The Retail Practice at Edgar, Dunn & Company has consistently emphasised that retailers must focus more on building the overall customer experience, as consumers no longer think just about the product itself, but how they purchase it. The customer experience is part of the overall product. As a result of the global pandemic, many brick-and-mortar stores around the world were forced to close their doors for the majority of 2020. Retailers have been forced to re-think their customer experience in a very different world.
In this article, Edgar, Dunn & Company’s Retail Practice takes a look at the use of robots as an approach to introduce new customer experiences and encourage innovative customer journeys.
The overused term “Retailtainment”, meaning retail-entertainment, is a way for retailers to improve their customers’ experiences, by interacting with shoppers in a 'gaming' and 'fun' way, to propagate the retailer’s brand messages and sales promotions. Retail-entertainment uses fresh and innovative deployment of in-store technologies, such as the use of robots. We have already seen that robots have been successfully deployed in the Far East, such as Japan, a market that leads the world in the field of robotics, through a well-established research & development.
There is no doubt that robots in retail will be able to capture more data about the products on the shelves and customer buying patterns, which will increase the accuracy in inventory management. Here, we are not talking about robots in the warehouse, robots in fulfilment centres, counting inventory, or packing goods for customer deliveries. All this is relatively invisible to the everyday shopper. But what about customer-facing robots in-store? The real question we want to ask is how can robots help consumers shop better?
We predict there will be four areas where robots will impact the design of the in-store customer experience:
- Customer services and navigation
- Touchless click & collect
- Self-driving shopping carts
- Last-mile fulfilment
1. Customer service and navigation
Customer service is an obvious area where retail robots should be able to free up workers from routine tasks - giving customer services more time to interact with customers. With a robot in hand to point customers to the right aisle, asking where the Nduja is kept could become a thing of the past. Or in the many grocery stores, robots could even walk consumers directly there. Customer services are typically located in a fixed location in the store. Robots that are able to answer basic questions can be mobile and deployed across a large store – ideal for those questions that pop into the customer’s mind and don’t wish to find the one customer services desk at the start of their shopping journey. It’s common to generate high individual touchpoint satisfaction – such as the customer service desk, but the end-to-end customer journey can still score low. Modern omnichannel retailers acknowledge that it’s not enough to measure customer satisfaction on any single touchpoint. What matters is the customer’s experience across the entire journey – and robots may be the answer to address this issue.
Navigation in a large shopping mall where there may be several hundred stores, or around a single hypermarket with over 60,000 different stock keeping units (SKUs) can be bewildering for many shoppers. Australian supermarket giant Woolworths recently initiated in-store robotic trials to make their operations more efficient and cut costs. The robot is tasked to move through the store’s aisles, locate any potential hazards, and alert staff members. While they are not customer-facing robots as such, they are deployed in-store amongst customers. Edeka, the German Supermarket chain that has more than 4,100 stores, was the first in Germany to use a humanoid robot as a COVID-19 measure. The Robot, named Pepper, reminded customers to practise social distancing.
Margiotta, a family-owned, upscale food-and-wine chain based in Scotland, thought it would be fun to test out a robot assistant in one of their locations. The robot Fabio, with software developed by scientists at Edinburgh’s Heriot-Watt University, was stationed at the door of the Edinburgh Margiotta store, so that he could greet shoppers with high fives, food samples, and helpful directions to products. Unfortunately, Fabio got fired after only a week. Why? Customers seemed to be actually avoiding him. Fabio, supplied by SoftBank Robotics, couldn’t move well enough to direct customers to products and would sometimes give customers incorrect or inadequate information. He even offered up unwanted high fives and hugs to some startled shoppers, which made many customers uncomfortable.
2. Touchless click & collect
Robots are making the collection part of the click & collect customer journey fully automated. Arctan, for example, from the Polish company Retail Robotics, is a click & collect solution for grocery retailers. Another robotic solution from Estonia’s Cleveron allows customers to drop off and collect parcels without any human assistance. The Cleveron robot offers two temperature zones, one for perishables and another for frozen goods. These fully automated solutions allow customers to collect their groceries by scanning or entering the order code at the console, after which the robot will present their order at the pick-up point. They are gradually starting to appear at some of the leading grocery retailers, including Walmart. There are now over 1,600 of these click & collect ‘pickup towers’ at Walmart.
Robots are not just being deployed for grocery click & collect, but has been closely followed by the fast-fashion. Zara, the fashion store owned by one of the world’s largest fashion retailers, Inditex, is rolling out robot technology to stores for its own automated click & collect solution. One-third of Zara’s global online sales are picked up in their stores, and it is clear that robot technology will reduce the operational cost of click & collect.
3. Self-driving shopping carts
LG has a smart-cart robot that features a barcode scanner. This enables the robot to check prices and display users' shopping list on a screen. Another ‘smart-cart’ is made by the American company, Caper. Caper has a touchscreen monitor, built-in barcode scanner, and payment terminal located right at the customer’s eye level in the space, where you might typically find a child seat. Caper is rolled out at Sobeys, one of the largest grocery chains in Canada. This partnership, announced in October 2019, makes Caper the first independent automated checkout company with a live commercial deployment with a major retailer. Caper Smart Carts allow shoppers to skip checkout lines while enabling a highly engaging, fun, and fast way to shop.
4. Last-mile fulfilment
The real multi-billion-dollar problem in retail is the last-mile fulfilment. Automated delivery, self-service pick-up, drone delivery, real-time parcel tracking, and automated vehicle loading systems are expected to experience a further boost in investment to respond to the continued global growth of e-commerce. Coles, the Australian supermarket adopted robots in an effort to overhaul its grocery home-delivery service, and provide customers concerned about in-store social distancing with alternative non-contact options. Self-driving cars are clocking up the miles and self-driving robot couriers are expected to automate the last-mile delivery and parcel handover from a courier to a client. This helps to manage the growing e-commerce parcel volumes more effectively and make the last-mile delivery extremely convenient for the consumer. Several companies are developing self-driving couriers – and we are diligently keeping an eye on how the last-mile fulfilment is changing.
Future of retail robots
The return on investment has to be worthwhile, yet measuring the progress of in-store robots can be tricky. One should have a thorough knowledge of key performance indicators to evaluate the customer experience success. With newer technologies, you can measure real sales lift and realise the investment in robots, however, where it can be really complex is when comparing different in-store technologies.
By far, grocery retail showcases the highest potential in terms of implementing customer-facing robots, followed by general retail stores, such as fast-fashion and speciality, where click & collect customer journeys are more commonplace.
Based on Edgar, Dunn & Company analysis, by 2025, 80 of the world’s largest 250 retailers will deploy, or at least consider implementing customer-facing robots within their physical stores. We estimate that the total number of deployed customer-facing robots will be 250,000 to 350,000.Retail innovators are rethinking their brick-and-mortar stores to showcase products and give consumers an opportunity to experience new offerings. Customer-facing robots are paving a way towards greater innovation, which will optimise inventory management, enhance customer journeys and improve the customer experience.
The content of this article does not reflect the official opinion of Edgar, Dunn & Company. The information and views expressed in this publication belong solely to the author(s).
Beatrice Sava, Business Analyst based in the London office, provided additional research and analysis for this article.