A pragmatic look at the technological revolution and its impact on the retail model.
From robots in the aisle to customer service bots and simulation modelling across the supply chain, Robocalypse is coming.
With the likes of Professor Stephen Hawking, Bill Gates and Elon Musk talking about the potential of artificial intelligence to change the world for better or for worse, it’s big news at the moment.
The fourth industrial revolution is coming and cognitive automation is its flag bearer. You may think that this is not relevant to retail or certainly not for the next 10 years. Well think again! Technologies that can think, learn and adapt will increasingly be part of our lives and sooner rather than later.
This is forecast to have a massive impact across a range of industries and retail is right up there. From robots in the aisle to customer service bots and simulation modelling across the supply chain, Robocalypse is coming.
So what does it all mean and what do we need to do about it? Well it’s not an all or nothing game.
Picture the scene: armies of robots operating in industrial production lines, running day and night, performing the same repetitive tasks their programming dictates as their human masters look on. No, this isn’t science fiction, but the reality of the modern production line, and a scene we’re now very familiar with.
But things are changing. Rather than sticking to purely physical tasks, smart systems are now beginning to take on more of the cognitive load. This means that many jobs that have historically been safe from the threat of automation may no longer be so.
If you think that sounds a bit far-fetched then think again. ‘Intelligent’ technologies have been playing the humans at their own game for some time now. As computers become increasingly able to take on non-routine tasks, an evolution of the work place (and the world) is set to take place. The ‘fourth industrial revolution’ is upon us. Predictions of the scale of the impact on employment vary, but they all point to a shift of seismic proportions. Recent research by Citibank in partnership with the University of Oxford predicts an average of 57 percent of jobs in OECD countries are at risk of automation (47 percent in the US and 35 percent in the UK), while China faces much higher risk at 77 percent.
As retail leaders we’re accustomed to change. We deal with changing shopping habits, channel shifts, economic and political uncertainty and disruptive new competitors on a daily basis. But all this change is expensive, frankly unaffordable, unless a step change in productivity is achieved. For a business to survive and thrive in tomorrow’s market, a new retail model, enabled by automation, is required. The future is coming fast and only the fit-for-purpose will survive.
In this paper we aim to bring some clarity to the practical application of both physical and cognitive automation in the retail model. We look at the retail value chain in some detail and provide examples of where these new technologies can be deployed. We provide some context on what is happening in other industries, debunk some myths and draw conclusions about what the technology can and can’t do. Our intent is to provide retail leaders with a grounded, practical perspective on the opportunity that the Fourth Industrial Revolution presents, and the very real risks of ignoring it.