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How Will Automation and AI Affect Retail?

“We’re fascinated with robots because they are reflections of ourselves.”

The quote above is attributed to Kenneth Y. Goldberg, an American artist, writer, inventor and researcher in the field of robotics and automation. Additionally, his credentials include his position as professor and chair, Industrial Engineering and Operations Research Dept. at the University of California, Berkeley. And I think the quote also serves as a stepping stone for a big question retailers have:

How will automation and artificial intelligence affect our business model?

Clearly, this thought is on the mind of many retail executives. Eighty-seven percent of retailers plan to increase the use of artificial intelligence (AI) in customer engagement in the next 24 months, according to a study by Linc. Sixty-eight percent of retailers plan to use AI to route customer service requests, 52% will use it to help track packages, 43.5% will use it for product suggestions and 42% want it to handle returns and exchanges in the next two years.

“The data provided by this survey is a clear indicator that the time is now for retailers to take action,” said Luke Starbuck, Linc’s vice president of marketing. “Sitting back and waiting to see what others do is not a defensible strategy and will not yield favorable results. Retailers need to act quickly to adopt AI technologies that will help them win and retain customers.”

Some companies are already embracing this change in retail. Just today, we reported in Today in Food that Schnuck Markets will begin testing a robot to check for out-of-stock items and verify prices. The robot will roam the aisles at three stores in Missouri as part of a six week pilot test, and will detect product areas that aren’t fully stocked to be shared with store management staff so the retailer can make changes, reported St. Louis Post-Dispatch (July 26). Previous stories we’ve run include information on other companies making the leap, and this is happening across the food world, from farmers to foodservice outlets to retailers, alike.

Retailers and brands understand that emotion is an important aspect of customer connections, but technology does not inherently hamper efforts by a brand to build a bond, according to a report from Forrester Research. The agency found that live-person sales and self-service kiosks both elicited a 60% positive interaction. However, the report found that automation doesn’t necessarily result in customer loyalty, reported MarketingDIVE (July 19).

I wish that the answer to this question was more easily attainable. In the early going, it appears customers are not afraid of automation, but the current model is a hybrid that includes both human and robotic interaction. Consumers are becoming used to the idea of drone deliveries and the increased efficiency that goes alongside automation would likely be a boon for customers, but with so many moving parts, only time will tell how the market reacts to the introduction of AI and automation in the retail industry.