How Retail Automation Can Future-Proof Your Business
As automation continues to enter and transform countless industries, the retail sector is no exception — especially since e-commerce got such a boost during the Covid-19 pandemic. It is a well-known fact that automation is a great way to carry out and complete tasks more quickly. However, there are many more benefits to retail automation, affecting nearly every aspect of your business.
There simply is no way around it: retail is a massive industry and the retail automation market is no different. In fact, having reached a value of €9.7B back in 2018 already, the Global Retail Automation Market is now projected to reach €20.25B by 2026 — that is, at a Compound Annual Growth Rate (CAGR) of 9.7% between 2021 and 2026.
Let’s take a closer look at what retail automation is exactly and how it can benefit your business.
Put simply, retail automation provides businesses with a technology that enables them to streamline manual, repetitive processes that are otherwise too time-consuming. It refers to automating, simplifying, and removing as many low-value manual processes as possible to lower the workload of employees and freeing up time for more valuable tasks.
In e-commerce — and particularly in retail — automation really affects every phase of the retail journey. New technologies have simply changed the way we shop, forcing the retail industry to reconsider its business strategies. Retail automation can entail order management, inventory management, order fulfilment, and so forth.
We will talk more about this in the In-Store Retail Automation Examples part.
Retail Automation Trends
As with nearly all industries, the Covid-19 pandemic has brought about significant change in the retail industry. The numbers below show the shift in consumer behaviour, making it understandable that businesses that had an effective e-commerce strategy in place were not affected as badly by the pandemic as the traditional retail businesses.
32.4% → The increase in e-commerce sales during 2021.
3.2% → The decrease in brick and mortar sales during 2021.
56% → The amount of customers that have tried new retailers during the pandemic.
It is only logical that this e-commerce boost has brought about a number of trends in the retail sector that are most likely here to stay.
Omnichannel Retail Marketing
A new type of marketing is taking over the corporate sector: omnichannel retailing. Omnichannel retail marketing simply refers to the use of various channels to offer versatile product services to customers — such as a wide variety of delivery choices or curbside pickups.
With consumer behaviour constantly changing, an omnichannel approach has become essential for many businesses. In fact, according to research by BigCommerce and Retail Dive, 46% of retail executives stated that — as a result of the pandemic — their ambitions have shifted towards an expansion of their investment in omnichannel retail.
Smart Technologies
Virtual Reality (VR), Augmented Reality (AR), and Artificial Intelligence (AI) all have a place in the new normal of the retail sector. These technologies allow customers to have a highly individualised shopping experience, while also enabling businesses to predict trends and better understand consumer behaviour.
77% of UK grocery retail directors believe that their industry will be impacted by AI and Machine Learning. In fact, it is estimated that by the end of 2021, 79% of businesses will have personalised the customer’s visit to their shop. As they will now be able to predict the customer’s preferences more accurately with the use of AI, businesses may be able to enhance their forecasting demand by up to 50%.
“Did you know that we actually dedicated an entire blog post to e-commerce trends and statistics earlier this year? I’d highly recommend giving it a read if you are interested in more trends related to retail automation!
30 Mind-blowing E-commerce Statistics (Updated in 2022) ”
Automatic Purchases & Marketing Automation
Marketing automation is something that you are probably very familiar with by now. It refers to the intelligent way retailers acquire personal information and utilise it to drive more sales. This is often done through personalised emails, offers, discount codes, and so on.
For example, if you have not visited a shop for several months, you will receive an automated email to motivate you to bring another visit. If you have recently visited this same shop, you will receive a completely different message — perhaps a discount code as a thank you for your devotion.
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Automation can help minimise the number of human errors, which has an enormous impact on the accuracy of data — think of inventory levels or order fulfilment data. However, in 2018, nearly 50% of warehouses still tracked their order cycle times manually, making the processes more prone to human error. There clearly is a lot of room for improvement.
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As mentioned above, automation can replace a lot of manual processes, which means that there is less human capital needed to perform certain tasks. However, according to a 2019 report, 62% of overall retail workers — and 94% of retail workers in e-commerce — agree that technology will create new job opportunities instead.
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According to McKinsey & Company, about half of all current work activities can be automated by adapting new technologies. From another perspective, 60% of current occupations have more than 30% of activities that could be automated. Moreover, if a typical grocery store were to leverage all available automation options, they would be able to operate with up to 65% fewer hours.
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Increased efficiency also improves the customer experience. This is especially rooted in new levels of personalisation, faster and more advanced order fulfilment, and inventory visibility as well as the ability to predict consumer demand — thereby preventing stockouts.
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With more satisfied customers, you will automatically see more sales, too. Besides, since 64% of consumers actually want to receive personalised offers from retailers, automation in the form of email marketing can prove to be highly effective in terms of sales.
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One major benefit of retail automation is its ability to protect businesses by proactively detecting fraud — which is the top concern for retailers according to the National Retail Federation. In fact, 70% of retailers highly prioritise machine learning analytics for fraud mitigation investments, study says.
Now that we have gotten a better understanding of what retail automation is, let’s have a look at some of the more practical ways in which it is commonly adopted by retail businesses.
Warehouse Management
One of the main ways in which retailers can embrace automation is through warehouse automation. In fact, it is expected that the warehouse automation market will see tremendous growth in the upcoming years — from a €12.4B value in 2019 to an estimated €24.8B by 2026. Moreover, it is expected that 61% of warehouses will combine manual labour with automation solutions by 2024.
