2019 Retail Tech Trends: automation

“Automation” is coming fast to retailers, and 2019 will be a pivotal year. Radical optimisation of operational functions is the only way that retailers can create the money needed to afford the customer-facing services shoppers demand.

Retailers have spent the last ten years addressing the challenges and opportunities created by the rapid consumer adoption of “smart” mobile devices following the introduction of the Apple iPhone in 2007. Today, technology-enabled consumers routinely begin their shopping journeys in the digital domain – “outside the four walls” of the store. The new consumer behaviours have caused retailers to redesign their selling environments to be a (hopefully) harmonious blend of digital and physical experiences that is pleasing and relevant to consumers, and reinforces each retailers’ brand.

While those changes are good for consumers, they are at odds with the “self-service” concept inherent in a 20th Century store-only operational model. To service consumers that begin their shopping journeys outside of the store but complete them in the store (example: Click & Collect), or to ship direct-to-consumer purchases, retailers have to incur new operational costs which cannot easily be recovered with higher prices (this is the “Amazon effect” at work!). 

As the industry enters the new year, retailers will be challenged to rethink how their operational processes and systems will support the new selling environment in a profitable way. Something more than incremental “belt tightening” is required; radical optimisation of non-selling functions will be necessary. And that’s where automation comes into play. 

2019 will see a combination of technologies (IoT, AI/ML, robotics) increasingly being used in distribution centers, customer order fulfillment facilities, and in the stores, to perform a variety of tasks from eaches pick & pack to in-aisle inventory management and planogram compliance, and “cashierless” checkout.  Beyond that, retailers will increasingly use AI/ML “algorithmic” data analysis to automate decision making for routine operational processes.

Futurists point to automation of “last mile” direct-to-customer order delivery – everything from flying drones to automated vehicles. While there are trials of those technologies ongoing in both the UK and the US, retailers have many opportunities to optimize processes “inside the four walls”, in order to operate at greater speed and lower cost, and to enable the level of in-store customer service that today’s savvy consumers demand. 

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