Posted by Ritukar Vijay, Chief Executive Officer Ottonomy
Retailers are feeling the heat from rising labor costs, and are increasingly looking to automated solutions to lower labor costs.
According to a Feb. 28, 2022 story on The Wall Street JournalUS retailers spent 4 percent more cash on labor costs in the fourth quarter of 2021, compared to the same period in 2020.
Big brands like Target, Costco, and Walmart are raising wages above the $15 minimum wage to secure the employees they need to stay competitive. For retailers, restaurants, and other consumer-facing businesses, the wage growth problem stems from a growing problem—not enough workers.
A persistent labor shortage is thinning the ranks of potential employees (there are an estimated 10.9 million jobs going on). vacantas of February 2022).
This forces retailers to significantly increase wages, which can lower bottom line revenue.
An opportunity for ‘last mile’ delivery bots
Enter robots, which retailers and restaurants are leveraging to reduce labor costs and keep revenue streams flowing.
According to a recent poll from RetailWireNearly 25 percent of retailers already have robotics solutions running in their premises. Almost half say they will be “involved” in robotics within the next 18 months.
One area of booming growth is in delivery bots, particularly in the burgeoning business-to-consumer (B2C) market.
According to Fact.MR, a market research firm, the global autonomous last-mile delivery market will grow at an annual rate of 19 percent through 2031. Demand and technological advancement are the drivers driving the growth of automated delivery.
“In recent years, there has been a rapid increase in demand for independent last-mile deliveries,” Fact.MR reports. “The market has experienced significant expansion in recent years due to developments in delivery systems technology. The market expansion can be linked to the increasing use of autonomous vehicles to deliver goods without the need for human intervention.”
“Moreover, the growth of the e-commerce business has led to improved delivery methods, resulting in better and more efficient products, which is fueling demand for independent last-mile delivery.”
Areas of growth in automated delivery
The B2C automated delivery market has seen a great deal of growth in the past few years, which has led to increased usage among apparel retailers and restaurants. Pickup and delivery options have also resonated with the public, with automated deliveries averaging around $5.3 billion in revenue each month.
These automated delivery tools are experiencing the highest levels of growth.
Pickup from the curb. The roadside pickup market accounts for nearly a third of automated delivery options. Companies like Walmart and Albertsons have deployed small, automated kiosks for their customers.
The process is easy and efficient for customers – all they have to do is drive up to the kiosk centers, click on an icon, and a bot will appear with their order within a few minutes.
This scenario is specifically designed for retailers, who can avoid having to pay human workers to move across parking lots in inclement weather to deliver products to customers, leaving more time for these workers to fill orders and attend to customer needs.
In addition, automated roadside pickup has a significant advantage over robot-based last-mile delivery—time. Due to regulatory mandates across the United States, last-mile delivery automation will take two years or more to meet government operating standards.
There are no such mandates and restrictions on the dock, which can be expanded immediately.
Easier and more accurate data collectionWith the overall increase in the number of B2C deliveries of the retail industry, companies like McDonald’s are turning to advanced data collection and analysis to gain stronger control over delivery performance.
With automated delivery, data is collected efficiently, thus enabling retailers to measure, analyze and identify areas where deliveries can be improved.
In addition, bot delivery technologies provide companies with data tools to improve other areas of the customer experience, such as customer service, company branding, and inventory product acquisition.
Massive deployment of B2B bots: As consumer delivery automation shifts from business-to-business mode, retailers have made a huge investment in robotics, powering 150,000 – all focused on fast, safe, and efficient automated delivery to consumers.
Online purchases picked up at the retail location: Shoppers are increasingly comfortable ordering products online, then going to a physical retail location to pick up the product — without once engaging with an employee.
Retailers use robotic parcel systems to order, store, and deliver to customers in the store, whenever that customer wants to pick up the goods.
Retailers such as Zara use bots to “personalize” the consumer’s ordering and receiving experience, allowing shoppers to get products in-store within a few minutes, intuitively and easily, for both store team members and customers.
Normalize the customer delivery experience: The retail automation experience is not fully complete until the customer has shopped and paid for an item without human interaction.
This is where customer-centric bots are changing the retail game.
Since bots are able to order, pay for, and collect products without human assistance, this circle closes. For example, retailers like Walmart are finding that customers love the ability to collect their food, drinks, and dry goods using a console-based ordering code, and then have a robot pick up groceries and deliver them to the customer at the store’s “pickup towers.”
When “easy,” “fun,” and “effective” are the terms shoppers use to describe their shopping experience in your store, you know your investment in bots is really paying off—and that’s exactly what’s happening with fully automated, customer-facing bots in action. .
do not come back
Retail delivery bots have arrived, and they’re here to stay.
Industry decision makers see how the retail industry has evolved over the past years and how customer-focused bots are building brands, making money, and dramatically improving customers’ shopping experience. No doubt they like what they see (as do the customers).
What’s really impressive? The retail robot delivery revolution is just beginning.
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