This Week In Retail – The rise of the machines

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This week we look at news of differing uses of technology in retail, and some of the concerns and challenges it raises that retailers will increasingly need to face.

This week, a couple of stories about the uses of technologies within retail, and the ethical challenges they bring to the business of selling tins of beans.

Firstly, we bring you a great story about Walmart, and some of the growing pains as workers and robots work side by side together. Over the last few years, the story of the ‘beast of Bentonville’ has been a fantastic case study in a business taking the battle to the disruptor. Going back a few years, there was a view that the US was falling out of love with Walmart, seeing it being squeezed both by Amazon through its general merchandise exposure, and the discounters, through having lost its price leadership in food. Since then, Walmart have been extremely aggressive in digitising their relationship with customers (significant investment in home delivery, improving instore click & collect), as well as automating tasks in store – ensuring their associates instore only do what only humans can do. This has led to a wide variety of robots doing cleaning, unloading at the backdoor, and checking the shop floor for gaps and merchandising.

The logic would suggest that automating the mundane, whilst leaving the humans to do the more complex roles such as customer service, would improve satisfaction, however, the article explores sentiment to the contrary. Outside of some challenges with getting the robots to work, there is the broader view that it’s the robots calling the shots, sending out the alerts to staff to do tasks and dictating where the scarce resource should focus its attention. This does pose the question “for a workforce to feel like they get benefit out of automation, does it still need to feel in control in some way?”

Our next challenge is the ethical one of AI, and using it to identify shoplifters instore. VaakEye is a Japanese startup which uses AI to monitor behaviour of shoppers instore. Based on intelligence it has gathered from watching 100,000 hours of CCTV, it will ‘predict’ who to is likely to be a shoplifter and alert a member of staff. In retail environments which still have instore security, this will be done by a security guard, as part of identifying the steps within the SCONE (Survey, Conceal, Observe, Non-Payment, Exit) process before deciding to intervene. I remember spending many hours at a lectern with my security team keeping an eye out for behaviour that warranted following up, which is standard loss prevention in a sector which is seeing theft rise. However, is it ethical if artificial intelligence makes that initial call as to who to identify, with whichever conscious or unconscious prejudices it has programmed into it? Whilst that point remains for humans too, it seems we are still drawing a distinction between what we’re happy for humans to make a call on and AI. Considering the importance of brand perception within retail, and the frequency of interaction with a retailer, this may be an ethical challenge that retailers do not wish to explore.

Finally, a less controversial but equally futuristic story about the vertical farms business Ocado is investing in. Ocado is providing £17m in funding to Jones Food, an owner of vertical farms that currently supply herbs to manufacturers. They are betting that they can link their expertise in robotics and AI with the current farm operation, to provide larger scale operations that can be co-located near fulfilment centres to provide fresh produce to customers. Ocado have a real knack of automating what seems hard to automate, whilst still providing positive roles for the people who work there. Let’s hope they can transfer that across to the farm from the fulfilment centre.

Author


Nick Hoenig

Managing Consultant, Operations Transformation

Retail, with a focus on Store Transformation and Store Evolution, Proposition Development, and Landing Change in Retail

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