How retail automation is shaping the future of commerce
Automation is nothing new. The oldest robot dates back nearly 250 years. Businesses have been adopting various forms of machinery for decades to cut costs and save time.
However, retail automation is being adopted in modern commerce for new reasons. In the multi-channel, ultra-competitive digital age, there’s been a shift in focus to the customer experience (CX) as the key to business success, and automation is helping to facilitate this.
Two-thirds of companies are now prioritising CX over pricing and product. 73% of customers point to CX as a critical factor in their purchasing decisions. So alongside being a time and money saver, automation is now seen as a means of meeting and exceeding customer expectations. And in turn, a way for businesses to not only survive but grow and flourish.
In this post, we’ll explore the following:
- What is retail automation?
- Why automate?
- The impact of retail automation on commerce
- Key considerations
- Retail automation in practice
- The future of commerce
- Join the revolution
What is retail automation?
The term ‘retail automation’ covers any area of your business where responsibility is handed over to machines. It can refer either to software or hardware and doesn’t have to resemble The Cybermen from Doctor Who.
Retail automation can be set up across multiple areas of your business. This may include ecommerce marketing, order management or even in-store. It may be adopted for several reasons, from cost-savings and efficiencies to furthering business growth.
A survey by management consultants McKinsey showed that 66% of businesses were using automation to manage one or more of their retail operations. A growing number of retailers are beginning to realise how vital taking such a step can be.
The rise of ecommerce has saturated countless markets. Customers no longer have to rely on the contents of their local high street for every purchase. Instead, they can shop on a global level, choosing the brand that best meets their needs. Businesses are no longer in the driving seat – consumers are.
Extreme levels of competition have turned commerce into a percentage game where marginal advantages can make all the difference. Automating your business is no longer a choice – it’s a necessity.
Automation can be adopted in customer-facing settings and behind the scenes. Many of us have experienced in-store automation in the shape of self-checkout machines in supermarkets, and automation is often taken advantage of to keep track of stock levels.
Larger warehouses employ machines to pick purchased items more quickly to enable the convenience of same-day delivery. And, in its most basic form, many companies are using automation software to manage their accounts or centralise workflows between departments.
There’s a common theme running through all of these approaches. They all serve to improve accuracy and productivity levels for businesses, which, in turn, provides a better experience for customers.
Let’s do a quick comparison to illustrate this point. Imagine two fabulous websites with precisely the same product offering, pricing, and level of usability. Now let’s say website A also includes an automated Digital Assistant, but website B does not.
Such a function adds a whole extra layer to the user experience by replicating the kind of excellent customer service that one might find in-store. A Digital Assistant can be on hand for the user from the moment they land on your website.
Using data gathered from that user’s past browsing behaviour, it can help guide them to the exact product or service they’re looking for. It may do this by asking a range of simple, personally targeted questions or offer sweeteners in the form of special offers.
Looking at this example, even a fabulous website is no longer enough. The site that’s gone one step further by adding an automated, personalised solution will enjoy greater success.
The need to adapt
Businesses that can adapt quickly to changes have an edge in the current climate. Those who eschew traditional approaches in favour of agile marketing and flexible process management have the best chance of success.
Brands need to cater to their consumers’ every whim and dedicate their whole operation to providing the best customer experience possible.
Automation technology enables businesses to gather the most accurate data and personalise the customer journey, even before they’ve joined your ‘tribe’. As we’ve seen from the example above, automation is far more than just a time and money saver.
The impact of retail automation on commerce
Automating workflows can have a huge impact on all levels of your business. Below, we’ll look at how this works in practice.
All businesses have a number of processes that could – at best – be called ‘dull’. Menial tasks such as stock checks are hugely important but incredibly time-consuming for humans.
If we go back several decades, this is why the calculator was invented. It’s far quicker – and more accurate – to punch a few numbers into a device than to attempt a huge sum using pen, paper and the joys of mental arithmetic.
Think of automation as a means of process improvement as opposed to a total replacement. The digital transformation of menial tasks ensures greater accuracy by eliminating human-error. Greater accuracy provides better data. Better data informs better decisions.
Cuts resourcing costs
Given that machines can perform menial tasks in a fragment of the time it takes a human, automation can help reduce costs. As well as saving money, this can actually benefit your staff, freeing up their time to work on more creative pursuits.
As a result, you’ll likely see greater levels of job satisfaction. In turn, this leads to higher levels of productivity and staff retention, both of which are vital to business success.
