Robots are not the answer to store challenges

Discussion
Photo: Getty Images
Jan 29, 2018
Nikki Baird

Through a special arrangement, what follows is a summary of an article from Retail Paradox, RSR Research’s weekly analysis on emerging issues facing retailers, presented here for discussion.

I love robots. In my spare time, I coach a high school robotics team. Robots are what will get us to Mars and on asteroids and inside volcanoes and to the depths of the ocean. They have an important place in industry too, accomplishing repetitive tasks with a high degree of precision and consistency.

But why do I keep hearing all these pronouncements about how robots are going to revolutionize the retail store – save it, even? Even before Amazon.com opened up its Go store and all the proclamations at NRF, lots of predictions heralded the rise of retail robots in stores.

Yes, you get rid of cashiers and a couple of staff who used to run the in-store order pickup desk. But don’t you have to replace them with the team monitoring the fulfillment robot? And the cashier-less stations? Don’t you need a few people nearby to troubleshoot, maintain and fix all this tech in stores? And don’t you also need to provide more front-end assistance – to help educate customers or provide service or assistance in understanding product options and selection?

I also can’t see a future for stores where higher-skilled “sales” people and customer service people are not part of the equation – otherwise, why bother at all?

Robots in stores, to me, seems like a proposition that completely devalues what the store has to offer – an experience. A sense of community. Entertainment. Education. Service. Engagement. I just don’t see how robots make that possible – unless you talk about robots in the context of a new staffing and service model for stores, one that replaces low-skill, low-pay jobs with yes, fewer, but also higher-skill, higher-pay jobs. And I still don’t see how that ultimately nets an ROI, not when you just end up shifting the money you saved on labor into automation maintenance, even before you start investing in higher-skilled workers.

Is it just a fascination with “the future” that keeps people going on about robots in retail? Has anyone really thought this through, from a total net impact on the business perspective? Because as much as I love robots, I just don’t get it in retail.

DISCUSSION QUESTIONS: Do you agree that the current fascination over robots transforming retail is a bit irrational? Have you become more confident or concerned over the last year about the potential benefits of automation on retail selling floors?

Braintrust
"While robots will play much more of a role in retail, all this talk of them replacing humans in stores is overcooked."
"The path to success in retail is human, with a healthy dose of tech –not the other way around."
"Unless robots will come into the stores and start buying merchandise they will not “save retail.”"

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28 Comments on "Robots are not the answer to store challenges"


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Mark Ryski
BrainTrust

I agree with Nikki. While the promise of robot-supported retail has appeal, I think the practical realities make it a very long-term proposition. Like all the coverage we read about Amazon Go — the fact that it would take a small fortune to set up and even more to maintain gets lost in the excitement. While I do believe that automation will make its way to the selling floor, it’s many years if not decades away.

Peter Luff
BrainTrust

I totally agree with you, Mark and Nikki. My instinct is that this is a gimmick, though it is perhaps initially a bit of fun on the store floor and it may even create some great PR for that first project (which may be your ROI for that project). Ultimately the flexibility of the systems are pretty limited, especially when counted against the cost of continually adapting the robot for the ever-changing needs of front-of-house retail.

I am not saying never, but anyone investing now is likely sinking costs into a large industry development pot that they may not see immediate returns on. There are some way better areas to invest in — for instance staff, perhaps.

Neil Saunders
BrainTrust

I completely agree!

While robots will play much more of a role in retail, all this talk of them replacing humans in stores is overcooked. It’s a classic example of thinking about what technology can or might do, rather than about what we want it to and what it will be good at doing.

The fact that human shoppers actually like to engage with other humans in stores, including human staff, suggests to me that the role of robots may well be quite limited — at least in that sphere of retail.

Anne Howe
BrainTrust

To me, robots can be more useful than humans in experience settings with low interaction expectations. For instance, in large stores where a shopper can ask in what aisle “widget A” is stocked. But to expect that robot to have a useful conversation about how to install “widget A” in your broken toilet is not very helpful to a shopper.

Ben Ball
BrainTrust

“Robots in stores, to me, seems like a proposition that completely devalues what the store has to offer – an experience.”

