James Smith, UK Managing Director of global robotics company AutoStore, discusses the future of retail and how robotics will help redesign the retail offering.
How do you think retail will change after this period?
Retailers will already be putting plans in place to change things off the back of this. One of the biggest trends we are seeing at the moment is the significant increase in demand for e-commerce. Those businesses who are either 100% online or mostly online-focused have been able to maintain profits during this pandemic – and have more than likely managed to pick up some new customers as well in light of the impact this virus has had on traditional retailers.
The growing demands on existing stock and items means a lot of companies are now looking to automate and will need to do this quickly to fulfil the demand for products. Automation is a debate that has been had among many retailers and businesses for a long while now, but this pandemic has forced their hand. Today, these businesses are saying they need to automate their supply chains and warehouses in order to protect themselves from future scenarios that could hurt them. What we have learned as a society and an economy is that if there is a second wave or another similar pandemic in the future, current systems and business structure will not be able to cope with another COVID-19 situation. That is driving a strong desire from businesses to automate their operations.
What we will also begin to see in the future is an emergence of micro-fulfilment centres to help support local stores fulfil demand for products with an automated mini warehouse behind the facility. This is something we are seeing in high demand across the US, but will soon be a norm for UK businesses as well, particularly among supermarkets and food suppliers. This will mean people travelling to a store will be doing so to pick up an order from a micro-fulfilment centre, which has pre-ordered and pre-packaged.
The current methods of social distancing and one-way systems have exposed a real flaw in the way we layout our smaller and larger stores in the UK and highlighted a need for change. What we need to consider is how we will redesign these retail facilities to be more space-efficient and provide customers with a much safer and fulfilling environment to shop in. Customers are not happy going into shops at the moment and don’t feel entirely safe – micro-fulfilment will solve the issue by opening up another option for shoppers and help combat social distancing restrictions and one-way systems within supermarkets.
There is also a brand element to this as well. Brands will currently pay to have a specific slot on a shelf within a store, but if we redesign what it means to shop this will change how brands consider design and packaging for their own products as we move to a more digital, click & collect style of shopping.
What role does automation have in supporting retail?
Previously, automation within logistics and supply chain industry would be looked at within a warehouse facility, where they would be looking to adopt automation into an existing environment. Now though, businesses are looking to automate their entire end-to-end process and bring the technology into a retail facility and not just into a warehouse.
There are very few examples in the UK at the moment which show how to bring automation into a retail outlet and there are very few companies to have done it – which creates questions among the retailers on how they can do this.
Across the likes of Asia, this is something that has been implemented to improve the overall efficiency of a business, so it’s possible, but it is about taking ourselves away from the normalities of retail which we have grown so accustomed to.
Is micro-fulfilment coming to the UK?
Micro-fulfilment will 100% be present in the UK in the future. There is no doubt in my mind that this will make up a huge part of our shopping experience moving forward.
We have seen first-hand from the discussions we’ve had that there is a need and demand for this type of system from businesses, and are working with companies to help shape and design how this system will work and what this facility looks like from the customer’s point of view. There will be 24-hour pick up systems from automated bins at retailers where you can visit a micro-fulfilment store to collect an order, removing the restrictions of an eight-hour working day.
Businesses are preparing their bricks and mortar operations for the future, and seeking localised, automated systems to help meet customer demand.
What is the next step for retail supply chains coming out of lockdown?
One of the biggest changes for retailers is understanding how they can get customers back into their stores in a comfortable way. How do they get these people back into store as quickly as possible and with confidence in the facility and its safety?
Retailers and customers alike are now reflecting on what was the worst aspect and the toughest challenge of going into lockdown – which was actually having availability of stock on shelves, such as toilet roll and flour for example. What we have seen therefore as a step in itself is a real change of thinking from retailers, where they are thinking more about out-stocking their competitors. For example, if a retailer can have more inventory available at a local level, they will attract people to their store at a more efficient rate because customers know there will be available stock at that store that a competitor might not have. It is essentially bringing an end to the phrase “out of stock” and creating a strong brand message from a store of reliability, because the system allows inventory to constantly be replenished and available to the store on demand.
What will automation mean for jobs in retail? Will this mean the end of the shop assistant as we know it?
It won’t necessarily impact the number of people working, but it will impact the job roles available to employees. Rather than people spending a large amount of time stacking shelves, what we will see is employees working with the automation system and be presented with an opportunity to up-skill themselves and work with robotic systems rather than shelving units.
Employees could be presented with an opportunity to fulfil other needs of the business, and also enjoy a role that has more job satisfaction and variation tied to it.
As well this, the business itself will see a benefit to upskilling their workforce by removing the risk of human error when it comes to supply chain efficiencies. Sick days and staff holidays will also be less of an issue for businesses.
Will customer experience be redefined as a result of lockdown?
Something the larger retailers have been and will continue to ask themselves is whether their customer experience will actually change after lockdown. Will those that do not invest in the experiential aspect of their business struggle to keep up with the competition or will customer loyalties still play a big part in their retail and grocery decision-making.
Many shoppers value that warm feeling you get when entering a retail space and so this will definitely play a part in where we go as customers.
E-commerce of course is increasing and will remain a huge part of the retail sector, but there still remain those who do not use e-commerce. In-store revenue is massive among older, non-tech savvy generations who have strong buying power and still contribute a significant amount to revenue streams, so we cannot abandon customer experience and must factor this in when we consider how to automate systems and still maintain retained and new custom.
AutoStore is the world leader in high-density storage with an award-winning robotic cube-based, storage and retrieval system. The pioneering system has transformed the logistics and delivery process for businesses across the globe, with clients such as Gucci, Puma, Asda and Ocado.
