retailer is found at fault. Considering that these types of lawsuits have risen by more than 300% since 1980, retailers must take the correct precautions to provide a safe environment for the worker and shopper alike.
Once again, multi-purpose autonomous robots equipped with navigation systems, machine vision and sensors can scan for risks, while moving through store aisles alongside employees and shoppers. These robots can expedite hazard detection through real-time alerts to remove potential risks. In addition, they can track the time it takes to clear up any dangerous conditions. Ultimately, automating hazard detection and reporting can improve audit and compliance operations. Autonomous robots will be there to track your risk management metrics so you can ensure your stores are safe.
Autonomous Robots are Key to Physical Store Analytics
The e-commerce customer data retailers receive leaves them yearning for more analytics within physical stores, especially as an omni-channel strategy takes the driver’s seat. Sixty percent of Jabil’s retail survey participants say they are investing in online and in-store technology as an integrated, omni-channel solution, meaning that they are looking for additional efficiencies in how they operate their business. But how can a real omni-channel strategy function with only half the data? Autonomous robots can solve for that.
Retailers are looking for additional operational efficiencies. But how can a real omni-channel strategy function with only half the data? Autonomous robots can be the solution.
Since these robots are data collectors by nature, they can report on many of the obstacles that stand in the way of better operational efficiencies and customer experiences. From floor inspections to out-of-stock analytics, autonomous robots can contribute to the existing data sets retailers have in their systems of record, filling in the gaps to lead to better decision making. Over time, this data can be used to chart out long-term trends.
For example, it’s no surprise that you have more liquid on the floor during the winter. Autonomous robots can determine where the liquid is collecting, how long it’s there and how quickly it’s taken care of. This data, over time, may reveal that the store managers need to ensure there are more floor mats at the store entrance to prevent liquids from snow or rain to trail into the store, creating a hazardous environment.
This data is what we call “descriptive analytics” that showcase real-time information on what’s happening. But at the end of the day, it’s all operational information that helps retailers run better. Then this information can be translated into higher profitability and less loss. In addition, for a grocery chain, it provides a benchmark and comparison across their stores to determine high- and low-performers.
That’s not all. Since autonomous robots can check for elements like pricing, planogram compliance and out-of-stock, it can provide trend data that reveals forecasting opportunities when a sales promotion is extended by a day or opportunities to improve existing planograms.
Autonomous robots give brick-and-mortar stores the visibility that e-commerce giants get from tracking all their digital platforms. They close the data gap between online and physical stores that allow retailers to get sales velocity, sell-through and so much more.
Autonomous robots give brick-and-mortar stores the visibility that e-commerce giants get from tracking all their digital platforms. They close the data gap between online and physical stores that allow retailers to get sales velocity, sell-through and so much more. It’s the last mile of information that retailers have been missing for quite some time. So, as we demonstrate more consistent and accurate data through autonomous robots turning into better business decisions, I believe retailers will be more willing to give them a try.
Retailers traditionally are risk averse, and incremental change is more the norm for brick-and-mortar companies. Especially when it comes to infrastructure changes, retailers are very hesitant to adopt new technology. After all, why make significant changes to your store layout without proven ROI? That doesn’t settle with the pragmatic retail leaders.
Yet, 98% believe retail companies need to invest in technology that increases their efficiencies and 100% agree that technology innovation is imperative to meet the expectations of today’s shoppers.
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Insights from 306 global retailers on their technology investments, omni-channel strategies, technology implementation experiences and more.