Warehouse automation can take place in many ways, from picking and packing robots that can help with order fulfilment to robots that optimise your warehouse’s layout to free up space for more inventory. Other common use cases of warehouse automation include barcode scanning, data collection, employee management, and so forth.
Inventory Management
With inventory management software, you will be able to accurately track your stock and predict future demands. By automating stock counts, the system will automatically be able to alert you when stock is low, while also allowing you to automate purchasing processes for your customers.
Retail automation can also be very useful for multi-channel management. The latter is of great importance these days as more and more retailers are combining different channels — such as brick-and-mortar stores, online stores, pop-up shops, or third-party marketplaces. It is, therefore, more important than ever that inventory levels are automatically updated across all channels.
Retail Marketing
As mentioned above, retail marketing is one of the biggest trends found in today’s retail industry. The main goal of automated retail marketing is to improve the effectiveness of marketing campaigns while saving tons of time. Examples of areas that can be automated in retail marketing include abandoned cards, email receipts, personalised recommendations, and customer retention campaigns.
On another note, automation can also be used for accounting, bookkeeping, and payroll through automated billing and payment processes. Not only will this allow for the seamless handling of internal payments, but it will also keep your customers satisfied without them having to wait for refunds.
Robots
Unsurprisingly, robots are found roaming the stores more and more often these days. Again, there is a wide range of use cases of in-store robots, too. They can be found stocking the shelves, assisting customers, and, in some cases, even monitoring theft. Especially since the Covid-19 pandemic, robots have been increasingly adopted for handling cleaning and sanitisation.
“ A great example of in-store robots can be found at Walmart. The multinational retail giant has deployed robots in approximately one thousand of their stores. Not only are they able to carry out the most basic tasks, but by scanning the shelves on an ongoing basis, they can easily alert the staff of low stock. At the same time, they are able to speed up the online order fulfilment process significantly.
To find out more about how robots can help fuel your business growth, I would highly recommend you to check out the following article:
Robotics 101: A Complete Guide to Warehouse Robots by Application”
Besides robots, there are also various automation boosting hardware that can be commonly found in retail stores these days. This includes POS systems, self-checkout terminals, automated retail vending machines, shelf-edge labels, electronic shelf labels, label printers & compact labelers, info kiosks, vision AI cabinets, and secure lockers.
Universal Fleet Management
If your facility — whether it is a warehouse, store, or both — is using different types of robots, it is important to understand the significance of a universal fleet manager. Different types of robots from different vendors are supplied with their own, individual operating systems. These different systems, however, are not able to communicate with each other.
At Meili Robots, we offer a solution to this problem — our universal fleet management system called Meili FMS — that allows for the seamless orchestration of mobile robot fleets. Here, you will be able to have a full overview of all of your robots, while being able to automate task allocation, control the robotic traffic in your facility, and autonomously navigate the robots.
“There are many benefits to the integration of interoperable systems, such as optimised efficiency, more accurate inventory management, and a safer workplace. To fully optimise their retail automation — especially when using robots — retailers need to consider the benefits that come with an interoperable solution such as a universal fleet manager for mobile robots.
If you are curious to know more about interoperability and why it may be essential for your facility, you can read all about it in our in-depth report on Robotics Interoperability.”
Evidently, retail automation is a trend that will prove to be beneficial to a lot of retailers out there. Not only will retailers themselves reap the benefits of automating their business processes, but it will also be a recipe for more satisfied customers. In fact, according to Capgemini, 46% of consumers are willing to shift their purchase from an online retailer to a retailer with automated stores.
66% → The amount of consumers that believe automation can solve challenges such as long checkout lines.
46% → The amount of consumers that are willing to shift their online purchase to an automated retail store.
As is the case with any industry, there are always challenges present. Retailers can, in fact, use automation to face some of their challenges. Let’s have a brief look at them.
Supply Chain Challenges
It goes without saying that supply chains have taken a big hit during the Covid-19 pandemic, with inefficient inventory management being the biggest challenge for many retailers. However, through automation technologies and AI, retailers can optimise their entire supply chain — from stocks and logistics to staffing and distribution. This will be of huge benefit to them as it allows them to accurately predict and understand the fluctuations in demands and trends.
Contactless Retail
One of the major trends within the retail industry is the demand for contactless in-store payments. This process can be easily automated by integrating AI. Not only will this be of great benefit to the customers — their experience will increase tremendously as it reduces waiting times — but it will also indirectly affect the bottom line of your business by reducing in-store operating costs.
Personalisation
As we have discussed earlier, a great way to drive sales is by improving customer personalisation. Not only will the integration of AI provide customers with a better experience, but it also allows businesses to better understand the customers’ preferences and shopping behaviour. Through automation technology, retailers can adjust their offerings to each customer’s individual needs — which, in turn, will boost revenues.
Evidently, retail automation can be a great tool for retailers to improve their customers’ shopping experience while at the same time optimising their operational efficiency. Adopting automation can — and most certainly will — be an essential part of every retail business out there, allowing them to make smarter, more informed decisions that will support their scaling capabilities into the future.
Are you curious to know how Meili Robots can contribute to the automation of your retail business? If so, please do not hesitate to reach out to us through our contact form!
About Meili Robots
Meili Robots is developing the next-generation of mobile robots fleet management, called Meili FMS. A universal digital solution, an all-in-one platform that is capable of handling different kinds of Autonomous Mobile Robots (AMRs) and Automated Guided Vehicles (AGVs). Enable traffic control, empower interoperability and facilitate automated task allocation — all via intuitive UI. Check our website meilirobots.com/product to learn about our products. Contact us to find out more: info@meilirobots.com.
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