The retail landscape continues to face key challenges around inventory management and accuracy where enterprises are looking towards automation to drive productivity. The lack of accurate inventory management and stock availability has cost retailers sales and consumer satisfaction in their in-store shopping experience. As a result, manufacturers have designed autonomous mobile robots (AMRs) to streamline shelf-scanning, restocks, and cycle counting within the four walls. While robotics are still emerging solutions, Walmart was an early adopter for in-store robotics integration, piloting robotics deployments in over 500 of its store locations across the US to address in store stock counting, planogram compliance, pricing accuracy, and spill hazard avoidance. With the challenges of consumer perception of in-store robotics integration in the US and stronger inventory information gained from ecommerce operations, however, Walmart has elected to end its in-store robotics pilot program.

Ending its contract with Bossa Nova Robotics, Walmart plans to go in a different direction for in-store operations. Beginning its pilot program in 2017, Walmart had since deployed AMRs in over 500 store locations in order to streamline shelf scanning, cycle counting, and restock applications. Leveraging machine vision and AI technology, these AMRs aimed to reduce time spent on inventory management that occupies hours of store associates time daily and free store associate time for higher value tasks such as customer engagement. The coronavirus pandemic, however, has significantly reduced in-store traffic and increased store associate task availability where Walmart has found that human associates can achieve similar shelf scanning efficiency as these robots. While Walmart did experience improvements with robotics deployments, the company did not see strong enough expansion in revenue and other key retail metrics to justify the continuation of the program. As ecommerce sales have surged for Walmart this year and more store locations are acting as fulfillment centers as result, the increase in workers picking items in store for online order fulfillment has strengthened their inventory accuracy metrics, giving the company stronger data on stock availability. In this sense, more employees managing aisles to fulfill ecommerce orders is creating a new information channel about product availability and shelf inventory, that has shifted the value proposition of robotics integration in store: AMR deployments take time to adapt and learn human workflows, which can create a long and challenging road to a ROI. Additionally, Walmart was concerned with the negative consumer perception of robots deployed in stores as well as unenthusiastic employee reception to robot integration. Thus, Walmart aims to capitalize on its surging ecommerce strategy: the company plans to continue on increasing in-store availability and has plans to convert four of its store locations to ecommerce fulfillment centers to better support growing direct home delivery. Moreover, Walmart plans to continue deploying robots for other applications such as floor cleaning, hazard spill avoidance, and inventory unloading.

Therefore, the pandemic has strained in-store automation investments as retailers shift focus towards bolstering ecommerce distribution networks, causing the need to rethink in-store robotics deployments. This end of robotics contract between Walmart and Bossa Nova has significantly affected the robotics company, laying off nearly half of its workforce to streamline its operation during the pandemic, which highlights the volatile state of in-store automation investments in the near future. The pandemic has caused several retailer bankruptcies, and accelerated ecommerce omnichannel fulfillment, which has clouded in-store automation investments in the short term as store associates have more task flexibility with lower foot traffic. In-store robotics deployments still face key challenges: overcoming consumer perception of robots while shopping and employee reception to robotics integration taking over workflows are among the top hurdles for robotics manufacturers as well as the high capital cost to robotics hardware and installation. As a result, robotics deployments must become less invasive to shopping workflows and create easier deployment access through subscription financing models. Consumer perception is perhaps the greatest hurdle to in-store robotics integration and a key underlying factor for why Walmart ended its robotics contract: US shoppers in particular view robots in aisles as impeding their in-store shopping experience where robotics deployments lacks mainstream cultural acceptance. This consumer perception on robotics is regional, however, as several Asian-based stores have adopted robotics integration: for example, a café  in Daejeon, South Korea is leveraging robotics baristas in order to automate coffee making and enforce social distancing requirements. Additionally, FamilyMart in Japan is piloting robot deployments in-store across 20 locations for stacking sandwiches, drinks, and ready meals on convenience store shelves. Clothing retailer, ADLER also has deployed inventory robots across 40 of its store locations in Europe in order to streamline inventory cycle counting and restock management. Thus, while Walmart ending its robotics contract for shelf scanning operations is a setback for robotics integration in-store within the US, varying cultural dynamics and consumer acceptance regionally present opportunity for robotics investments across the globe.

In this sense, enterprises have focused automation investments on the backend in order to streamline ecommerce distribution. AMRs have seen stronger deployments in warehouses and distribution centers in order to automate batch sorting, picking, and product transportation across facilities. Robotics have played a strong role in enabling enterprises to adapt to growing ecommerce demand, to create contactless workflows, and to streamline output productivity. For example, UK based online grocery company, Ocado recently acquired robotics companies Kindred Systems and Haddington Dynamics in order to automate the picking and packaging of groceries. In addition, Amazon continues to lead in automation investments, acquiring Kiva Systems in 2012, the company has automated a majority of its warehouses and distribution centers with robotics integration. Beyond mundane task automation, Amazon has sought to augment its workforce through robotics integration: Amazon’s automation project, Hands off the Wheel has paid dividends in freeing up higher value tasks, such as the creation and development of its Amazon Go store strategy. Thus, this highlights how robotics automation does not necessarily equate to the elimination of manual labor, but rather how the most successful enterprises are leveraging robotics to automate mundane tasks to free associates for innovation and business development. Moreover, robotics automation is more than a cost savings strategy that can improve margin profitability: the integration of robotics can both streamline labor productivity and enable human associates to focus on higher value projects. As the pandemic has no tangible end in sight globally, enterprises require dynamic inventory management capabilities; heighten supply chain visibility and product traceability, and stronger contactless operations in order to succeed where robotics can add a strategic advantage in automating operations. Furthermore, as robotics hardware becomes smarter with the integration of AI and the pandemic shifts order fulfillment increasingly towards delivery, the value-proposition of robotics has increasingly shifted towards strengthening backend operations.

To learn more, view the 2020 AutoID & Data Capture Research Outline.