Technology has come to play a critical role in businesses of all sizes and across all industries—gone are the days of slide rule calculations and physical address books of client information. And with tech progressing rapidly these days, business operations are innovating, especially in retail.
Today, automation is one of the most transformative forces driving change in the retail industry. Consumers are demanding ever-greater convenience, efficiency, and personalization. To keep pace, retailers are leveraging automation solutions to revolutionize their operations.
But automation is a broad term, so what exactly is being automated in retail, and how is it impacting the industry?
The Power of Automation
Automation enables business executives like you to strategically utilize technology to execute tasks that were traditionally performed by humans. In the retail industry specifically, however, automation manifests a diverse array of implementations. From warehouse applications like robotized logistics and robotic assistants to AI-driven chatbots facilitating customer experiences and sophisticated self-service checkout infrastructures, automation is streamlining every facet of retail.
Enhanced Operational Efficiency
Whether it’s a department store with a wide range of products or a business that only sells clothing, efficiency is essential to any successful retail operation. Automation enables retailers to optimize various operational activities, thus increasing an organization’s overall efficiency and productivity. In fact, a 2023 report by Code&Care shows that retailers that utilize automation can save almost 10% in business operations.
For instance, repetitive business tasks like inventory management, order fulfillment, and checking out customers can all be automated. Automation also minimizes the opportunity for error, thus improving accuracy, reducing turnaround times, and ultimately paving the way for smoother operations. This empowers business leaders to free up their staff to work on more human-centric activities like interacting with customers.
Elevating the Customer Experience
The retail industry is fiercely competitive—according to an IBISWorld report, there are 3,119,178 retail businesses in the United States as of 2023. Accordingly, this has put pressure on businesses to provide exceptional customer experiences to prevent them from turning to another retailer.
Fortunately, automation can significantly improve customer experiences by enhancing various touchpoints in the entire customer journey. For instance, chatbots provide customers with varying levels of support at all hours of the day, any day of the week. Chatbots can deliver answers to frequently asked questions even if the business has already closed for the day, make personalized product recommendations, and help connect customers with human representatives as needed.
In addition, automated smart shelves are especially advantageous as they can track inventory levels and trigger restocking. This helps customers find what they need and ensures they have accurate information about product availability.
Thus, automation can help drive conversions, improve customer satisfaction, and promote brand loyalty. In fact, Code&Care’s 2023 retail report shows that retailers using automation have seen an 11% jump in customer visits, a 10% increase in how much time customers spend in the store, and an 11% increase in sales.
Cost Optimization and New Revenue Opportunities
Retailers continually face the ongoing challenge of pricing and cost control. Yet automation presents opportunities for retailers to streamline operations, reduce labor expenses, and cut back on general overhead costs. A study from McKinsey Global Institute found that automation can help businesses save up to 20% in labor costs.
Automated services also open the door to exciting “self-serve” opportunities, like gift card sales, lottery ticket transactions, Coin Star machines, and even skill games. By taking advantage of these valuable new streams of revenue, businesses can substantially improve their overall profitability.
Additionally, automation can optimize logistics and inventory management, minimizing the likelihood of stockouts or overstocking. Code&Care’s report on Navigating Retail Automation in 2023 shows that automation can save businesses close to 10% by preventing stockouts. This ensures better inventory accuracy and enables retailers to make data-driven decisions. In turn, this can facilitate and promote cost savings across the entire supply chain.
Automation Nation: The Future of Retail Is Automated
A common fear surrounding the subject of automation involves job displacement. And while automation may admittedly result in some job displacement, replacing a human is just not that simple. For one thing, the retail industry will continue to require skilled professionals to design, implement, and manage automated solutions.
Automation is creating new business opportunities for retailers across the industry and ultimately represents a powerful enabler of operational excellence. So, instead of thinking of automation as an employee replacement, retail business leaders and employees would benefit from viewing it as an essential, foundational tool with which to partner.
By embracing and harnessing automation technologies, retailers can take advantage of valuable business opportunities, such as enhancing operational efficiency, elevating customer experiences, and optimizing costs. In turn, this will help set your business up for long-term, sustainable success.
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