WHY IT MATTERS: Digital Transformation

WHY IT MATTERS: warning! this article is not about your typical "robots will rule retail" or "everything has to be AI driven unless you die". Well, in some parts it is.

The reality check that retailers - and their technology vendors - must make is: retail is difficult, focused on the bottom line, with no appetite for innovation with short term results. Retail innovators must find a way to experiment while staying focussed on the bottom line.

Best quote: "‘I think the majority of the problems come from the unwillingness, perhaps the fear, of investing in something that
doesn’t automatically bring a load of cash onto your balance sheet."

WHY IT MATTERS: the scores and the ranking is not important. This list is meaningful because it shows just how broad and deep the automation has become in retail stores. Expect to see a lot of those in your local shopping destination.

WHY IT MATTERS: the acquisition of robotics for Ocado fulfillment centers could be seen as one more tech announcement. But buried in this Fortune article is this quote from Ocado CTO that summarizes the ultimate goal of grocery eCommerce: dark warehouses with robots doing all the work. 

This may sound very futuristic but in fact it is the consequence of the grocery eCommerce business model: the only way to make money is to have robots to the work that consumers do when pushing carts in the store.

WHY IT MATTERS: this is a huge step forward and a sign of the times: manufacturing automation. Fueled by digital, automation, and robots, this enables production of smaller batches economically. When this is rolled out at full scale - I assume it still requires development and lots of tweaking - we can expect retailers to shorten the time from idea to production. with eCommerce, it enables the make-to-order that was made popular by Dell computers in the late 1990s: onl;y build the computer when an order has been placed. Expand this idea to t-shirts and you can see why this new Alibaba production facility is so important...

WHY IT MATTERS: an article that summarizes many of the important trends of the retail transformation. Important note: this is pre-covid....

WHY IT MATTERS:  watch for robots to start making guest appearances in stores as covid post-pandemic distanciation come into effect - and as retailers have pressure to raise minimum wage. This report provides very good insights and examples of retailers that have already deployed robots.

WHY IT MATTERS: this diagram shows well that the next improvements will come from technologies that impact the real world. We thus will move from a digital transformation to a real world transformation. Am I already obsolete with digital transformation? *sad*

WHY IT MATTERS: once we get over the health crisis, we will need to address the economic crisis. Key supply chain technologies will offer retailers and manufacturers solutions to reduce cost and their dependency on global trade fluctuations.

WHY IT MATTERS:  robots are leaving the factory floor to enter the workplace. First stop, warehouses. This new generation of autonomous robots can carry orders from one place to another, navigating against the human and robot traffic.

See this video that I shot at NRF2020: youtube.com

See this article I wrote about this (french): e-marketing.fr

See this article on these robots: ailatech.com

WHY IT MATTERS: prepare to see robots in stores and other public areas as wage increase and labour shortage for menial jobs increase. bossanova and badger robots already deployed in stores must find their place amongst the shoppers and this article explains what retailers are trying to keep shoppers from being mean with the machines...

WHY IT MATTERS: order fulfillment and delivery is the last remaining hurdle to eCommerce. Loblaws in Canada will pilot a micro-fulfillment solution from TakeOff that impressed me last year at Shoptalk. In short, they create an automated back-store where eCommerce orders are prepared with a huge amount of automation. The question remains whether the economics is better for micro-fulfillment or if centralized warehouse fulfillment with hub-and-spoke delivery is better suited for high volume / low margin eCommerce that grocery is about. Thus this "test" by Loblaws. Note that Sobeys has decided in favor of more centralized ocado-driven automated warehouse and Metro remains with the more traditional decentralized (and manual) store-based pick-pack-deliver process. Given the low volume of orders for online grocery in Canada I remain partisan of a store-based manual approach but the economics I got from TakeOff was promising. Below additional links if you want to read more about takeoff and ocado.

- http://fmcs.digital/blog/a-new-store-experience-windowless-automated-micro-warehouse-with-hyperlocal-presence-may-be-the-future-of-grocery-shopping-takeoff-solution-suggests-this-may-be-the-case-robots-ai/

- http://fmcs.digital/blog/video-of-the-inside-of-ocados-robotic-warehouse-where-thousands-of-robots-pack-groceries-retail-robots/

- https://www.takeoff.com/why-takeoff

WHY IT MATTERS: the report is not available for free but the 42 slide summary is a great overview of key trends that are presented with observations and outcome.

WHY IT MATTERS: with baby boomer workforce retiring in massive numbers, robotic solutions to replace low skills jobs are well under way. The future of a fully autonomous robotic warehouse may be years away but expect to see more automation in coming years to augment & complement human workers that will be in short supply...

