Original title: the debate on Retail Automation: robots walking in the shelves

[Lianyun.com] report on December 14 (compiled by piglets)

Threats from Amazon.Com Inc forced the staid grocery industry to try smart trolleys, dynamic price tags and in-store distribution warehouses.

Equipped with algorithms, robotic warehouses and unmanned shops, Amazon.Com Inc is often seen as a threat to traditional grocers. In recent weeks alone, Amazon.Com Inc has confirmed plans to build a mainstream supermarket to supplement its whole Foods supermarket, and the company plans to extend its automatic checkout technology to large supermarkets.

This is enough to allow old-school grocers to meet the big changes in retailing with a low profile. Spurred by threats and aware that Amazon.Com Inc is still a small player in the $900 billion US grocery market, they were eager to overtake Seattle's behemoth in innovation before it was too late.

From large Walmart Inc supermarkets to small regional chains, everyone is testing these new technologies, including robots that scan shelves, dynamic pricing software, smart shopping carts, mobile checkout systems and automated mini-warehouses behind the store. While consumers expect to see more technology in their local stores, innovation is not to dazzle customers, but to improve day-to-day operations and solve some of the thorniest problems facing food retailers.

Global competition intensifies, new and old players from everywhere enter the game

If the new technology operates on a large scale, they can slow down Amazon.Com Inc's lead, increase profits, fend off highly discounted chains like Aldi and Dollar General, and reduce the sweeping appeal of Costco and Trader Joe's. Today, only 44% of food sales go through traditional grocery stores, up from 90% 30 years ago. According to Inmar Analytics, supermarkets are locked in a war of attrition, and now they are losing ground.

Keith Knopf, CEO of Raley's, said: "the competition comes from everywhere, all kinds of players enter the game and upgrade." Raley's is a private company with 130 stores in Northern California. "obviously we have to be more alert."

To do this, Knopf recently partnered with David Moran, a former consultant at McKinsey. Historically, grocers have changed their price tags once a week, mainly in response to deals offered by local competitors, depending on any effective strategy in the past. But now shoppers can view items instantly through their mobile phones, so grocers need to pick up the pace and look forward, not backward.

Eversight partnered with brands such as Coca-Cola Company and retailers such as Walgreens for promotions, but Raley's was the first retailer to work with it on day-to-day pricing. The software analyzes millions of potential price changes across the chain, proposes several different alternatives to a particular product, such as cooking oil, and then tests it in several stores to see which works best. The winning combination will be more widely promoted.

Raley's pricing is already at the high end, so most of the tests involved price cuts, but not to the point of profitability collapse. So far, these measures have increased sales of the products under test by about 2 per cent, and in some cases profits by 5 per cent, enough to persuade Raley's to buy a small stake in Eversight.

Think and act in different ways

"We must learn to think and act differently." Knopf said.

This is not easy for the supermarket industry. Industry leaders squeeze meagre profits from bananas and bread, not through subversive innovation. In the 1970s and early 1980s, with the advent of bar codes and cash registers, truly revolutionary food retail technology finally emerged.

"retailers are risk-averse and don't want trouble," says Jeff Smith, an entrepreneur who has been selling software to large retailers for the past 20 years.

Being wary of risk no longer works for supermarkets, as can be seen from the mass bankruptcies of supermarket chains such as Winn-Dixie, Tops and Fairway Market. For traditional retailers, the benefits of automation may outweigh the risks. At a Giant Eagle supermarket near Fox Church in Pittsburgh, a five-foot-four-inch device nicknamed "(Tally) Tarly" shuttles through the shelves twice a day for an hour or two at a time, scanning the shelves for lost or misplaced items. This is one of 50 robots deployed by Tarly research and development company Simbe Robotics in retailers in the United States, Europe and the Middle East. Walmart Inc also launched a robot to scan shelves in 350 stores in the United States, which is made by another supplier, Bossa Nova.

The rise of machines

Retailers are increasing their investment in robots to improve the productivity of logistics robots.

Global food retailers lose about $325 billion a year due to shortages, according to research firm IHL Group. This is the main reason shoppers leave the store without buying anything, according to the survey, and it can take several hours of the day to manually check the shelves. Brad Bogolea, founder and CEO of Simbe, wants to change that. One Friday morning, Tarly found that Mars chocolates and some Febreze plug-in air fresheners were out of stock at Giant Eagle in Pittsburgh. Its 12 cameras can scan packaged goods in Giant Eagle supermarkets, but not fresh produce or frozen foods. At Giant Eagle, which has been deployed for the longest time, inventory has been reduced by 21 per cent.