To give a retail store example, automated payment counters haven’t merely replaced human workers in-store. Instead, they’ve freed up staff time. Employees are now able to spend more time on shop floors, helping to guide customers and improving the retail experience.
Redeploying a workforce in this way enables your employees to work on securing customer loyalty – something checkout staff simply have no time to do.
For those concerned by the rise of the machines, automation can actually create jobs that increase your brand’s chances of connecting with customers. It may reduce the need for human involvement in menial tasks, but you’ll be able to allocate the costs saved in those areas to create more specialist roles, which may previously have seemed like a luxury.
Automation can’t exist without humans to program them and regularly check their functioning, so there’s just one area where expert human involvement is required. And the resources saved can be used to employ people in more judgement intensive roles that will have a greater impact on business success.
You may even have the resources to employ a specialist team dedicated to quality assurance and overseeing improvements to your product and service offering. With employees executing the QA process or as full-time consumer champions, you’ll be able to bridge the gap between you and your customers and truly take your business to the next level.
In fact, the World Economic Forum has predicted that automation is likely to create as many as 58 million new jobs, with two-thirds of these coming under a “higher-skilled” category. Perhaps it’s the robots that should be concerned.
Enhances the customer experience
The customer experience can be enhanced in many ways, both online and offline. Here are a few areas where automation has its most significant effect:
Automated processes can ensure your stock levels never dwindle. Inventory is updated whenever an order is placed and alerts are sent out when inventory is low or if there’s an order issue, so that customers need never be disappointed by an empty shelf or by ecommerce stockouts.
Automation also provides data about how frequently products are ordered and the success of current shipping practices. This enables businesses to make logistical decisions for the future to engage with customer trends.
The order fulfilment and shipping process for online orders can be accelerated and its accuracy improved through automation, making for happier customers.
Tracking allows customers a real-time awareness of when orders are made, picked, and shipped. This means businesses can fix any issues and customers have a better overview of the order process.
It’s much easier to personalise a customer’s experience if you have accurate data, and studies show that 91% of customers are more likely to shop with brands that provide relevant offers and recommendations.
Ve’s software offers personalisation before, during, and after users visit your site. Using our Connected Media, you can target individuals with ads based on their previous purchasing and browsing history.
And through the Digital Assistant, you can include a selection of interactive questions aimed at finding out the specific product or service they’re looking for. Or it could include a personalised offer – money off a product, free shipping, or a bundle of products at a reduced price.
Such a tactic is of huge benefit to both parties. Brands are far more likely to win a sale, and customers save browsing time.
This automated marketing provides users with a virtual assistant, instead of the human kind they might find in-store. Best of all, the software gets better the longer you have it and as new customers become loyal customers, using machine learning to conjure up ever-more-relevant offers and product recommendations, all based on accurate user data.
In essence, Digital Assistant gets smarter with time. And you can even use the data collected to automate answers to common questions.
Customers demand choice these days and the same level of quality no matter how they contact a business.
Automation software makes it possible for every communication channel to be housed on a single platform. Customers can have the same quality experience, no matter which channel they prefer.
Omnichannel software does for customer service what ERP systems can do for a company’s day-to-day business management by organising all the necessary workflows through a central database.
Customer service agents can then deal with voice calls, social media messages, email, and SMS comms without having to switch screens. Every single customer touchpoint can be recorded, no matter how many different devices they use.
Greater levels of efficiency, reduced costs, and an increase in customer satisfaction naturally lead to more sales. More sales mean more opportunities for business growth.
In days gone by, businesses were forced to make expansion decisions based on a partial whim. Any data would’ve been accrued through manual processes. By the time such data was analysed, it may well have been out of date. Every big decision carried a considerable element of risk.
Automation enables business leaders to look at the facts in real-time and make adjustments to their systems and processes precisely when they need to happen. Expansion decisions can thus be made using hard evidence and with far less risk.
Let’s take a look at this in practice with our Smallable case study. Our analytics found the brand’s user engagement to be low, contributing to a high bounce rate onsite. Our challenge was to bring back users, and once on-site, to keep them engaged.
To establish why users were leaving the site, Ve built and analysed a comprehensive site map. Connecting this with user profiles, we then provided automated tailored messaging to optimise the on-site experience for all of their different user segments.
Users visiting the site are now served personalised product recommendations based on their previous browsing behaviour at all stages of their shopping journey.
We also introduced an email remarketing strategy, allowing users to save their basket through email and complete their purchase later.
Our solution elevated the customer experience. And the impact of such direct messaging was clear, with a 28% increase in their conversion rate.