If the store did any of those things I would agree wholeheartedly. Unfortunately, 99.9 percent do not. Our future consists of us making 50 percent of our purchases online and another 25 percent+ coming from various forms of “automated merchandisers” — with the Amazon Go store representing the (current) peak of that technology. There will still be stores with knowledgeable sales associates to help with suitability and selection. But they will be limited to the items that truly require it and for those who don’t have the knowledge to make their own optimal selection. Think electronics, sporting goods and financial products.

Shep Hyken
BrainTrust

We are far from a “tipping point” at which robots in stores become the norm. Some retailers are experimenting with them. This year at the CES show in Las Vegas, robots were a big hit. LG has released three robots to serve the hospitality industry — they can serve drinks, deliver room service and check in and check out hotel guests. Yes they serve a function, but it is very early in the game and there is much more to develop. For now, the concepts of robots are good for simple tasks and could augment service in box stores where customers need help finding an item.

Charles Dimov
BrainTrust
One the one hand, automating the store with robots makes it more like an online experience — except that I can see, touch and feel the product I want. Though it really does not differentiate from any other source of the product, online or physical. Point taken here. However, there is room to add robots for two reasons. First there is the novelty effect. People will come in to your store to test the technology out, talk about it with friends, etc. Second is the possibility that it can augment your human service staff. When I cannot find an attendant at Lowe’s (sorry, not picking on you guys), or the associate has a lineup of three other customers waiting on them, then I would love to get to a robot attendant to just tell me where to go to find the peculiar item I need. Nikki, I do agree with you. The in-store experience needs to be focused on personal contact, getting advice from a person, having a tailored service, etc. These are the differentiators… Read more »
Brandon Rael
BrainTrust

When we were growing up, we were promised a future full of flying cars, automated everything, robotics and everything connected. While we are seeing the first glimpses of these technological innovations, particularly with some of the business cases demonstrated at the NRF show, the apprehensions or concerns about robots and automation taking over everything are a bit premature.

We can fully support robotics, along with the seamlessly connected automation capabilities enhancing the retail shopping experience. However, there are fundamental challenges in brick-and-mortar retail that simply inserting the latest technological innovations won’t solve. Fundamentally the rules of merchandising, in-store experiences, fulfillment and the overall customer experience remain the same.

With that said, automation and robotics are going to increase in size, scale and will be operationalized in the coming years. It just may not happen as fast as we expect.

Bob Amster
BrainTrust

This is the SOS (shiny object syndrome) again. We are seeing a lot of that lately in retail. The robot in certain stores store types can serve two purposes. First, to greet customers when they come in and create a little fun and entertainment. Second, to perform mundane mechanical tasks, such as re-stocking shelves. Beyond that, you’d be replacing the sales associates and then what’s the point of going to a store? We can revive Horn & Hardart and Automat, and save the money on the robots!

Chris Petersen, PhD.
BrainTrust

Nothing is black or white in retail anymore. Currently, the economics of implementing “robots” in retail are simply not practical. Too much upfront cost and infrastructure. As Nikki points out, robots are a poor substitute for well-trained staff that can make all the difference in customer experience.

However, there are aspects of retail where automation can make a rapid difference economically. Out-of-stocks are the bane of physical retail and result in many lost sales opportunities. There are now “robots” capable of scanning aisles many times a day, much faster than any human. They can prevent out-of-stocks, pay for themselves and eliminate a very boring job for staff.

I agree with Nikki, we will not see physical “Robbie the Robots” roaming the sales floor. The use of AI is another matter entirely. We will increasingly see IoT and AI used to streamline operations and increase efficiency.

Art Suriano
BrainTrust

Robots are already finding many places in our world, and they will continue to do so as their abilities advance. However, I agree with Nikki because a significant part of the in-store experience is the opportunity to engage with store associates who, when trained correctly, can make the experience enjoyable. I see robots taking over in-store tasks, and that’s fine as long as the executives of the company let the associates use their free time to engage with customers. I do see the day that we will all have a robot in our homes taking care of many of the services we do ourselves, but hopefully we’ll be smart enough not to sit back and have robots do everything while we get fat and useless. There is a lot of hype about robots and many think they’ll take over all the jobs, but I don’t see that happening. I see an opportunity for robots to make our world better providing more conveniences, but hopefully that’s as far as it will go.

