Retail Customer Experience: Witron system aims to fully automate shelf replenishment

The likelihood of success is small, but not because of technical issues. How can this possibly pay out versus a $10/hour stock clerk?

And we've seen in this forum that what aggravates shoppers the most is long check-out lines, not a stock clerk in the aisle.

Dr. Stephen Needel, Managing Partner, Advanced Simulations

It will all boil down to ROI. But the odds of this happening in the next 10 years is slim to none for two main reasons: 1. The complexities of the system and the amount of space it is going to take to accommodate the hardware. 2. With over 40 other places that retailers can be spending money to improve customer service and operations effectiveness, I do not even see this anywhere on the radar screen.

Mel Kleiman, President, Humetrics

I love gadgets and new technology but I have to tell you, this system gets a collective meh. I need the creativity of my people when merchandising. Even if it's to plan-o-gram, I like the human touch when it comes to filling. Is this thing going to make sure my signs are up? So if I need a person for dog food and signs and promo endcaps, I'll just have them do the rest of the filling as well. Why spend hundreds of thousands of dollars on a system that only does a quarter of the job? Neat idea but I'm not throwing out my box cutters anytime soon.

Doron Levy, President, TheMortgageMachine.ca

Every retailer is taught early in their career that you "can't sell from an empty wagon"--a very old way of saying that out of stocks (OOS) are sales killers. That being a given, the question is how best to address the problem.

I have watched and been very impressed with automated systems in warehouses, however, I foresee several issues with deployment of a SRS system to retail. First, the article assumes that the product is at the location, something we all know is not always the case. Supply chain problems do still occur and OOS can happen at other levels along the way.

Second, we have worked with retailers with automated stores or stores in a box, and technology doesn't always work as it is supposed to. This then requires specialized support team. Third, conveyor systems take space and not all shelving is along a wall so by implication, the shelving would have to get wider to accommodate them and/or the holding capacity if the shelf decreasing (requiring more restocking). This in turn could mean a larger store footprint and/or less SKUs being carried. Finally, the question is the relative all in expense of the technology versus the cost of employing more people. Great concept, but I foresee limited application at retail.

Steve Montgomery, President, b2b Solutions, LLC

Now, isn't that silly?

Wouldn't we be better served by getting accurate store inventory direct from the shelf, (and back room), and then letting the merchants and their replenishment systems make the decisions?

Paula Rosenblum, Managing Partner, RSR Research

Here's another example of the engineers thinking they are businessmen. Good intent, good technology, bad ROI. The added space behind the shelf would take away too much selling space. This will go the way of RFID in grocery.

'MrQScan'

You know where this technology might make a lot of sense is in flow rack or individual pick operations for customer fulfillment orders. As more and more retailers go to offering delivery services, the ability to keep a flow rack or customer pick area stocked with individual units for selection becomes a challenge. This system might be able to address the issues.

As far as the general store environment, I agree with the other comments in the original article that point to the merchandising and product variation concerns.

Bill Bittner, Principal, BWH Consulting

This is priceless. I could sell tickets to the aisle for entertainment as the system loses it for unexpected technical reasons and the thing starts pitching drink boxes at shoppers heads as they walk by.

Oh please. Why not go all the way and get robots to live between the gondolas? Or train the mice we all know are probably there?

It's been years since I saw a detailed metric study on this but stock outs are one part service issues to the warehouse, one part ordering problems at the buyer's desk, one part pick errors, one part store level ordering mistake, one part inventory lost in the back room, one part error by the stock crew itself, and on and on....

Way better to actually train and teach people to do their job well and still stay responsive to shoppers. I never saw a consumer walk swearing out of an aisle where a store clerk was trying to help them, but have seen plenty leave the store in disgust because the empty shelves were easily matched by low levels of employee service.

Hire enough people and train them and motivate them. It is pretty easy to prove this pays off (sales per square foot is directly proportional to the number of employees in the space).

Robots and conveyor belts are just a way to tell people you'd rather not talk to them.

John Rand, Senior Vice President, Kantar Retail

John Lert has a much better system that will actually work while meeting all of the concerns expressed in earlier comments. His is a revolutionary design whose time has come. Do yourself a favor and contact John at Alert Innovation: info@alertinnovation.com, 857.526.6551 (Quincy, MA).

M. Jericho Banks PhD, President, CEO, Forensic Marketing LLC

Yikes! The cost would be incredible. And the ROI would be impossible. I have a friend who says that poor systems create more systems.

Better idea is to get better visibility and collaboration through the supply chain to reduce out of stocks at DCs and at store level. If losing control of stock in the back room is a problem, there are more efficient ways of fixing it.

Stuart Silverman, Publisher, Retail Technology Milestones

One of my favorite business oxymorons is "brilliant failure" and I'm pretty certain the Witron system qualifies. Brilliant, because the physics, mechanism and software behind this in-store conveyor system seem awe-inspiring. Failure, because unfortunately, this complex (and no doubt costly) solution posits the wrong problem.

Out-of-stocks are just one glaring set of evidence of our systemic flaws in Merchandising Performance Management. Logistics-oriented systems that put a prettier interface on pushing replenishment tasks out to the shelf still fail to address the foundational need for measurement and feedback.

We should also mention that a conveyorized shelf system of this type would require a flawless database of shelf schematics (almost unheard of). And a flawless database of product dimension data (reasonably available). And a whole new set of backroom processes (not invented yet).

I'll stop here, but I want the folks at Witron to know that I wouldn't go on like this if their system wasn't so imaginative and clever. It won't likely work, but I still admire the attempt.

James Tenser, Principal, VSN Strategies

The automat concept worked well in the 30s, but much has changed. First, there is the cost of automation. Keep in mind one can never repay the automation capital investment with slow moving items and 95% of the items are slow movers. They simply don't create sufficient savings to pay for the equipment.

The real factor that will kill this concept is the cost of retail space. At $100 plus per foot, who wants to reduce retail space for equipment? The labor savings will never justify.

W. Frank Dell II, CMC, President, Dellmart & Company

It's really hard to see how an automated system like this could pass the ROI test, especially if we're talking about removing fixtures to make room for behind-the-shelf equipment. Still, never say never....

Ted Hurlbut, Principal, Hurlbut & Associates

American labor rates are notoriously low, but German labor rates (even during today's weak economy) are much higher. The Witron system might pay off for retail chains in high labor-cost countries...but there aren't many places fitting that description.

Mark Lilien, Consultant, Retail Technology Group