This is a classic example of the kind of insights that automation can provide. And, with Ve, Smallable can not only see that their sales have gone up, but they can actually pinpoint the specific reasons why with our capabilities to track the effectiveness of our service.
Having real-time evidence means that any strategic decisions concerning your brand’s future can be made with the utmost confidence.
We don’t mean having laser-armed robots in your shop doorway, sadly! But security is a major concern for all businesses. Just a single online breach can compromise your entire customer base, as well as the rights of individual customers.
Whether transactions occur online or in-store, automation can shore things up in a far quicker and more secure way than running manual checks. Consider all the levels of payment card security that we go through every time we wish to make a purchase. Yep, it’s all performed by robots.
Compare this to a manual process and the time it would take for a human to phone a bank and ask a set of security questions. Machines are also far more adept at spotting potentially fraudulent activity. They can scour millions of transactions and pick out any strange patterns in just a few minutes – a process our brains are simply not wired to do.
Automation also allows software businesses to carry out regression tests reliably, cheaply, and without human interaction. These will ensure that everything is still in working order, and any data collected will remain secure.
We’ve seen the areas where retail automation can have an effect on your business. But before you start searching for robots to adopt, it’s worth considering the following:
Managing your robots
Bots still require TLC and managers aren’t necessarily the best people to carry out every required functional test and other techie jobs.
Make sure this issue is sorted before you invest in any automation. Some tools will slot straight into your existing platforms and processes, whereas others will require a degree of expertise that needs a dedicated human professional to manage.
Some software such as Ve’s Digital Assistant comes with its own management team, so the hard part of setting up, testing, and gathering data is taken out of your hands.
Build an automation team
Consider the value of adding a centre of excellence (CoE) to your workforce to focus on automation tech. Business leaders have enough to do in overseeing their enterprise as a whole.
Your centre of excellence would be a dedicated think tank, constantly reviewing your automated processes and finding solutions to improve the running of your business.
Just like software testing tools in app development, your CoE can help pick up bugs to prevent feeding incorrect data that could compromise your entire organisation.
Establishing the right philosophy
Automating areas of your business should fall under a wider philosophy of continuous improvement.
Utilising hard data can be an adjustment for some managers who are used to making big decisions based on professional instinct. Business leaders must be made aware of the advantages offered so that they’re willing to push aside their egos and past experiences.
Being transparent with your workforce
If staff believe they’ll one day be replaced by a machine, they’ll likely be demotivated. Be clear about which processes will be automated and which require human involvement. And be sure to explain the benefits of both approaches.
Finding the right tools
Shop around. There’s an automated solution for everything these days, but research is vital. You need to find the right tool for your own organisation based on what you need, your business size, the price, and how well it integrates with your existing processes.
After all, there’s no point in a start-up investing in a vast PBX telephone exchange when all they need is a small business VoIP service.
An automated solution that works for one company may be completely unsuitable for another. For example, take Marty, the Grocery Store Robot. Marty gently cruises around stores in search of product spills and other potential hazards.
He’s been a great success when it comes to reducing the number of customer falls. But he’s as much use to a retail clothing store as a petrol can and a box of matches.
With the customer experience being of utmost importance, you should seek to discover their views on your automated processes.
Of course, you’re not asking for a software review and a detection of each and every glitch and bug as you’d expect from thorough exploratory testing. And customers unlikely to know which areas of your business are robot-manned. But you can ask for feedback on the end result, and such information can help you see if your machine-led processes are bringing in the right results.
If you’re in the retail industry and are considering introducing self-scan checkout machines to your physical store, be sure to gauge opinions from your customers before you make your investment. After all, there’s no point bringing in a new device if it sees the majority of your customer base disappear in a cloud of disgust.
Likewise, for online shopping, feedback is essential to improving the customer experience. At Ve, we create personalised surveys that are triggered in the Digital Assistant based on previous user activity.
These have a far greater response rate than simply blanketing customers with a generic feedback form. With a good response rate, you’ll have some excellent data that can actually be used to improve your business.
Retail automation in practice
As we’ve seen, retail automation can be utilised across your business processes. Many of these uses occur behind the scenes, and customers will have no knowledge that robots are involved. Others – such as those found in-store – may be more obvious.
Either way, the most crucial factor is customer satisfaction. If a process makes a customer happier, they won’t care if it’s been managed by a human, machine, or a grizzly bear called Jeremy.
A brand may have several warehouses containing different product groupings. Or their product supply chain may be based across the world. There may be a range of different delivery options, such as in-store pick-up or door-delivery. And a company may offer various payment options, all requiring different verification.
