The latest news report in Reuters.com revealed retailers are using robots to improve efficiency – as part of investment in automation technologies.
Primark is using automated cranes and driverless vehicles to stack clothes at a vast warehouse in the southern Dutch city of Roosendaal for its stores in France and Italy.
The warehouse, which spans the size of over 15 football fields, reduces the need for extra sites – and workers – leading in time to a lower cost base.
Retail has been slower to adopt automation than sectors such as autos and electronics. But Retailers have started making investment in areas such as the introduction of basic self check-out tills in stores to the use of robots and AI in supply chains.
Global installations of industrial robots grew 31 percent in 2021, while sales of service robots rose 37 percent, with the retail sector a significant driver of both, according to the International Federation of Robotics.
Mark Shirley, head of logistics at Irish-founded Primark, said the 25 million euros ($26 million) investment in the Roosendaal site’s automation would deliver an 8 million euros per year benefit from year four, in addition to savings from not having to lease another warehouse.
He estimates the use of automated cranes rather than manual fork lift trucks has increased the site’s efficiency by 80 percent.
The use of autonomous vehicles means the company no longer has to compete in the extremely tight Dutch labour market, a challenge felt in many advanced economies.
He estimates the retail industry is 40 percent automated, but sees that jumping to 60-65 percent over the next three to four years.
The march of the robots can be seen in fashion stores and food shops as an industry that employs millions grapples with the cost of rising wages, energy and raw goods.
Amazon, the world’s biggest online retailer, warned that shopping budgets were tight, particularly in Europe.
Carrefour, Europe’s largest food retailer, is aiming to cut costs and simplify its ranges.
Tesco, Britain’s biggest retailer, has accepted a hit to its profits.
In clothing, Zara-owner Inditex has been hiking prices to counter soaring costs.
Primark-owner AB Foods said the low-cost fashion retailer would limit price increases, despite inflation hitting double-digits in many of its markets, because customers could not afford to pay any more.
That makes automation even more important.
While processes at online retailers are largely automated, vast parts of a traditional retailer’s operations are still carried out manually, according to consultants at McKinsey.
“We’re at a stage where technology is getting better and cheaper and the case for automation in some of those areas just becomes much more compelling,” said Anita Balchandani, who leads their consumer practice in Britain.
McKinsey expects fashion companies to double investment in technology from 1.6 percent to 1.8 percent of their revenue in 2021 to between 3.0 percent and 3.5 percent by 2030.
It says those fashion brands which fully integrate digital processes could cut by half the time it takes to get a product to market. That in turn could lead to an 8 percent rise in the sales of full-price goods, and a 20 percent drop in manufacturing costs.
Those same forces are driving automation in the food retail sector, with companies investing in cleaning robots, electronic shelf edge labels, and in technology that helps them understand real time stock levels and manage replenishment.
British online grocery pioneer Ocado is selling its automated warehouses and lightweight robots to retailers in the United States, Europe and Asia, hoping to eventually automate the entire process from farm and factory gate to a shopper’s fridge.
At the Walmart owned Sam’s Club chain in the United States almost 600 robots developed by Brain Corp both clean store floors and scan shelves to check stock levels and prices.
“Retailers are saying robots are the future,” Michel Spruijt, Brain Corp’s chief revenue officer, said. The shift could free up workers from tedious tasks. His company also provides robotics for Schnucks, Kroger, Carrefour and Albert Hypermarkets.