Ian Kalinowski, the store manager, said, "the robot hasn't completely changed the grocery store. It's just scratching the surface." There's a lot more we can do. " For example, it can reduce the occurrence of one goods and two prices. When this happens, customers can get the goods for free.

Although robots in stores are hard to ignore, most groundbreaking innovations are carried out behind the scenes. Behind their scenes, some food retailers are building automated warehouses to prepare online grocery orders, eliminating the need for an expensive labor force that currently collects goods from shelves for Instacart and other platforms. The technology, known as micro-fulfillment, could change the rules of the grocer's game, saving them time and money, while providing faster services, analysts say.

At the Stop & Shop supermarket near Hartford, Connecticut, one of the first micro-logistics centers in the United States, or MFC, opened at the end of last year. In a recent renovation, Ahold Delhaize, the parent company of Dutch-Belgian Stop & Shop, freed 12000 square feet of space from the store for MFC, which is operated by the retailer and supported by Takeoff Technologies.

Through a window in the corner of the store, curious shoppers can catch a glimpse of the automated mini-warehouse where robots are busy grabbing cereal. The system can handle up to 3500 orders a week, but it is far from that. Not only Stop & Shop, but Walmart Inc, Albertson and other companies are also testing micro-logistics centers.

Micro-logistics is very promising in e-commerce, but more than 90% of food shopping still takes place in brick-and-mortar stores, where cash register bottlenecks have plagued customers for decades. Self-service checkout can speed up checkout, but there is still something wrong with the machine, forcing employees to intervene. Canadian grocer Sobeys is testing a smart shopping cart equipped with cameras and scales to weigh agricultural products at a place in Ontario. Stores have been talking about smart trolleys for years, but there is a problem: how to make them smart enough to identify every item in the store, while at the same time tough enough to withstand snowstorms and parking lots in the Midwest.

Amazon.Com Inc's checkout-free Go store is complex and expensive, with dozens of sensors and digital cameras pointing at all angles. Amazon.Com Inc envisioned opening thousands of such stores in each major city market, but after seven years of development, it has opened only 21. (Amazon.Com Inc does plan to license the technology to other retailers. This creates opportunities for other companies to develop cheaper competitive systems, including Grabango, a San Francisco Bay area start-up.

Like Amazon.Com Inc, the Grabango version of checkout-free shopping also relies on cameras installed on the ceiling, but omits the revolving door used by Amazon.Com Inc. Shopping records are recorded on shoppers' phones through mobile apps, or they can check out in the traditional way at the cashier, or even pay in cash if they want. Grabango's cameras also prevent theft, CEO Will Glaser said at an industry conference in September. Shoplifting in stores has become impossible, so the money saved can cover the cost of installing the system within a year.

The dark side of all these novelties is that they have the potential to reduce the manpower required by supermarkets. A report released by McKinsey management consultants in May found that about half of retail activity could be automated through existing technology. Retail employees privately refer to robots that scrub floors and scan shelves as "stealing workers". Retailers retort that robots will not replace humans; instead, they will allow employees to perform more less mundane tasks, such as helping customers.

Some retailers don't want robots to walk between their shelves. Brian Cornell, CEO of fast fashion retailer Target, said: "Target stores will not see robots in the short term, and human-to-human contact is still very important."

In reality, new technologies still need to be humanized. Self-help shopping does not apply to age-limited items such as tobacco and alcohol, and shoppers in Pittsburgh will soon know that Grabango will be deployed at Giant Eagle's GetGo convenience chain sometime next year. The micro-logistics center of Stop & Shop cannot pick up frozen goods and must be operated by employees alone.

More importantly, there is no guarantee that any of these technologies will perform well enough to deliver a return on investment worthy of widespread use. Twenty years ago, radio frequency identification (RFID) tags promised to revolutionize retailing by eliminating inventory, reducing theft and speeding up customer checkouts. However, this commitment did not occur because of the costs involved in universal deployment and the aforementioned risk aversion.

Still, food retailers feel the urgency. As Rob Mathews, director of e-commerce strategy at Stop & Shop, puts it, "We have to dive in first."

"the retail industry is under pressure," McKinsey said in the report. If you haven't achieved automation, you will fall behind. "

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