Phil Chang
BrainTrust

The term “robots” is probably what throws things off. I can see automation continuing to make the process of shipping and receiving more efficient, but I certainly can’t see human-like robots doing things in-store for significantly cheaper anytime soon. (Maybe stocking, eventually? Or taking inventory?)

I think my problem with human-like robots is that commodity-based buying is going online and probably becoming subscription-based. Robots won’t be able to do experiential selling, so now we’ve got robots with no jobs!

Tom Erskine
BrainTrust
20 days 19 hours ago

Robots are not the answer … yet.

Right now, interacting with in-store robots isn’t “better” than interacting with well-trained associates, so it is hard to imagine widespread deployment. But the unfortunate and scary truth is that robots are collectively getting smarter far faster than we are (not autonomously, they are being taught).

Steve Montgomery
BrainTrust

Retailers are looking for a solution to address all the issues involved in operating at retail and robots are the flavor of the month. “It will all get better if we wait long enough and deploy enough technology” seems to be the mantra. Many retailers waiting for robots to be the fix will find themselves out of business.

Retailers need to address their issues now. What that fix encompasses will vary but will certainly involve being able to meet the expectation of both the online and in-store shopper.

Lee Kent
BrainTrust

What will transform the retail store is the right experience and that will likely require more skilled workers in certain areas. If that transformation can be offset by the occasional robot to carry out the mundane and routine parts of the job then great, but the robots themselves are not The Transformers. Rather they are “robots,” defined as “a machine that resembles a human and does mechanical, routine tasks on command.” It doesn’t sound very entertaining when you put it like that, now does it? For my 2 cents.

Doug Garnett
BrainTrust

Excellent observations. And there’s more …

Do we really want shoppers thinking “How come there’s never a robot around to help me?”

Aren’t we told that the “experience” at the store is critical? As long as we ignore the idea of stores become C-grade amusement parks, that idea is right.

Successful stores are those where consumers want to be. They need to want to shop there. They need to leave and think, “I’ll go back without question.”

Robots will not help — and they very well might hurt the store experience. That said, there would be a very brief period of “gadget enthusiasm” at the beginning where robots might attract a group who really love gadgetry. For the rest of us, there’s no evidence they will help.

Marge Laney
BrainTrust
20 days 18 hours ago

Brilliant! Nikki nails it! Retailers seem to be hell bent on providing their customers with online experiences in-store. As I’ve said many times, if I’m going to make the trip to a store only to be met with an internet experience, why bother?

Not only is this fascination with robots irrational, it’s financially irresponsible. Instead of investing time and money on removing human interaction from the store experience, retailers should be investing in tech that encourages and enhances personal connections.

Once you remove the faces and emotional connections from brand interaction, you’re left with a value proposition based on the lowest price and the fastest transaction. This neither builds loyalty or a viable business, unless you’re Amazon.

Mark Heckman
BrainTrust

As the technology of robotics becomes more sophisticated and affordable, their increasing presence in the retail marketplace is inevitable. While I agree with others that there are many interpersonal transactions at retail that are just too complex and reactive to lend themselves to conversing with a machine, if and when those machines begin to be more pleasant and abiding than the retailer’s human resources then we will see an impact on front-line jobs in retail.

Personally, as a retail veteran, I have suspected that many of the accountants and finance people I have worked with in the past were robots — or at least their responses to budget issues seemed robotic. I would think their jobs would be the first to go!

Michael La Kier
BrainTrust

Unless robots will come into the stores and start buying merchandise they will not “save retail.” So far, few use cases of robots in-store seem to pan out. The recent announcement of retailers testing robots to prevent out-of-stocks is a good case in point. Out-of-stocks are a big problem, but since most retailers already have in-store cameras, couldn’t this be solved with zoom-lenses, better software and analytics? What is to be gained by adding robots going down the aisles? We see this often — technology in search of a problem to solve vs. focusing on the core problems and then seeking a solution.

Doug Garnett
BrainTrust

Absolutely. Has retail merely become the place that those who can make a robot are desperately seeking to create a market for themselves? We suffer a plague already of technology desperately in search of a reason to exist. Your observation about the theories connecting them with out of stocks is right on. The tools are ALL in place to prevent out of stocks — if retailers can’t use these tools well then a robot won’t help. If retailers do use them well, then robots won’t add enough to justify their cost.

