According to a McKinsey report, 45% of current paid activities can be automated by today’s technology. It’s an equivalent of $2 trillion in total annual wages.
While most businesses start automation because of its efficiency, for retailers automation is the best way to survive.
During massive COVID-19 lockdowns, retailers had to switch online to reach out to new customers—or save existing ones.
Those who had been selling offline and online managed—at least partially—to cover the losses.
Shopping online is the new norm, and retailers have to be ready for it.
What tools businesses need to start retail automation, where to get them, and how this will affect their employees—explaining in this guide.
Retail Automation Means: Software and Hardware
Let’s start with the tools retailers use to automate their business processes. I’ve divided them into software and hardware equipment that will be used together with digital solutions.
E-commerce websites and mobile apps
Amazon, eBay, Shopify, or your local coffee bar that had to digitize their business because of massive lockdown are the best examples. They all have e-commerce websites or mobile apps for selling products and services online.
And that’s the most popular example of retail automation. You don’t need to hire salespeople or lease commercial space, don’t need to get cash registers and hire security to make sure no one stole anything from your shop.
That’s doesn’t mean everything is fully automated, though. You still need warehouse workers that’ll move and send the goods, developers that’ll watch over your website, marketing specialists that’ll promote it, customer support members that’ll take care of customers’ issues, and lots of other people.
But that’s a good point to start from.
Payment processing tools
If you’re selling goods online, you need to find a way to collect payments online.
Payment processing software connects your e-commerce website with payment systems—the most popular are Stripe, PayPal, and Braintree. This way, buyers can pay with a credit card or e-wallet right on your website or mobile app.
There are many payment gateways, so you can choose the one (or two) that suits your business best.
For example, Stripe is both easy-to-apply and easy-to-customize if you want to make the payment process more tailored to your business needs.
Or you may go with PayPal if you want to sell stuff worldwide and not worry about details.
Choose wisely (and don’t forget about their transaction fees!).
Inventory management software
Previously, we’ve talked about small to medium size retail businesses and software they need.
Now, what if your Amazon-like e-store has grown—as did its warehouse? This means you need specific software to monitor and manage the inventory.
Inventory control systems are made for inventory management—tracking goods, organizing storage, and keeping count of in-stock items.
These systems often work with barcode scanners and wireless tracking devices. Warehouse staff scans the goods, they’re added to the database.
And when customers order the last pair of those fancy shoes, the system will let you know that you need to contact the manufacturer and get a few more.
Otherwise, you may be selling goods on your website and not having them in stock.
Customer relationship management software
Or a CRM system for short. In the e-commerce sector, such systems help companies to better interact with their customers. They store users’ history of purchases, transactions, preferences, and employees can use this data to improve relationships with buyers.
CRM software is mostly focused on retention rates and the company’s sales growth.
When do companies get these tech solutions? Either buy ready-made software and customize it or order retail software development services to build a website or inventory system from scratch.
Ready-made suits are perfect if you’re only launching your digital sales channel. You get a website fast and don’t spend as much money as with custom development.
Still, if you’re running a large or medium-sized company, it’s better to make the software from scratch instead of spending money on customizing out-of-box solutions and pay for licensing.
As promised, here’s the list of standard devices used for retail automation:
- Shelf-edge labels
- Self-checkout terminals
- Shelf scanning robots
- Electronic shelf labels
- Automated retail vending machines
- Label printers & compact labelers
- Touch POS terminals
- Mobile POS
- Info kiosks
- Secure lockers
Retail Automation Strategies
Retail automation isn’t just about websites, vending machines, and self-checkout terminals. It’s always people who are the driving force of any company, and these changes are going to influence them, too.
Here’s what’s retail automation will change:
#1. The way people work
Retail automation brings new capabilities—and new responsibilities come along. People who used to work in stores or warehouses are being replaced by shelf-scanning robots and self-checkout terminals.
That means employees should be retrained to switch to other tasks like helping customers with urgent requests, checking online orders, etc.
Several grocers are already creating roles for in-store pickers and e-commerce distribution centers. For example, Best Buy is retraining employees for their new customer-services roles in its In-Home Advisor and Total Tech Support programs.
These are more companies to follow—but some may still have to dismiss their workers.
#2. Wages investments
Retail automation leads to fewer but more skilled employees—those whose time costs more.
For example, cashier makes $27,385 per year in the US (according to Indeed), while web developer’s time will cost $77,627 per year. And you’ll need quite a few web developers if you’re going to make and support a large e-commerce website or CRM system.
But many companies today still offer higher wages only when they can’t find the right person for a long time. Considering the market realities, that’s a very unwinnable strategy.
#3. Hiring strategies
Employers should pay more attention to their staff members’ comfort when making crucial decisions, like choosing the location of their offices. Or even switching to a remote model.
One-third of US workers are freelancers. If retail businesses want to hire the best specialists, it may be the time to start paying attention to skills and experience, not location.
The future of work has arrived in the retail sector. Executive managers should prepare for automation impact as well as prepare their staff members to address the workforce implications.
The longer they delay retail automation, the higher the risk they will never catch up with their competitors.
Vitaly Kuprenko is a technical writer at Cleveroad. It’s a mobile and web application development company in Ukraine. He enjoys telling about tech innovations and digital ways to boost businesses.