TL;DR – The demand for increased worker productivity, the advantage of cost effectiveness, and escalating consumer pressures are prompting retailers to explore the potential benefits of introducing or expanding the use of robots in the retail environment. Recent advances in robotics will soon allow robots to play a number of divergent roles
the retail world.
Independent retail consulting firm Retail Group Malaysia (RGM) expected the local retail industry’s sales growth rate for 2016 to be 3.0% or RM99.1 billion. 2017 remains a challenging year for Malaysian retailers. RGM projected a 5.0% growth rate in retail sales for 2017 according to its November 2016 Malaysia Retail Industry Report.
According to Frost & Sullivan, Southeast Asia (only Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam) is poised to become one of the world’s fastest-growing regions for e-commerce revenues, growing from around $11 billion in 2015 to more than $25 billion by 2020.
As retailers seek ways to maximise sales, streamline processes, and maintain a position ahead of competition, an increasingly bright spotlight has been put on the potential to rely more heavily upon robotics across a greater number of roles.
Recent advances in both robotic design and supporting technologies will soon allow robots to fulfil broader purposes in the retail space, replacing and/ or freeing up retail staff to meet both consumer and corporate demands.
1. Need for improved productivity.
Globally, productivity growth – the central driver of rising economic output and material living standards – has been slowing in many advanced and emerging economies in the wake of the crisis, according to new data released in the OECD Compendium of Productivity Indicators. Malaysia’s labour productivity is expected to grow between 2.5 and 3.5% in 2016 said International Trade and Industry Minister Datuk Seri Mustapa Mohamed. In 2015, it grew by 3.3% where productivity per hours improved to RM34.90.
The five-year development strategy of the 11th Malaysia Plan has earmarked productivity as the game changer to achieve inclusive and sustainable growth. The target is to achieve a 3.7% productivity growth during this period. The integration of robotics into the workplace, whether to assist existing human staff or to fully automate tasks currently performed by humans, is becoming an increasingly attractive and feasible option.
Historically, the trend towards robotic labour has been most pronounced in manufacturing industries. According
to a study conducted by London’s Centre of Economic Research, robotic labour in the manufacturing industry accounted for 16% labour productivity growth and a 10% increase in national GDP in 17 countries studied.
Based on scenario modelling, McKinsey Global Institute estimated automation could raise productivity growth globally by 0.8 to 1.4% annually. Although the needs of retailers certainly differ from those of manufacturers, the overall productivity gains associated with automating tasks currently performed by human staff may be similar to those seen in the manufacturing industry.
In fact, multiple companies including Target and Lowe’s, are currently looking into expanding the role of robotics in applications ranging from customer service to self-service checkouts in an effort to curb rising operating costs while reducing errors.
2. Improved robotic design.
Recent advances in both hardware and software are expanding the capabilities and potential roles of robots. For example, improved robotic design now allows robots to traverse more difficult terrain. In addition, advances in robotic fine motor skills are facilitating more precise interaction between robots and individual small or fragile items.
Recently, a robotic sub-field known as end-of-arm-tooling (EOAT) has seen rapid growth. EOAT aims to develop soft robotic hands known as ‘grippers,’ which are more precise and able to handle a greater range of objects than traditional robotic arms. Recent breakthroughs in 3-D printed grippers from groups including Soft Robotics Inc. and MIT may provide cost-effective EOAT grippers within the next five years.
Such technologies will improve the versatility of robotic staff in the retail space, allowing them to interact seamlessly with objects ranging from fragile eggs to heavy store pallets.
At the same time, advances in voice and facial recognition software will soon improve robots’ ability to communicate directly with customers and even to read facial expressions in order to simulate an appropriate emotional response. Further, advances in software and machine intelligence will allow for a greater degree of machine-to-machine (M2M) communication. This will facilitate coordination of more complex tasks involving multiple robots or robots
and other computers.
3. Customer service demands.
A 2014 study by Qmatic found that although 82% of retailers believed that they consistently provided ‘extremely
good’ customer service, only 28% of consumers felt that they regularly received such service, and 31% said they had abandoned a purchase due to a bad customer service experience within the previous 12 months. Demand will rise in coming years for technologies that will correct this discrepancy, by either providing a uniformly high level of customer satisfaction or facilitating a higher level of in-person customer service.
Machines can already outperform humans in some of these activities as they are highly adept at managing warehouse inventory, for example, and at least one fashion company has a bot that advises clients, via their mobile phones, about the best lipstick match.
Despite the popular depiction of robots as cold and stiff, advances in social robotics may soon pave the way for machines to directly improve customer relations. In 2016 Pepper, which is a humanoid robot created by Softbank Robotics, made its debut in a customer-facing role, marking the first use of a humanoid robot in a live retail environment in Northern Europe. Pepper currently fills a role akin to a greeter, directing consumers to other staff members, answering basic requests, and assisting with item pickup. As social robotics continues to advance, robots similar to Pepper will find greater acceptance in customer service roles.
In fact, a 2015 study by Oxford University and Deloitte included customer service positions as one of the top 50 jobs most likely to be automated within the next decade.
4. Increasingly empowered consumers.
The traditional measures of cost, choice and convenience are still relevant, but now control and experience are also important. Consumers have global access and variety of choice. Shift in product and services offered, require new business models and methods of customer engagement. Technology such as Virtual reality (VR), along with its sister technology augmented reality (AR), offers retailers the opportunity to transform how people shop.
One customer might try on shirts without having to travel to the store.
Applications using either technology stand to eliminate customer pain points, elevate customer service, and create a differentiated, personalised customer experience. This is where businesses need to transform their model and approach.
Source: myForesight® magazine by MIGHT