Dive Brief:
- Retailers are racing to automate their stores to cut labor costs, improve front-end efficiency, and become more competitive with data use, according to a report in The New York Times.
- This call-to-action is being spurred, in part, by the opening of Amazon Go, the highly automated stores the online giant has developed and is expanding with six more units, according to Recode.
- Retailers are moving forward with technologies that have been in development for some time. Kroger is rolling out its shelf edge technology, while Walmart is deploying in-store drones and shelf-scanning robots.
Dive Insight:
The need for speed and productivity is driving retailers to develop more and better automated technologies. Companies hope this also will reduce errors and prevent losses, while achieving the ultimate goal of better servicing customers’ wants and desires. But the underlying goal is survival.
Enhanced automation is a double-edged sword. Automation will cut down on labor costs, which likely means a reduction in jobs. More far-reaching and effective data-driven marketing means greater knowledge about the retailer’s customers, but also raises serious privacy concerns.
As their technology evolves, retailers must reassure shoppers about how they are going to use their data and, as much as possible, reinvest that labor savings into improving high-touch customer service.
Walmart is leading U.S. retailers in many areas of technology, including robots that scan aisles for out-of-stocks and measure merchandising productivity.
The battle is intensifying, with e-commerce and mobile commerce evolving and with drones being considered for multiple applications, including package delivery by Amazon and produce field inspections by Walmart.
With their massive capital expenditures budgets, Amazon and Walmart are developing automated technologies that will be out of reach for most retailers. But by carefully weighing the cost and benefit of each advancement, companies and grocers can adopt automated processes that save money and enhance their core proposition of offering good food to shoppers.