Automation ensures all of these processes are linked, and there’s no need for human involvement at any stage. One digital handshake occurs after another, making for a seamless ordering process for both business and customer every time.
Automation can aid stock control on various levels. It can be set up to advise when a brand is running low on a particular item. It can also predict required stock levels in advance through analysing past sales data. Even those highly experienced in merchandising can’t compete with data-driven predictions.
Many brands are using machines both in-store and in their warehouses. US giant Walmart uses robots to scan shelves for stock numbers across many of its stores.
In supermarkets, self-checkouts have been around so long that it’s easy to forget they’re a relatively new phenomenon. Amazon Go stores are perhaps the most famous self-service example, having automated the whole of their payment process.
In truth, automated services have been around a lot longer than anyone reading this article. The very first postcard-selling vending machines appeared in London in 1883. These most recent developments are just the latest step in a long technological journey.
As we’ve mentioned, personalisation is one of the keys to providing a great customer experience. Within marketing, it’s no longer an option – personalised services, pricing offers and promotions are essential for business success. Let’s take a look at the figures:
90% of consumers find personalised marketing content “somewhat to very” appealing.
83% of shoppers would exchange data for a more personalised experience.
42% of consumers will "get annoyed" that content isn’t personalised.
The advantages of using automation across all levels of your marketing campaigns can’t be underestimated.
Let’s look at our email remarketing tool for an example. We worked with Swedish brand Cervera on automating a solution to their problem of abandoned shopping baskets.
Firstly, our software saved every abandoned basket. Secondly, a personalised email was dispatched. This included the abandoned basket, as well as product recommendations based on their browsing history.
Customers were also requested to give feedback as to why they’d failed to complete their order. This enabled Cervera to make changes to its checkout procedure to meet its customers’ needs. And make more sales of course!
Automation enabled us to fix Cervera’s checkout problems in real-time, improving their site and building relationships with customers who may otherwise have left, never to return.
The future of commerce
What does the future of commerce look like? Well, given the clear advantages automation has for both customers and businesses alike, we’re pretty certain that it’s here to stay.
It’s all about the customer experience
We can say that automation can help you make efficiencies, cuts costs, and provide more accurate data, but all these things are a means to an end. And for the foreseeable future, that end is the customer experience.
Every single interaction your brand has with a customer – even before they’ve made a purchase – goes some way towards forming their opinion of your business. Brands that invest heavily in improving the customer experience will reap the benefits with increased customer retention and sales.
Address your weaknesses
Don’t follow trends willy-nilly. Review your business processes and look at the areas that need improving. Then see if there’s an automated solution for them. Any investment in artificial intelligence (AI) should have a purpose behind it – just like hiring a human expert to perform a particular job.
For example, if you’re testing a new app, and are looking for an automated solution to replace manual testing tools after having slashed your budget for human testers, you’d want to find an automated solution that requires fewer resources.
The automation testing process will eliminate the need for dedicated staff, and provide quicker, more accurate, and more reliable results.
To give an ecommerce example, Ve built an automated solution to solve a problem that leading jewellery brand Claire’s was facing.
By monitoring their website, we observed that they were experiencing a high bounce rate on their checkout and basket pages. And checkout bounces are a far greater challenge to overcome than email bounces. This is in large part because checkout bounces are most often down to customer choice.
We introduced promotional messaging on both pages, aimed at keeping the attention of users who had made it that far. All messages were personalised, using information gathered from users’ browsing histories.
Nearly 5000 clicks followed as a result over the following 12 weeks. With the addition of more products to the brand’s range, the number rose to more than 30,000. Given such success, we’ve now expanded the solution to be employed on the brand’s ear-piercing page.
Such a case study shows the value of finding a specific solution to solve a specific problem, rather than just diving into the automation world first.
Keep a close eye on your business, but on the wider industry and your competitors too. In the ultra-competitive world of commerce, tiny changes to your processes can reap massive rewards. If a competitor gets there first, it’s easy to be left behind.
Once you’ve decided on the right automation tools for your business, don’t rest on your laurels. Track important business app metrics to improve your product. Monitor the impact of the changes you’ve made and use this data to inform your future decisions.
Join the revolution
Retail automation is already firmly entrenched in the future of commerce. As brands seek to compete in an ever-more-saturated marketplace, it’s the smartest, most agile ones that have a distinct advantage.
A retail business that’s already focused its efforts on connecting with customers at every possible touchpoint is heading in the right direction. And adopting software solutions and machines is merely a by-product of this end goal.
Keen to know more?
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