To help retailers and brands plan for 2019, Claudia Tajima and I are interviewing our Forrester peers to discover how their 2019 predictions will affect retail for our series: “Applying 2019 Predictions To Retail.”
Recently, Claudia interviewed J. P. Gownder, VP and principal analyst on Forrester’s CIO team and an expert in automation technologies. Here’s what J. P. thinks retailers and brands should expect and focus on regarding automation in 2019.
Claudia Tajima: How do you predict automation will impact jobs in the retail industry?
J. P. Gownder: There will be job losses, but there is also a lot of transformation possible to improve both existing and new retail jobs. For example, if you include quick serve restaurants (QSRs) in the mix, McDonald’s has been the forefront of using kiosks for ordering. This technology gives restaurant workers more opportunity to focus on customers but also lowers the size of the workforce, at least in the long run. Another example is Walmart using Bossa Nova robots to automate inventory monitoring. During phase one — the experimental stage, where we are today — those retail store associates are able to focus on doing other tasks: helping customers, cleaning, or adding checkout cashiers. In the longer term, as these systems become more operationally precise, we could imagine jobs going away; think of Amazon Go, which still has human employees to do things like stocking shelves but fewer and in different roles than traditional retailers.
Claudia: What business goals are retailers supporting with automation?
J. P.: Overcoming the physical/digital divide is an overarching trend we are seeing in every vertical (see our report “The Revenge Of The Atoms”). Retailers in general are pivoting to customer-obsessed, omnichannel experiences. This means being able to order online and pick up in-store or returning an item bought online to a store, so a lot of back-end automation — software, mostly — helps these processes. But this also changes the dynamics of inventory: There are carrying costs to stores for holding on to lots of products. Retailers are moving toward a world of short-term replenishment; instead of replenishing in bulk weekly, some are moving to a faster, even daily approach. All of these changes require automation and intelligence. (Author’s note: Please also see George Lawrie’s research on “The Three Rs Of Retail Robotics.”)
Claudia: How do you think retailers and brands need to adjust hiring priorities with automation in mind?
J. P.: Initially, the impact will be on the corporate side, where employees will need new skill sets and knowledge on how to work with these new technologies (see our robotics quotient assessment research for more). Retailers will need to hire people (e.g., omnichannel experts) who can trace the entire business process and execute the move from brick-and-mortar to something more holistic of digital and in-store. Managing multiple chains of automation — from pick-and-pack robots in warehouses to inventory monitoring and management to software bots that help execute supply chain management — will require new skills from employees.
Claudia: What challenges do retailers face in automating across different use cases in their business?
J. P.: The issue with analytics is true for anybody — you have data silos that don’t connect. You can send bots out to collect data and bring it back. For chatbots, the front ends are dumb and don’t do a great job currently. A robotic process automation (RPA) bot can sit behind a chatbot and execute certain tasks, such as taking on the role of an FAQ chatbot in the back end.
In terms of AI, look to a case study counting people in the Cincinnati/Northern Kentucky airport bathrooms. After a threshold of people walked into the bathroom, a notification would be sent to the nearest janitor’s smart watch to accept the task and clean the bathroom. This approach lets janitorial staff keep restrooms cleaner (especially during peak times), which improved customer satisfaction and cleanliness scores. The airport used software algorithms to solve problems, and I recommend retailers think in this way, as well.
Claudia: How will the rise of startups with more digital workers than humans impact retailers?
J. P.: Imagine you are an online-only startup retailer or brand. You don’t have a physical store to manage or employees to manage. You could have a small number of employees and become a large retailer with digital labor. While there are a lot of human skills that cannot be digitized, there are definitely areas that can be automated. These startups introduce a threat to retailers, and automation cuts a huge portion of the cost it takes to become very competitive.
Claudia: How will automation in service desk interactions change the retail industry?
J. P.: Everyone has an IT department. RPA bots can help people in call centers do their jobs better and faster by connecting all queries in the back end to respond to problems more quickly.
Claudia: Do you have any recommendations for retailers and brands looking to invest in automation technology? What should they be looking for?
J. P.: There’s a lot going on right now with physical robotics. The questions that retailers need to ask are: How brittle are these tools — meaning, how prone are they to break while in situ? And do they function in the ways that the vendors are saying they are? In terms of AI, retailers and brands must understand the multiplicity of technologies that are out there. AI isn’t one technology; I recommend you check out Brandon Purcell’s “sense, think, and act” model and become familiar with how AI can solve problems. There is lots of value in disaggregating your knowledge of AI into actual, specific technologies — like machine learning or computer vision or sentiment analysis — and becoming familiar with what’s out there and what other businesses are piloting and implementing — including in the travel, healthcare, and financial services sectors.
For more information on where the retail industry is headed and how to prepare your business, join us for our complimentary webinar events: Future Of Retail — Three-Part Series.