Automation lures retailers as labor issues linger


This story is the third in a series of key trends that will impact grocers in 2022.

To help deal with a persistent labor shortage that has strained their ability to maintain store staff and supplies, grocers are stepping up efforts to mechanize a range of essential tasks that historically were made by people.

This includes adding self-service payment terminals to stores and using automation tools that help them update prices and manage their inventory. Many of these tools have been made available to food retailers, and they’re under increasing scrutiny these days as the industry faces what appears to be a hiring and long-term retention challenge. .

But as retailers increase their reliance on proven automation solutions, they are also tackling pressing questions about the role human workers will play in supermarkets in the future, industry experts have said. .

Having employees perform tasks that technology can easily replace probably isn’t the best use of people’s time, said Gautham Vadakkepatt, director of the Center for Retail Transformation at George Mason University School of Business. “Companies are getting smarter and saying that given the new environment we operate in, let’s do this with automation and use our talented workforce in an environment that really adds value to the business,” did he declare.

Automation may be able to save retailers money and speed up customers in stores, but human workers play a vital role in ensuring that the shopping experience is satisfying for consumers. buyers, Vadakkepatt said.

“Humans have this innate tendency to be able to approach problems, solve problems, and that’s where we’ll see humans being deployed,” he said.

“I think labor shortages are pushing us into the future, and grocers are smartly using that as an opportunity for growth.”

Henry Michaelson

Co-Founder, President and CTO, Halla

A balancing act for traders

The challenges retailers face hiring and retaining workers present a compelling reason for grocers to embrace technology in ways they may not have had in the past, said co-founder Henry Michaelson. , president and chief technology officer of Halla, which provides personalization technology. to retailers.

“I think labor shortages are pushing us into the future, and grocers are smartly using that as an opportunity for growth,” Michaelson said.

Neil Stern, CEO of West Coast supermarket chain Good Food Holdings, said retailers face a complex balancing act as they navigate the labor crisis facing the industry is facing. “We have physical stores, we have customers coming in, we have shelves that need to be stocked,” he said. “I still need people to show up for work…in an environment right now that’s quite challenging” because of the pandemic.

Courtesy of Walmart

Good Food, which operates around 50 supermarkets under banners including Bristol Farms, Metropolitan Market and New Seasons Market, is dramatically increasing its use of technology to maintain its operations, Stern said. Self-checkout is an area of ​​particular focus for the company because of its ability to help customers on the move, he said.

“It’s not just an opportunity for retailers to save labor on the front-end, but it’s actually the customer’s preferred way to verify,” Stern said, noting that Good Food dedicates one worker to monitoring every four self-checkouts.

Reflecting the importance shoppers place on convenience, more than three-quarters of consumers who took part in a December survey by mobile data company Anyline said they would be more likely to shop at a store s it offered pay-per-swipe technology. Anyline is working on technology that allows shoppers who use scan-and-go systems to purchase age-restricted products such as alcohol without interacting with a store employee, said the co-founder and CEO of the company, Lukas Kinigadner.

Stern said shoppers are increasingly interested in moving quickly through stores, a dynamic that in many cases is driving people to favor automation when visiting Good Food stores. This concentration is especially noticeable at food counters, where shoppers sometimes have to wait for service, he said. Good Food is therefore setting up sandwich ordering kiosks to speed things up.

“You can say, ‘Isn’t it wonderful, all this interaction you’re going to have from us?’ but I think customers are also saying, “There has to be a better way. If I want to have a sandwich made, I’ll use an app or use a kiosk to have it made, and I just pick it up,'” Stern said.

Good Food will also test smart carts, which use computer vision to register items as shoppers pull them from shelves, in select stores this year in partnership with Veeve, according to Stern. The retailer also plans to pilot electronic shelf labels in 2022, he said.

While electronic shelf labels can help save on labor costs because they require less labor to maintain, that alone doesn’t provide a substantial enough return to justify an investment, Stern said. But when digital price displays are used to also facilitate dynamic pricing, they become much more compelling, he said.

“It’s a big use case that I think a lot of retailers are going to consider,” he said.

Stern said Good Food is also investigating technologies such as aisle-sweeping robots produced by Simbe Robotics to automate inventory tracking in its stores, but has not decided whether to pursue it.

Wholesalers, which have struggled to hire and retain workers during the pandemic, are also embracing automation in more areas, said Marco Di Marino, director of the retail and grocery division at consulting firm AlixPartners. . He cited as an example robots that can efficiently build pallets of products before being loaded onto supply trucks.

“When robots put things on the pallet, they do it better,” Di Marino said.

Permission granted by Veeve

The tough job market is also pushing retailers to look for ways to increase the efficiency of their e-commerce operations, particularly the speed with which they are able to fulfill orders, according to comments emailed by Neil Moses, CEO of Wynshop, which provides e-commerce technology to retailers.

Nearly 80% of grocers who participated in a 2021 study conducted by WynShop and research firm Incisiv said “improving picking efficiency” was at the top of their list of ways to improve profitability, said Moses.

Mike LaVitola, co-founder and CEO of convenience store chain Foxtrot, said he was looking for technology that handles repetitive tasks like order entry to improve his company’s ability to deliver products that help him to stand out to customers. Foxtrot is investing heavily in technology, an effort that includes testing computer vision-based frictionless checkout technology across multiple stores as it improves capabilities such as inventory management and personalization.

LaVitola said he wants Foxtrot staff to be able to focus as much as possible on curating its product selection, which includes a wide array of locally sourced and private label products.

“If you think of our [stores], everything on this shelf has been tested and debated…and so that means all of these products have a story behind them,” LaVitola said. “That’s really what we want our store teams to focus on.

Recognize the limits of technology

While the convergence of rapidly rising labor costs and rapid advances in areas such as artificial intelligence and computer vision have created the right conditions for retailers to embrace innovation, it also raises questions about what level of automation makes sense for grocers, said academic Saibal Ray. director of the Bensadoun School of Retail Management at McGill University in Canada.

“From an economic perspective, more and more automation is going to make more and more sense,” as technology becomes cheaper at the same time as retailers have to offer higher wages to attract and retain workers , said Ray.

At the same time, systems such as self-service payment kiosks, smartphone ordering facilities, and technology that automatically logs people’s purchases can introduce barriers that frustrate shoppers by adding friction to the experience. purchasing, even as retailers seek to remove them, Ray said.

For example, requiring people to download an app or create an account to make purchases can make shopping less convenient and potentially turn buyers away, he noted. Meanwhile, self-checkout systems can provide benefits to retailers, but they can also discourage shoppers who are being asked to do the work that store employees are used to handling, Ray added.

“The consumer does the work for self-payment and [asking], ‘Am I benefiting from it? Am I getting a cost reduction or not?” he said.

Sam Silverstein / Grocery Dive

LaVitola agreed that going too far down the technology lane can disrupt consumers’ retail experience.

“What we really want to be careful about is not just blocking out a whole bunch of technology… but fading it into the background to create a better experience for both our employees and customers,” did he declare.

In addition to helping retailers run their operations with fewer workers, technology can attract potential employees by adding a dose of excitement to retail jobs, said David Gottlieb, Chief Revenue Officer of Trax, a computer vision company that serves retailers.

“There is definitely an opportunity, when you think about these next-gen technologies, to provide benefits not only to the store as a whole, as you reduce costs and increase availability, but also to the associate and their desire to stay at work, because now you’re giving them cool technology” to work with, Gottlieb said.

Jeff Wells contributed to this story.


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