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Prepare for the store of the future.
Walmart order picking Alphabot at Kroger automated distribution center, technology is already changing the way we shop. We order online for home delivery or we use click-and-collect to pick up items already packed in store. We even have others shopping for us: Témoin Instacart and its competitors.
But even with all of these conveniences, a shopper of the past would still recognize the shopping experience of today – taking items off the shelves and paying for them near the store exits.
In ten years, however, this process will become much rarer.
Take his place ? Micro accomplishment. The ramifications will spill over into all aspects of retail, affecting both buyers and traders.
Goodbye, basket
Here’s what it will look like: Imagine a highly experiential and engaging environment centered on multiple stores in one store. Specific brands or categories will have their own islands or kiosks.
There is already a precursor: just think of the Apple or Samsung sections that can be found at Best Buy. Now add an automated system that will pick and deliver most items upon exit. This micro-fulfillment system will become the norm.
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As a consumer, you’ll be able to touch and interact with products ranging from makeup to electronics, but you won’t be able to put them in your shopping cart – you won’t need them.
A human will educate you on the advantages of one offer over another. When you find something you like, the customer service associate places the order. In some cases, touchpads, rather than people, will give information and make it easier to operate.
Out of sight, a human or a robot will place your product in a bag. The tote will then roll up along a conveyor belt to a pickup point. No need to checkout: you will have already paid for your item online.
Listen, companies:Americans spend money according to their values.
This is where things get really exciting. Maybe after visiting a kiosk to buy, say, a camera lens, you walk around another to buy a bluetooth speaker. Micro-fulfillment systems will consolidate each item with the rest of your order, allowing you to move from island to island. Everything will be waiting for you when you are ready to go.
Already, B&H Photo Video based in Manhattan uses a system of conveyor belts and vertical elevators to deliver new cameras to customers to them before they leave the store.
It will not be limited to electronics or sophisticated devices. It applies to all types of items, from toilet paper to basic necessities to household appliances. Kids will love the mechanics. Busy professionals and busy parents will appreciate the convenience. Even those who love to sail will appreciate a new form of exploration.
In addition, buyers can save money. Smaller, more compact stores help retailers reduce real estate costs and pass on savings. Stores like Walmart can use technologies like Alphabot of Innovation Alert to get items out faster, reducing costs for himself and his consumers.
The retail revolution is coming
The lesson for retailers: Beyond the loyalty that comes with shopping in a highly tactile store, micro-fulfillment will become the reason many consumers visit.
Currently, the popularity of click-and-collect means that an employee typically selects and packages items. This work is not free. Consumers want the convenience, but they’re not necessarily willing to pay more for it.
Micro-fulfillment automation means that the economics of each order can improve dramatically. The number of units per hour that a store can pick up increases dramatically and costs go down. Jefferies Investment Bank estimates that this process will reduce costs by 75%, compared to manual order picking. Retailers can further reduce costs by eliminating checkouts.
Does your work email contain emojis? ?? You better get right to the point.
Automation is more profitable than paying others to make purchases – the Instacart model. This has the added benefit of making the store a truly engaging experience, rather than a disruptive one where armies of personal shoppers compete with consumers. Instacart is now expanding its usage plans robots to automate execution.
Retailers are already on board. The micro-realization market is expected to climb to $ 10 billion in five years, grow at a compound annual growth rate of 60% during this period, according to research and consulting firm LogisticsIQ.
Does this growing wave of automation mean people have to care about their jobs? No. While many are understandably apprehensive, we’ve learned that automating repetitive tasks with great precision has been a distinct positive for the human race.
This has allowed people to focus on parts of their work that cannot be handled by machines. The printing press, the steamboats, they haven’t destroyed jobs. They created new and better ones. The advent of computers has allowed us to more accurately manage huge amounts of information; new jobs are created daily to sort and manage it.
Micro-execution is the next step in our evolution. Robots can’t design the apps themselves – you’ll always need people to design, monitor, and maintain the systems. Overtime, automation helps economic outlook of the general population. Not bad.
What about small, family-owned stores that can’t afford to invest in robotics or automated execution? Will they become useless?
Again, no. Small hometown type retail stores focus on a fairly narrow selection of select items. They have already created an experiential environment. People don’t go to these stores because they want endless aisles of selection. They go there because they want to walk around and enjoy the distinct flair that a small town retailer can bring.
Ultimately, we all have a skin in the game when it comes to the store of the future: consumers, retailers and suppliers. A whole new shopping experience awaits you.
Prepare to enjoy the ride.
Doug Straton is Chief Digital Officer of Hershey.
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