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Robots aren’t taking retail jobs – lack of technology investment is

Artificial intelligence (AI) is the latest form of technology to be cast as the grim reaper for jobs in the retail sector as AI and automation sweeps in and removes the need for human involvement.

According to the British Retail Consortium, the industry is forecast to potentially lose up to 60% of its roles over the next 20 years due to AI.  

There is no disputing the fact that massive investment is going into robotics and alternatives to manned checkouts in-store. Ocado, Walmart, Amazon and all the major UK supermarkets are among myriad retailers experimenting with robots, AI, and app-based shopping solutions. This is undoubtedly impacting jobs but there is a counter argument that the death of retail jobs is more likely to be caused by those retailers who go out of business because they have failed to adapt and invest in technology.

Fashion chain Arcadia is like many troubled established retailers in having been forced to close stores and make redundancies because of a failure to evolve within a changed marketplace. Arcadia CEO Sir Philip Green is well known for his lack of commitment to technology while at the same time rivals have built technology-based models that have aggressively taken its market share.

The combined sales of Asos and Boohoo are close to the £1.7 billion that the Arcadia brands achieved in the year to August 2017. Its predicament is not especially unusual as there are many examples of failed retailers who have been disrupted by newcomers entering the market armed with the latest technology.

Robots free up employees to be humans

Judith McKenna, CEO of Walmart International, at the World Retail Congress in May expressed her view that she is very much an advocate for investing in technology as not only a saviour of existing jobs but also a creator of new roles within the retail sector.

“History tells us that technological innovation creates more jobs than it takes. We should not downplay the impact of technology but my optimism kicks in and I believe there will be net new opportunities and jobs. Many will not be imagined yet. Consider what the future will look like…there will be major growth in employee demand,” she suggests.

"AI can liberate employees. It’s a huge opportunity for companies. Technology can be scary but we should not lose the perspective that it is at the service of humans, companies and societies"Barbara Martin Coppola, CDO, Ingka Group

One of the early ramifications of technology introduced into Walmart stores is the reassignment of employees to deal with more value-added tasks that have more direct impact on customer service. McKenna cites the introduction of autonomous floor cleaners into Walmart stores that have “freed up associates to sell and service”.

But she acknowledges that there is some inevitable pushback – particularly when it comes to AI: “There is some concern about AI and automation. We need to work out what are people’s concerns and give them assurances. It should not be the grabbing of headlines about fear.”

Barbara Martin Coppola, chief digital officer of Ingka Group – which operates over 300 Ikea stores – agrees that the technology has to be conveyed as a positive force rather than a job decimator: “AI can liberate employees. It’s a huge opportunity for companies. Technology can be scary but we should not lose the perspective that it is at the service of humans, companies and societies.” For this to be fully realised she acknowledges that some restrictions and regulations might need to be introduced in order to keep AI developments in check.

US grocer, Giant, introduced a googly-eyed robot to roam its stores searching for out-of-stocks
US grocer, Giant, introduced a googly-eyed robot to roam its stores searching for out-of-stocks

Friendly robots

Prof. Michael Feindt, founder of AI specialists Blue Yonder, suggests the negative perception of AI and robots is rooted in Western culture, in contrast to the more positive viewpoint held in Asia. “In Western culture we have films where the human saves us from machines. In Asia it’s about bad people and robots saving us from them. In Europe and US there is a hesitancy to invest but in Asia not so.”

He warns that this could lead to the likes of India, Asia and Japan leapfrogging Western countries in their technological developments, which is disappointing to Feindt because the early implementations of Blue Yonder solutions by Morrisons and Otto have shown no reductions in employees and positive operational impacts on the businesses.

“They have made the [impacted] employees work differently. The store manager previously had to spend two-to-three hours at a screen for replenishment but now [it’s automated] they have this time for other things. They can talk to customers and so the human component has actually been increased in stores. Customers like it. It’s not about making people jobless,” he explains, adding that people don’t want to shop in cashier-free stores.

Employee vacancies

Rather ironically, while the headlines continue to be dominated by the potential loss of jobs from the rise of automation, the reality for many organisations is that they are struggling to fill vacancies. Automation might therefore actually be the answer to the growing issue of shortages of employees in the sector and broader workplace in the UK rather than the cause.

This is certainly the thinking in the US where Kroger CEO Rodney McMullen is pushing technology hard in his business to help fill the personnel gaps. While he is also continuing the hunt for more people: “You can never have enough talent. We’re always looking out for more people. We will never be comfortable,” he says. This suggests that the future of retail will most likely involve a mix of people and machines rather than a depressing doomsday scenario of an industry populated only by robots.

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