WHY IT MATTERS: with baby boomer workforce retiring in massive numbers, robotic solutions to replace low skills jobs are well under way. The future of a fully autonomous robotic warehouse may be years away but expect to see more automation in coming years to augment & complement human workers that will be in short supply...

WHY IT MATTERS: this new solution from takeoff in the US proposes to build a series of automated windowless hyper-local micro-warehouses that automatically prepare grocery orders that you can pick up quickly in your car. Listen to the video for more.

WHY IT MATTERS: warehouse automation is a major component of retail ecommerce digital transformation. As more orders go online, the speed and cost of order preparation must be reduced. Amazon has invested heavily in the field buying KIVA robots in 2014. Now other retailers, especially in the grocery field, are also moving from manual picking to automation because they have the volume. In fact, this may be a sign of the future: grocery retailers may become leaders in the digital transformation, moving away from their current position as dead last.

WHY IT MATTERS: this videos shows the inside of the new Ocado warehouse in UK. This warehouse is making its way top Canada, with Sobeys opening one soon: http://fmcs.digital/blog/u-k-s-ocado-taps-into-canadas-online-grocery-market-with-sobeys-tie-up-is-canada-mature-enough-to-have-automated-grocery-fulfillment-centers-ecommerce-robots/ 

WHY IT MATTERS: delivery is the last problem to solve to continue ecommerce growth. McKinsey explores the different delivery models for the last mile in this article.

WHY IT MATTERS: wearables offer the potential to help track our every move, providing a trove of information to improve health and work. Already there is proof that Apple watches can detect heart attacks. If this patent from 2016 by Amazon is built into a product and deployed, work productivity can improve as well. Of course this may have serious implications for privacy or work requirements, but we must get used to it. With robots falling in price and AI letting them do more and more human-level tasks, the future of work is bound to be measured much more closely than it is today.

Detailed description of the patent filing: https://www.geekwire.com/2018/amazon-wins-patents-wireless-wristbands-track-warehouse-workers/ 

Apple watch detects heart attacks: http://fmcs.digital/blog/killer-use-case-for-wearables-study-apple-watch-accurately-detects-heart-problems/ 

State of Robot industry 2017: http://fmcs.digital/blog/3m-robots-in-2020-40b-industry-they-are-used-mostly-in-autophone-manufacturing-but-we-should-expect-more-industries-to-use-them-in-near-future-stats-china/ 

WHY IT MATTERS: On the heals of recent technology deals between Ocado and Carrefour in France and Sobeys in Canada, this paper and others explain how the technology works.

HUMAN-LESS WAREHOUSE

The technology is akin to a huge vending machine, where products are stored in compartments that robots can access when required. More important is that this technology can apply to any product you can buy online, not only grocery. In fact, figuring grocery item picking is probably the most difficult product category - with 3 temperature items (room, cold, frozen) and lots of small and delicate products (think tomatoes and meat). This will help reduce the cost and errors of web order fulfilment, and potentially speed delivery to make 1hr delays possible. When coupled with robot manipulation and self-driving delivery vans, the days of human-free order preparation and delivery is fast approaching.

RETAIL ARMAGGEDON

This will revolutionize the way we think of retail and distribution by making the store useless. The value chain will become produce-warehouse-home.

https://www.theengineer.co.uk/grocery-4-0-ocado-reshapes-retail-grocery-with-robotics-and-automation/ 

https://www.youtube.com/watch?v=iogFXDWqDak 

WHY IT MATTERS: robots are moving out of the factory floor to invade all other spaces - from parking to retail stores. Here a great example of a robots to handle a routine and very important task for retailers: identifying what is on store shelves so as to minimize the out of stock items and mapping store layout for order pickers (every store is different so picking items is often a nightmare). Of course, this will impact jobs - even though Walmart says it won't.

WHY IT MATTERS: robots will soon replace humans in Amazon warehouses, as there are already 45000 kiva robots and growing. Moreover, the tasks that robots can perform is expanding and Amazon is pushing the limits of what's possible with this annual robotics challenge. 

Also see

- Economist story http://econ.st/2yO8n90 

- projections that US manufacturing jobs will continue decline while robots growth at an accelerated pace http://bit.ly/2yOFhWO 

- PWC estimates that robots will replace pretty every human worker in every industry https://pwc.to/2yQ270n 

WHY THIS IS IMPORTANT

We think of robots as fixed machines that assemble cars. However, with the advances in autonomous driving we may see an explosion of delivery robots. We have seen experiments with the use of drones to deliver products (Amazon and others) and now we are seeing self driving robots appear on the streets as it is much easier to get permits for those than it is for flying objects that can crash and hurt people. This is important because delivery remains the Achille's heel of eCommerce (slow, expensive): whoever cracks this problem and comes up with a low cost and economical solution will make a killing.