Robots Saving Retail From An Apocalypse

The lights are going out at malls across the United States with more than 20 major retail bankruptcies in 2017. As of today, store closures have skyrocketed to 7,000 doors throughout the nation, affecting such iconic brands as Toys R Us, Walgreens, Gap, Sam’s Club, The Children’s Place, Hallmark, Stride Ride, Aeropostale, Wet Seal, The Limited and Walmart. At the same time, investment in retail technology has never been higher, especially robots.Retail-Apocalypse-Timeline-3.19.18A month after Walmart laid off close to 10,000 workers with the shuttering of Sam’s Club, it announced a new partnership with Pittsburgh-based robot manufacturer, Bossa Nova. The mechatronics innovator will begin rolling out inventory auditing scanning bots to 50 Walmart locations. The machines will automate the tasks previously held by inventory associates by autonomously navigating around the store to check the shelf display, inventory position, and pricing of the big box’s 200,000 items. As Martin Hitch, founder of Bossa Nova describes, “We look at the depth of the shelves, so we’re able to see whether a product is fully stocked, completely out of stock, or some level of depletion in between.” Hitch’s robot then sends an alert to a store associate to physically restock the shelves or fix the item in question.

The investment in automation is part of Walmart’s $11 billion capital expense over the next two years to better compete with Amazon and other etailers. Brick and mortar companies, like Walmart, are doubling down in their efforts to increase operating margins by reducing payroll. In addition, store planners are keenly focused on halting consumer attrition and lost revenue opportunities. In 2015, CNBC reported that inventory “out-of-stocks” cost retailers over $600 billion in lost revenue, which was up by almost 40% from three years prior. According to the study, a majority of the root causes of missed sales and bad planning was due to outdated technology and personnel laziness. CNBC claimed that “75 percent of U.S. adults have come across an unavailable product in stores over the past year… As a result, the majority of these frustrated shoppers decided to shop at another retailer or buy nothing at all.” Typically that other retailer turns out to be Walmart’s nemesis, Amazon.

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Bossa Nova’s agreement with Walmart is the first of many announcements in the burgeoning retail unmanned systems market. Earlier this April, SoftBank Robotics America (SBR), most famous for Pepper above, forged a global partnership with Simbe Robotics. Simbe is the brain child of Mirza Shah, Willow Garage alum, who founded the startup after the folding of the famed incubator. In 2015, Shah and his partner Brad Bogolea joined the HAX Accelerator to unveil Tally. At HAX’s demo day the two founders boasted of creating “the world’s first autonomous shelf auditing and analytics solution” (see 2015 article). According to their recent press release, “SBR and Simbe will expand deployments of Tally in JapanNorth America and Europe in the near future and will commercialize more broadly over the coming years.” SBR’s Chief Strategy Officer, Steve Carlin, explained, “What the Simbe team has accomplished is nothing short of remarkable. Their focus on delivering value to their clients through executional excellence is what makes them a leader in the retail operation and robotics space. We are thrilled to be able to help them broaden their reach in the global marketplace.” The “reach” that Carlin refers to is more than just a sales channel built on the success of 20,000 deployed Peppers, it is the beginning of the robotic store of the future. The joint statement further declares: “In the near future, the two companies will explore the ability to connect their robotic systems, Tally and Pepper, to further positively affect the retail experience by helping customers quickly and easily find specific products.”

osh.jpgThe first known customer service robot deployment by a big box retailer in the United States was in 2014 at Lowe’s Orchard Supply Hardware store. The Oshbot, piloted by San Francisco-based Fellow Robots, eventually morphed into LoweBot two years later. LoweBot uses Fellow’s proprietary NAVii autonomous retail service platform that uniquely combines the functions of a sales associate with a stock manager. Lowe’s website promotes the initiative as a win-win for customers, employees and store operations: “For the customer, LoweBot is able to find products in multiple languages and effectively navigate the store. As LoweBot helps customers with simple questions, it enables employees to spend more time offering their expertise and specialty knowledge to customers. Furthermore, LoweBot is able to assist with inventory monitoring in real-time, which helps detect patterns that might guide future business decisions.” The retailer has thus far rolled out 11 LoweBots at locations around San Francisco.

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The latest entry into the retail robotics space is COSY (Cognitive Operational SYstem) from the University of Pennsylvania’s GRASP Lab. Last February, COSY announced the completion of its $2.25 million seed round that included such strategic investors as Intel Capital and Safeguard Scientifics. The capital will be invested in furthering the development of its product, Scout. COSY is currently pilot testing Scout in Walgreens, specially providing “3D semantic mapping of their retail stores” to examine the in-store merchandising displays and product placements relative to the retailer’s planograms. In explaining how his systems work versus other players in the industry, founder Jonas Cleveland elaborates, “We combine machine vision with artificial intelligence to enable a robot to drive around the store and map out the store’s architectural elements, as well as recognizing all the products on the shelves.” Cleveland claims that Scout solves a real pain point for retailers, “Every single bricks-and-mortar retailer who has gondola shelving has folks who are doing this surveying task, and they hate doing it. It’s tedious and mundane. They would rather be interacting with the customer or doing another job.”

The idea of replacing “tedious and mundane” tasks is the holy grail of robotics. The problem is that half of all retail jobs (e.g., cashiers, stockers and greeters) fall into this category according to McKinsey & Company. Already close to a quarter million people have been laid off in the wake of store closures, leading the US Bureau of Labor Statistics to predict that over 7 million retail employees could be replaced by technology within the next decade. As robots roll onto Main Street, innovators are sure to face increased scrutiny by customers nostalgic for the human touch. Even Hitch recalls the early response to his robots at Walmart, “We have witnessed a couple of people walk past and just kick it.”

The impact of the retail apocalypse will be discussed on June 13th @ 6pm in NYC with Democratic Presidential Candidate Andrew Yang and New York Assemblyman Clyde Vanel at the next RobotLab on “The Politics Of Automation” – Reserve Today!



Categories: AI, News, Politics, Retail, Robotics

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