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Retail Automation: Keeping Up with Modern Tendencies


Retail Automation Realities
Automation in the retail industry is shifting the existing business models. So it’s a good idea to start with finding out what the new realities are.

Retail automation: demand, not an option
There's no way to compete on the fast-changing market with increased retail-margin pressure, investments in e-commerce, lack of specialists – and thus a high demand on them – using traditional cost-reduction means. That's primary why retailers are turning to automation to support and increase their profits.

- Idle automation and its reasons
Retail and consumer products executives expect automated retail solutions to increase annual revenue growth by up to 10%. Still, few retailers rush to implement them in their stores.

The reasons are all about the lack of skills, capabilities, and money. In most companies, 90% of year's capital expenditures reprise those of the previous year. And it may be too hard for businesses to break free from the tight budget circle covering hardware and software expenditures.

- No automating is losing a fight to competitors
Let’s check the famous Amazon example: they operate more than ten Amazon Go automated retail stores and plan to expand the business to 3,000 units by 2021. And Amazon isn't alone on this path. More and more companies like Walmart or Bingo Box start investing in automation and AI technologies – for the sake of their customers and employees.

For instance, Kroger (one of the US' largest supermarket chains) uses digital shelves that show prices, digital ads, nutrition details, and offer coupons. These details are updated directly from a central source, no need for local interruptions. And an eventual goal for the company is no less than moving the shelves to customers' smartphones.

- Much bigger than operations
Retail automation allows vendors to spend more time on strategic activities. Planning is often a key to success, and advanced planning systems can easily automate analytics and help with developing scenarios. In turn, this reduces the time needed for merchandise planning and decision-making.

What's more, supply chains also offer some use cases for automatic retailing. For now, Walmart and Target partnered with Swisslog, a Swiss company specializing in automation solutions for warehouses. They’re planning to build warehouses with automated case picking.


Retail is going through hard times. Growing costs on supply chain management, increasing suppliers’ demands, high competition, and rising labor costs – all that may seem too hard to overcome. Luckily, there’s a solution.

According to McKinsey Global Institute’s report, half of the activities in retail can be automated with the help of current technologies. In turn, automation for retail helps to address margin strain and meet more demanding customer expectations. And this is vital on the market that saturated.

In our guide, we’re going to take a look at automation realities, strategies, retail automation software, and most promising real-life examples. All that needed to find out if automation’s going to work, and if so – where to start.

Retail Automation Realities
Automation in the retail industry is shifting the existing business models. So it’s a good idea to start with finding out what the new realities are.

Retail automation: demand, not an option
There's no way to compete on the fast-changing market with increased retail-margin pressure, investments in e-commerce, lack of specialists – and thus a high demand on them – using traditional cost-reduction means. That's primary why retailers are turning to automation to support and increase their profits.

Idle automation and its reasons
Retail and consumer products executives expect automated retail solutions to increase annual revenue growth by up to 10%. Still, few retailers rush to implement them in their stores.

The reasons are all about the lack of skills, capabilities, and money. In most companies, 90% of year's capital expenditures reprise those of the previous year. And it may be too hard for businesses to break free from the tight budget circle covering hardware and software expenditures.

No automating is losing a fight to competitors
Let’s check the famous Amazon example: they operate more than ten Amazon Go automated retail stores and plan to expand the business to 3,000 units by 2021. And Amazon isn't alone on this path. More and more companies like Walmart or Bingo Box start investing in automation and AI technologies – for the sake of their customers and employees.

image

For instance, Kroger (one of the US' largest supermarket chains) uses digital shelves that show prices, digital ads, nutrition details, and offer coupons. These details are updated directly from a central source, no need for local interruptions. And an eventual goal for the company is no less than moving the shelves to customers' smartphones.

Much bigger than operations
Retail automation allows vendors to spend more time on strategic activities. Planning is often a key to success, and advanced planning systems can easily automate analytics and help with developing scenarios. In turn, this reduces the time needed for merchandise planning and decision-making.

What's more, supply chains also offer some use cases for automatic retailing. For now, Walmart and Target partnered with Swisslog, a Swiss company specializing in automation solutions for warehouses. They’re planning to build warehouses with automated case picking.


Another company, Ocado, works on their own Smart Platform – a proprietary e-commerce warehousing solution – planning to sell it to other retailers.
cleveroad 2 july 2019, 8:30
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