From floor cleaning to inventory management and data analytics, robots are becoming indispensable to retailers for enhancing efficiency in an increasingly competitive market. According to Coherent Market Insights, the retail robots market is expected to grow from $7 billion to $55 billion by 2028. However, even as major players such as Walmart, Amazon, and Target integrate robotics into their daily operations, some retailers remain skeptical, driven by concerns surrounding job displacement and removal of personality and human interaction customers still look for in store.
Profit protectors
One of the primary drivers behind the adoption of robotics in retail is the unparalleled efficiency and accuracy they offer. Robots can be programmed to collect and perform real-time data analytics, performing tasks in minutes that would take humans months to complete. These analytics play a significant role in inventory management, enabling consistently stocked shelves, and ensuring customers always find their preferred products.
Out-of-stock items cause retailers losses of approximately $453 billion annually and dramatically erode customer loyalty. A recent survey conducted by IPSOS showed "almost one in five households with children changed where they buy groceries" due to products being out of stock.
Out-of-stock items are not the sole perpetrator behind profit losses. Retailers lose around $362 billion a year due to overstocking. According to McKinsey, in 2022 "retailer inventories rose by $78 billion" causing some retailers' stock prices to fall due to the inevitable reductions that would follow due to overstock. Robots help support the delicate balance of maintaining inventory, helping retailers avoid profit losses and customer dissatisfaction.
A collaborative approach
With worker shortages having been rampant across multiple industries and robots having proven to be practical and productive additions within workplaces, the conversation around robots leading to displacement has shifted. Many now understand that, in order to properly future proof operations, the objective is not to replace humans with robots, but to have them function as supportive assistants.
Many retailers now leverage robots to relieve employees from mundane tasks, enhancing workplace safety and overall job satisfaction. For instance, robots handle tasks such as inventory management, floor cleaning, and warehouse transport. In 2023, according to Brain Corp data, almost 2 million working hours have been given back to retail staff as a result of the robot fleet, with 25 billion square feet of retail space covered autonomously (a 16% year-on-year growth). The strategic use of automation allows human workers to focus on more engaging activities, such as customer interaction, ultimately improving working conditions and fostering better employee experiences.
Customer service allies
Shoppers, who enjoy the social dimension to their brick-and-mortar shopping experience, are unlikely to have that disrupted by an all-robotic workforce anytime soon. Retailers who are currently seeing the most success with robot deployments are typically using them within their stores but for non direct customer-facing tasks, such as cleaning, inventory scanning or transportation. Robots are also making their presence felt behind the scenes within the online shopping arena. For example, fashion retailer Zara is using robots to speed up its omnichannel shopping system. Customers who use the store's click-and-collect option can simply enter their collection code at an in-store check point and have an AI-powered robot swiftly retrieve their product, saving them long wait times.
The incorporation of robots into routine tasks reinforces the personal touch in retail. By automating mundane responsibilities, human employees are afforded more time to interact meaningfully with customers, ensuring a personalized shopping experience and fostering heightened customer satisfaction.
Strategy for success
The integration of robotics into the retail sector reflects an innovative trend reshaping industry dynamics. Major retailers are investing like never before in automation for tasks ranging from inventory management to floor cleaning to stock delivery.
Rather than threatening jobs, robots are more than ever serving as supportive assistants, freeing human employees from monotonous tasks and enabling them to focus on more engaging activities, ultimately fostering a far more positive work environment. Embracing robotics is not just a technological evolution but a strategic imperative for retailers aiming to thrive in the ever-more competitive retail landscape.