Are Robots The Affordable Solution In Solving OSA Issues?
It slides along the grocery store aisles, registering out-of-stocks, low stocks, price errors and misplaced items and goes by the name Tally. Tally the invention of Simbe Robotics, does the work that seems too boring, too repetitive, and too menial for humans to do, and too expensive for retailers to pay for. It can run for up to 12 hours on a single charge, record 20,000 individual SKUs with more than 96 percent accuracy, and it could become a grocer’s best friend.
Making sure the right products are on the right shelves at the right prices is basic infrastructure for the retail grocery business and is what retail execution is all about. Without that, sales drop, customers become frustrated and CPG-retail relationships suffer.
The High Cost of Counting Low-Value Items
Most of the solutions the industry has come up with regarding on shelf availability have had big drawbacks. Historically, for example, low-value inventory has simply been rounded up or down. If the shelf is empty, the person inventorying the shelf will mark it as “none.” If there are a few items remaining they’ll call it “ones” and if the shelf is full they’ll call it “tons.” This was the best that could be done before technology companies started churning out more precise methods and recognizing the value hidden in the small margins.
Employees are Not a Long-Term Fix
But having employees manage on-shelf availability is expensive. An employee has to be taken off a task helping customers, creating displays, checking people out, to monitor thousands of low-value items. It’s a poor use of human capital.
Going High Tech with On Shelf Availability
As Brad Bogolea, co-founder and CEO of Simbe said in an interview with Silicon Valley Robotics, “Manually auditing shelves using human labor is a time-consuming and costly exercise that traditionally has only about a 60% accuracy. To give some perspective on that, a small store like CVS, Walgreens, or Dollar General may spend somewhere between 20 and 40 human hours per week auditing their shelves. Tally, on the other hand, can do that auditing job in 30-60 minutes. By reducing labor costs, retailers can free up those human resources to focus on what really matters — customer service.”
Tally isn’t the first high-tech approach, but many of the others tend to be too expensive to implement across categories. Radio-frequency identification (RFID) tags that replaced bar codes on some items were superior in that the scanner needn’t be positioned in any particular way. The scanner can also read the tags from a greater distance. But they cost far too much to make to put them on low-value inventory items.
Another high-tech solution, OOS Sensors, sold as Wiseshelf or Powershelf can detect out-of-stocks by measuring the changing weight on the shelf. But they are also expensive to implement. You need a lot of pads and there can be maintenance and operating issues. If the Powershelves were able to tackle all smart-shelf issues, like those Kroger is implementing that also detect shoppers with Kroger apps when they’re approaching a particular shelf and offer them deals, that might be one thing. But just to measure out-of-stocks, they’re pricey and difficult.
Oh The Possibilities
Tally could be the answer for a lot of the current on-shelf availability issues shoppers are facing today. You only need one or two robots. They’re self-docking. The data they collect can quickly mount up to assist with predictive analytics that could virtually eradicate empty shelf issues in the future. This data could be used for planogram compliance and to track heavy and light selling periods. It could become an ideal shopper for click-and-collect. Lowe’s even uses it to help guide customers to what they’re looking for and Walmart announced they’re rolling out their own.
Robots and The CPG Field Rep Partnership
Beyond that, however, the data can be used not only by the retailer but by a CPG organization to gauge the accuracy of its authorized distribution. It could help improve supply chain operations and strategies across all categories helping the whole industry figure out the best way to get products from the manufacturer to the consumer with the least cost and friction. It can even be used by producers to do A/B testing on everything from packaging to prices.
Will Robots and AI Catch On with Retail Grocers?
Technology is changing and becoming better every day. Retailers need to think strategically about what tasks are better suited to a robot that’s great at repetition and quantifying and which are best for a human who is great at connecting with other humans. The retailers who figure out an answer for that early on are going to have the competitive edge.
Latest posts by Seth Nagle (see all)
- Why Some Grocers Are Implementing Single-Source Retail Service Providers - December 11, 2017
- Coopetition: A New Strategy To Ignite Innovation - December 4, 2017
- Using Behavioral Economics To Optimize Pricing In Grocery - November 27, 2017