Robots: Coming soon to an aisle near you?

From robot sales staff to unmanned stores, automation is taking off in a big way at food outlets and shops across Asia as retailers seek great efficiency.

July 10, 2017

With a labour crunch due to rising wages and ageing populations, companies in the developed economies of Singapore, Japan and South Korea are exploring ways to make savings and achieve higher productivity. Panasonic’s RejiRobo is a newly launched automated checkout system that can scan and bag all grocery items in a matter of seconds. Softbank’s Pepper and Newstead Technologies’ XYZrobot are able to guide buyers, chat with them, answer questions, and perform other tasks expected of a sales assistant.

Meanwhile in South Korea, 7-11 launched its first smart convenience store where it is trialling a BioPay system called HandPay, which enables customers to make transactions on a pre-assigned credit card by scanning the vein pattern on their hands.

James Hawkey, Chair of JLL’s Asia Pacific Retail Board, says such technology is set to have a big impact across Asia. “This type of automation may be in its infancy now but it could soon start to replace many basic retail jobs both front-of-house and behind-the-scenes including customer service, stock locating, restocking, shelf stacking, food preparation, ordering, checkout, and delivery,” he outlines.

Singapore’s manpower shortage

The food and beverage (F&B) sector is one of the early adopters of the latest technology. Mobile apps that allow customers to order food without human interaction are becoming more popular. Taking it a stage further in Singapore, two recently launched coffee shops FoodTastic and Happy Hawkers are equipped with a self-order system as well as floor-cleaning and tray-collection robots.

“It goes beyond being a novelty factor for retailers to draw curious customers in. There’s a business rationale. Singapore is plagued by labour shortage, due to labour market mismatch, and locals tend to shun service-oriented jobs. Moreover, the restrictions on hiring foreign manpower have exacerbated the workforce shortage. Retailers have to consider the use of new technology to ensure operational efficiency and sustainability,” says Angelia Phua, Consulting Director of JLL Singapore Research and Consultancy.

Indeed, a McKinsey report estimates that 53 percent of activities carried out within the retail sector could be automated, leading to fears that robots could take humans jobs. Globally, the trend towards automation is significantly gaining traction as advancing technology means robots become a more viable option for retail businesses. Unlike humans, robots don’t get sick and don’t need to take a leave. The need for training is also eliminated.

The power of brand human

Retail jobs may be relatively low skilled but people provide something that robots can’t: the human connection. And this is still very important in retail, Hawkey believes. Providing a purely online shop or automated experience in a brick-and-mortar store for many brands can have a limiting effect on the shopping experience for consumers. “What makes traditional stores different from online shops is the employees; the judgement skills and emotional intelligence they have and the customer service they deliver,” he adds.

In many cases, this unique overall experience is what distinguishes brands selling similar items and drives repeat-buying behaviour. “While automation is inevitable, automation of a brand could lead to it being ‘faceless’ – great for efficiency and consistency – perhaps that is fine for McDonalds and 7-11 but it’s a very different story for other retail brands – especially at the higher end of the market,” he adds.

It’s a sentiment which is reflected around the world. Last year, Verint Digital released its Tipping Point report,which polled more than 24,000 consumers in 12 countries to reveal a resounding need for the human touch in today’s digital world. Four out of five surveyed say they prefer that human customer service interactions remain a part of customer service.

While automation has its benefits in reducing cost, improving efficiency and, and for now it can be something of novelty, in the end, it comes down to what the customer wants. “Customer acceptance will be the primary factor that will determine if robots will become a constant feature in retail stores, but the drive towards increasing automation is inevitable – and it’s just beginning,” Hawkey concludes.