NEW YORK – Robotics and artificial intelligence solutions that promise to solve several inventory and labor issues for retailers were touted at this week’s National Retail Federation trade show, NRF 2020. Across the show floor, companies showed off different technology solutions, including mobile robots, aerial drones, camera systems, and integrated AI software for fast analytics.
The three biggest areas that robot vendors promised to solve fell around inventory tracking and shelf analytics (noticing when items were out of stock), planogram compliance (making sure that products were placed correctly on shelves to match a planned display), and price accuracy (making sure products have the right price on a shelf, but also to match online pricing).
In addition, several robot companies displayed their warehousing and supply chain offerings here, showing retailers how robotics and automation can support omnichannel efforts such as “buy online, pickup in store,” or how they can handle store replenishment workflows to and from distribution centers.
Here are several takeaway thoughts and trends we formulated while meeting with companies at the show:
Many companies cited research or provided anecdotes about shoppers who get annoyed when they go to a store and find that an item is not in stock.
Pensa Systems, which uses small aerial drones to provide autonomous perception for retail inventory, released data from multiple customer deployments that show “real-world, on-shelf inventory levels may be worse than long-accepted estimates.”
While many retailers strive for 98% on-shelf availability, Pensa’s data shows that it routinely averages between 90% and 96%, with out-of-stocks closer to 25% to 30%, much higher than reported by inventory systems. Additional findings from Pensa show:
- “Hidden stockouts” represent up to 30% of the problem. Pensa said these are situations where an obvious gap on the shelf is covered up by an adjacent item, or a wrong product, or where the desired product is in stock, but hidden by other products, or available in secondary locations within a store but not where shoppers would expect to find them. Pensa said hidden stockouts can account for 30% or more of all out-of-stock situations.
- Stores are understocking their top-selling products. Given how motivated retailers would be to ensure that popular products are always on the shelf, Pensa said it was surprising to find that stockout rates for top-selling products often hit between 8% and 12% at many stores.
- Less popular products remain out of stock longer. Niche items within stores can provide variety to customers, but when hidden stockouts or other distortions occur, the items appear to be in-stock and not selling, when in reality they are out-of-stock and remain undetected for longer periods. “Wrong conclusions can be self-perpetuating and supply chain practices for slower moving exacerbate the impact,” Pensa said.
- Small stores perform worse than average. Because smaller stores are stocking several items as a way to compete with larger stores and online retailers, this often leads to them more frequently running out of top-selling products, driving a higher out-of-stock rate.
The increase of “buy online, pickup in store” is making the issue worse for many retailers, said Pensa Systems CEO Richard Schwartz. “This blending raises the stakes for retailers,” he said. “Basically the worst case is if you buy online and you’re directed to go to the store and pick it up and the product is out of stock – you lose the customer for life, they’re so irate. All of the retailers are trying to prepare and tighten up their inventory as part of the Amazon battle – they need to exploit the value of having a local presence and local inventory.”
“[Retailers are] buying a solution that will allow them to change how they operate a store,” said Sarjoun Skaff, CTO at Bossa Nova Robotics. “They want to know what’s in the store so they can better allocate human tasks. They need to know the problem when the shift shows up, not for when the second shift comes in.”
In addition, inventory data knowledge can help retailers in other ways, Skaff added. “They need to become more efficient to combat e-commerce price pressures, and they need their inventory to become more accurate so they can serve as their dot-com shoppers,” he said. “By having an installed base of stores, it’s really a competitive advantage for last-mile delivery, but only if you know what’s in the store.”
New kids on the robot block
Bossa Nova, which announced at the show its plans to expand its robot deployment at Walmart to 1,000 robots through a partnership with NCR, is one of the early pioneers in this space. But more companies are coming to tackle this issue.
For example, Zebra Technologies announced its SmartSight intelligent automation system, a subscription-based service and platform that uses the EMA50 mobile robot to travel along store aisles looking for out-of-stock items, mismatched prices, and incorrect planogram setups. The company said it differs from other inventory-scanning systems by being able to generate corrective actions to store associates’ mobile computers to resolve issues in near real time.
“We believe it is the first solution in the market focused on issuing corrective actions in real time to front-of-staff store associates to help ensure that they’re taking action based on all the data that’s being collected,” said Robert Armstrong, vice president, portfolio marketing, at Zebra. “It’s not just sitting in a dashboard waiting for someone to interpret that data and then issue an action that you hope is going to happen. There’s task management workflow integration that will ensure that the associate is acting in a prioritized fashion in near real time to take action.”
In addition to Zebra’s robots, we saw the latest from Badger Technologies, which has been scanning inventory with its “Marty” robots that have been deployed in Stop and Shop, Giant and Martin’s grocery stores to detect floor spills. Tim Rowland, CEO of Badger, said he feels that 2020 will be the year when retailers take the technology more seriously.
“A few people are blazing a trail, and [other retailers] don’t want to be left out,” said Rowland. “It feels like inventory is the biggest problem that retailers are having, or the biggest problem that robotics is trying to address.”
In another location on the NRF show floor, Brain Corp was collaborating with Savioke to show a concept robot that it plans to announce very soon. The Relay mobile robot, which has been used in concierge applications to deliver items in hotels, hospitals, and other indoor locations, was modified to add a tower unit that extends out of the top of the Relay’s base for inventory scanning purposes. The smaller size of the robot may appeal to smaller stores that have tighter aisles, or are crowded with people to where it needs to utilize Brain’s autonomy software to plan a proper path around the store.