Ralph Jacobson
BrainTrust

I think the tactical deployment of any robots in a physical store will determine its effectiveness. Robots don’t have to be moving around the store. They could be stationary or even like old-fashioned kiosks that can offer guidance on product location, upsell offers, etc. There are plenty of opportunities for retail automation, many of which are successfully deployed as we speak. One big benefit I see is the suggestive selling capabilities of robotic technologies in stores with the ability of AI to learn about shopper missions and grow the velocity of slower-moving items and increase overall inventory turns throughout the assortment. This would help minimize the top 20 percent of items representing 80 percent of the revenue.

Doug Garnett
BrainTrust

In truth, it’s nearly impossible for a network of TVs displaying in-store video to be maintained in good operating condition. Kiosks too often fail because they aren’t able to be maintained. Were the robot to be merely an automated kiosk, why would we think it could be maintained? All this is, perhaps, sad. Yet it’s store reality.

Mel Kleiman
BrainTrust

Yes we should all be fascinated with robots and the way they will change the store. No this will not do away with employees, it just means that the skills and attitudes that we hire for will be different. When you have fewer actual human employees, those employees must be better than what most stores now have.

Tony Orlando
BrainTrust

Speaking as a dinosaur before the robots took over, there is a place for robotics. But as I have said ten thousand times before, most customers need the human touch, especially in the independent stores. Big box stores may use robots for stocking shelves, but outstanding humans who are well trained in customer service will never be out of style. As a matter of fact, the top tier sales associates are in short supply more than ever before, as we rely so much on clicking a mouse to get stuff.

I have a pretty good staff of folks who are trained in customer service, and it has kept us in business for many years. Things are changing quickly, and in my area, not for the better as our economy is in depression mode. But where the money areas are, there is the opportunity for amazing stores that know how to produce great products, with great associates, and they will continue to do very well.

Craig Sundstrom
Guest

I would agree that once (almost) anything is described as “transform(ational)”, the discussion of it has become irrational — yes, “drone delivery” I’m talking ’bout you — but in all fairness to robotics, I believe much of the focus is on automating stocking and other nominally backroom functions, more than replacing sales staff. So the changes, whatever they may be, will be like most changes: evolutionary rather than revolutionary. Whether or not this equates to “transforming” is a matter of opinion.

Ken Morris
BrainTrust
While automation and robots can be a way to cut overall costs, there is a fine line in where it makes sense to deploy. Some highly personal product decisions and luxury brands will be the last, or maybe never, to adopt automation to replace humans. The real-time retail trend of identifying a customer and guiding the customer through the sale via human interaction won’t soon be replaced by automation. The process of customer engagement, context (time of day, how the customer is dressed, what department they are shopping, if they have a wedding ring, if they are well dressed, etc.), as well as cross-selling and up-selling requires a finesse that today’s robotics cannot replace. Much of the focus has been on reducing the dependence on cashiers, however, with robot technologies, companies are looking to automate warehouse processes and even associate assistance (Lowe’s robot example). Any task that is repetitive and predictable can be automated and we will see new ways of tapping automation to reduce costs and, hopefully, improve speed of service. Using robots to… Read more »
Min-Jee Hwang
BrainTrust

Getting excited about tech is only natural, but overstating the impact robots can have on the industry makes us lose sight of what shoppers are asking for. If shoppers want a more personalized, exciting experience in-store, robots can certainly help, but humans will be driving this innovation. Getting an email “since you purchased X, you may like Y” might lead to a conversion, but a real, live person telling a shopper that they have tried the product and love it is a much stronger endorsement. The path to success in retail is human, with a healthy dose of tech –not the other way around.

Patricia Vekich Waldron
BrainTrust

Robots, like all new technologies, will follow the HypeCycle before coming to the place where the provide true value in a cost effective way.

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Braintrust
"While robots will play much more of a role in retail, all this talk of them replacing humans in stores is overcooked."
"The path to success in retail is human, with a healthy dose of tech –not the other way around."
"Unless robots will come into the stores and start buying merchandise they will not “save retail.”"

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