According to market research firm Forrester Research, more than 6% of jobs currently performed by human beings will be taken over by robots in the next five years. We all knew the day was coming when robots would become more intelligent and start replacing human beings at the workplace, especially in jobs that need to follow a set pattern or jobs that are repetitive in nature. But that day seems closer than ever with retailers like Amazon (AMZN, Financial) and Wal-Mart (WMT, Financial) seemingly on the cusp of using automation on a large scale.
For a company like Amazon, automation is nothing new. They already have robots manning their warehouses, and the company has been working for a while testing drone deliveries in the U.K. The U.S. government refused permission for drone testing, so Amazon is doing it across the pond.
How Automation can Help Retailers
Several other retailers are exploring synergies with artificial intelligence. Their wafer-thin margins force them to continually look for ways to cut costs and save money, and automation is a major channel open to them.
Walmart recently patented shopping carts controlled by robots that can drive themselves around. The world’s largest retailer is not merely looking at carts that can drive around on their own, however. They are looking for ways to expand the utility of such carts and have them step into workers’ shoes and get things done instead of just being mute companions to shoppers.
“But, Walmart's plans are bigger than cleaning up carts more efficiently. These motorized units can also potentially move containers; scan, retrieve and deliver products; check inventory; retrieve trash; and even connect with customers. And, the patent says that Walmart is not limiting what else the motorized units can be configured to do.”
- Business Insider
Walmart is not alone in this automation push inside their stores. Lowe’s (LOW, Financial) introduced LoweBots to help its shoppers. The bot, capable of conversing in multiple languages, is expected to be deployed in 11 stores, and the home furnishing giant expects the robots to improve customer experience. The bots can ask the customer about their wish list, inform them of inventory availability and even take them to the right aisle.
LoweBots can navigate themselves through the store using smart laser sensors like the ones that self-driving vehicles use, and they can interact with customers either through voice or a touch screen interface, as you can see in the image above.
The Other Side of the Coin
But there’s another point to consider here. In an attempt to use automation and robots to save money and boost their margins, retailers are walking a thin line between customer experience and efficiency. People won’t come to stores that don’t have people to help them out - that’s one of the reasons some people prefer to shop at a store rather than online.
One of the ways to deal with that potential problem is to allow automation to assist the human workforce rather than replace them. If they can use robots to enhance customer experience and bring efficiency into stores without losing that human touch that people want, they can achieve their goal of reducing costs while getting the benefit of greater customer satisfaction. But if they do it with the sole objective of cutting costs, they run the risk of fallout symptoms that may do more harm than good.
Disclosure: I have no positions in the stock mentioned above and no intention to initiate a position in the next 72 hours.
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