In addition to the inventory scanning cameras and sensors, the tower unit concept had a display that could be used by retailers for in-store advertisements or announcements, officials at Savioke said.
Software will likely be king
After seeing many different technology approaches to collecting inventory data, it feels like the method of data collection may not matter in the end. While robots have their appeal, other approaches, such as Pensa’s use of small indoor aerial drones, or small shelf cameras provided by Trax, could also succeed for retailers.
Even Honeywell, which uses handheld mobile computers for inventory scanning, offered up some new features to address incorrect pricing and planogram compliance. For example, it was showing attendees how new cameras and scanners can read data on low shelves or high up without needing an associate to bend down or climb a ladder. For pricing and planogram compliance, the new scanners utilize machine vision to better identify incorrect placements.
In trying to determine which approach would ultimately prevail, the answer I got most often was, “It depends on the retailer, their size, the type of inventory, etc.” In other words, it will likely be a mix of technologies for data collection.
Winners in this space, then, will likely need the best software that can quickly analyze existing inventory levels, identify mis-matched prices, scan correctly in different locations in the store — grocery aisles, produce, frozen foods, etc. — and then tie that in seamlessly into existing store inventory systems. If you thought the range of choices available on the hardware systems was vast, the number of software options is even greater.
Warehouse robots looking for new processes
Mobile robot companies that traditionally operate in warehouses as part of a supply chain or logistics workflow also had a presence at NRF2020. Whether it was to increase awareness of robotics for retailers that also have warehouse and distribution center workflows, or whether they were looking at robotics as a way to achieve omnichannel support (such as buy online, in-store pickup, or handling returns, or distribution center-to-store replenishment), robot companies had solutions available.
“This is a fantastic show to bring people who’ve just been freshly exposed to all of the possible pains – the shortage of labor, the increase in volume of the demands from their own customers, to meeting SLAs – to now say, ‘All right, how do I work over the next 11 months to make it better for next year’s peak season?’ “ said Karen Leavitt, chief marketing officer at Locus Robotics. “There are a lot of people here who are actively looking for a solution to make their businesses productive as they continue to grow.”
Locus used the opportunity of the show to announce a strategic partnership with HighJump, a global provider of supply chain systems. The partnership will make HighJump a licensed reseller of Locus’ autonomous, multi-robot solution for warehouse fulfillment, and the two companies will work to create integration tools for faster implementations for shared retail and third-party logistics companies.
The partnership announcement is part of HighJump’s plans to assist its own customers with autonomous mobile robot system integrations, which was announced late last year. John Santagate, HighJump’s vice president of robotics, said he expects to have some additional partnership announcements with other robot companies later this year.
Santagate said they started with Locus due to a shared deployment between Locus and HighJump, and that Locus has momentum in the marketplace.
“They have a technology that we see as valuable for our customer base,” he said. “We can go into our customers and very quickly identify how many customers this is a right fit for, and go collectively, as opposed to Locus and HighJump going in separately. We’re really creating a sticky partnership that allows us to go to market as a true partner instead of saying ‘We’re going to sell it, and you’re going to use a separate partner.’ ”
Tompkins Robotics used the show to announce a new partnership with Nordstrom to design and deploy parcel sortation systems to help the retailer streamline and optimize distribution operations at sites across the U.S. Tompkins’ t-Sort AMRs are able to move along the shortest route possible to sort items and packages by shipping order, destination, or service level. The fully modular system allows companies to add or remove robots without interruption or downtime, the company said.
Mike Futch, president of Tompkins Robotics, said they were also attending NRF to reach a different audience than they typically see at a show like ProMat or MODEX.
“For example, we’re primarily servicing the retail market and shippers of retail goods such as package carriers,” said Futch. “When the C-suite and executives take a look at our portfolio of products that can be deployed all the way down into the back room of a super center, or a mall anchor store, or club warehouse, it gets them excited because they can do micro-fulfillment in a different way without having to put millions of dollars worth of AS/RS equipment in the back room of that store, which also requires them to build a 20,000-square-foot addition on the building.”
“There are many people in store operations and at the executive levels that are looking for ways to optimize the supply chain because there’s a lot of individual pieces being handled, whereas before it used to be cases, and there’s a shortage of labor available to do that type of work,” he added.
In the picking space, RightHand Robotics was showing its piece-picking use case to attendees, many of which were not aware of warehouse processes or supply chain workflows.
“The robots in the warehouse storyline, which gets repeated over and over and over, it resonates with people,” said Vince Martinelli, head of product and marketing at RightHand. “They see this and they say, ‘Oh, are you guys in the warehouse?’ We’ve got all kinds of folks that walk through here and they get it more than you’d expect right away. They don’t know the details, or how things flow in a warehouse, but they seem comfortable with the idea that a robot could handle these things.”
Martinelli added that each picking was not just an issue for e-commerce companies, that store replenishment was also a big topic. “Depending on the retailer and the pain of labor costs [in store replenishment] is causing them to think about things – some of them want to automate that,” he said. “But some are focused 100% on doing their direct-to-consumer line. It varies across the companies that you’re talking about.”