The Complete Guide To Retail Automation

Did you know that about half of the activities in retail can be automated using existing technology? And that’s not just some random estimate. It’s a result of a broad-based research initiative on automation across sectors conducted by McKinsey Global Institute.

If you’re running a retail business, you probably have felt by now the gradually increasing pressure in the industry. Raw material prices are increasing. Labor costs are rising. Customer demands and expectations are changing. Managing supply chains is becoming more challenging.

The traditional ways of reducing costs while maintaining a profit, like passing on costs to customers, just aren’t very effective anymore. The retail sector has already become hypercompetitive. As retailers struggle to survive and adapt, they increasingly pursue automation to deal with many problems.

Retail automation is about using software and other technologies to quickly but accurately complete repetitive tasks. It can improve operational efficiency and save your retail business money. It can help enhance customer experience, minimize human errors, and scale your business.

Let’s dive deeper into retail automation.

What Is Retail Automation?

Retail automation refers to the use of technologies to automate manual processes. It enables retailers to unlock enhanced efficiency, improved customer experiences, and cost savings. Given the benefits, it’s no surprise more retailers are pursuing automation.

But automation is more than just a rising trend in the world of retail. As previously mentioned, it is also a means for retailers to survive and grow in this ever-competitive and fast-changing market. It is now becoming a requirement rather than an option.

Furthermore, the big players in retail are already adopting automation technology. Amazon has Amazon Go, which is a partially automated store. It is cashierless, and customers purchase products using a self-checkout station. It has already been around for a while, but it’s still a good example of automation in retail.

Since retailers are already implementing automation, not adopting this trend may put a retail business at a disadvantage.

But why would a retail business hesitate to implement this technology in their stores?

One probable reason is the lack of sufficient funds. Retailers must cycle their budgets, and automation solutions do not come cheap. And with the increasing cost of almost everything, retailers may find it hard to have enough money to invest in necessary automation hardware and software.

Aside from budget restrictions, skill gaps can prevent retailers from adopting automated retailing. While platforms like electronic shelf-edge labels, shelf-scanning robots, and self-checkout terminals automate some tasks, human intervention is still necessary. Companies still need people to ensure all those tools function properly. Regardless, retail automation is likely here to stay.

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6 Benefits of Retail Automation Your Business Should Know

1. Improved Operational Efficiency

No matter how talented and skilled a person is, one can only do so much. In addition to limited productivity, manual retail processes tend to be prone to human error, which can result in waste of valuable resources. In the end, your team will have to put more effort into the process to achieve the desired output.

And that isn’t what efficiency is all about. Efficiency is being able to achieve better results with less money, time, and staff resources.

With increased rents, declining store traffic, and higher wages, retailers must increase efficiency. Stores must find ways to do more with less. And retail process automation can be a key.

The best retail business software can help improve your operational efficiency in various ways. It can reduce the number of steps necessary to complete a task. It can minimize the risk of human error. You can streamline services, and your store will be able to offer fast order and return processing. With automation, you can also keep your business operating even when everyone is asleep.

2. Lower Costs

Using technology to handle repetitive and time-consuming tasks makes things easier for your staff and helps lower operational costs.

For example, a text marketing platform will allow you to easily write and send multiple promotional text messages to your customers simultaneously. Your staff doesn’t have to spend a lot of time and effort on creating and sending text messages one by one. Since they can finish the task faster, you can assign more responsibilities to them. You’ll be able to avoid the expense of hiring additional staff to cover all your bases.

Automation tools can reduce manual tasks and improve productivity. Both can contribute to decreasing operational costs.

3. Better Customer Experiences

Most, if not all, customers these days expect short wait times, fast resolutions, and personalized experiences. With access to many other retailers, consumers can easily switch brands if they don’t meet their expectations.

Customer experience matters. It is what takes retail or any business apart from their competition. No matter how good your products and offers are, gaining customer loyalty will be challenging if you fail to give them a positive buying experience.

Automation tools can help improve your customer experiences. For example, a chatbot can guarantee a fast response to inquiring consumers. Even if you’re not online, these chatbots can automatically respond to queries or at least initiate a conversation. As a result, your customers won’t feel ignored.

Some automation software can also provide valuable data and insights into a buyer’s journey. Depending on the tool you use, you can identify customers by name, determine what they like, and offer relevant recommendations.

Podium’s AI Employee guarantees your business engages with leads within a couple of minutes; during peak hours, off hours, and every hour in between.

4. Minimal Human Errors

Human errors are a huge risk to retail business. It can result in wasted resources, lost revenue, damaged reputation, and even accidents. That’s why it is vital to minimize human mistakes.

However, workers are just humans, and humans are naturally flawed. Fatigue, stress, and other factors can easily cause an employee to make mistakes. So, how can you prevent an employee from making costly errors at work?

One of the answers is to introduce automation technologies. Automation tools can take a lot of burden off your staff’s shoulders. They’ll be able to breathe, concentrate on the task, and make fewer mistakes. Additionally, automated systems are built to operate with a higher degree of consistency and accuracy. Most of these tools can identify and flag bad data.

5. Enhanced Scalability

Automation tools can also be useful in scaling your retail business. By automating some processes, you won’t have to hire new people or increase your capital to boost productivity and earn more profit.

Most retail automation software you can find in the market is also scalable, which means it can grow alongside your business. They can keep up with the demand of your growing store.

6. Increased Safety

Retailers have long been a target of fraudsters. If you’re a retailer, you probably have already encountered counterfeit credit card payments, return receipt fraud, and other scams throughout your operation. You’re lucky if you haven’t been victimized yet, but it’s better to be prepared.

Fraudulent activities can drain or wipe out your profits quickly and easily. That’s why implementing preventive measures is necessary to protect your business. State-of-the-art technologies can protect business information. Retail stores can use currency detectors and authentication tools to catch fraudulent activities.

8 Retail Automation Examples

1. Automate Your Store Security

Brick-and-mortar stores can automate many aspects of their business, including security. Retailers can use security systems like Ring to easily monitor their business without going to their stores. Whether smoke fills the air, a window shatters, or an unauthorized individual enters your store, alarms automatically go off and notify the owner.

If you are operating e-commerce stores, you can use multi-factor or two-factor authentication to prevent fraudsters from accessing legitimate users’ accounts. Implementing other technologies like Secure Server Layer (SSL) certificates, anti-malware tools, and strong firewalls can also boost your online retail store security.

2. Automate Email Campaigns

Ecommerce marketing, such as email campaigns, is another process you can automate.

You’ll still need marketing experts to create the email campaign, set the rules and triggers for sending the email, and schedule the emails. You can set the email marketing tool to send emails based on the customers’ interactions with your business.

For example, you can have your email marketing tool automatically send a welcome email to anyone who gives their email address by filling out a form, signing up for a service, etc. You can also set the tool to send thank you emails to loyal or new customers. If you’re having a hard time writing emails, you can use artificial intelligence to generate one for you.

3. Automate Inventory Management

Inventory management is the heart of the retail business and one of the most tedious and error-prone processes. Traditionally, it works by having an employee manually accessing spreadsheets to determine how to manage the inventory.

However, you can now find automated inventory management systems to make the process less tedious and time-consuming. Unlike spreadsheets that only allow you to see inventory data in real time, inventory management solutions can do more. For example, if you own an electronics business, you can set up automated replenishment of stock and sync all your sales channels.

To effectively automate your inventory, make sure to integrate your in-store and online inventory as well as your point-of-sale (PoS) system.

4. Automate Customer Support

Customer satisfaction is more important than ever. Customers want to feel looked after. They don’t take kindly to stores that don’t show an understanding of how to deal with customers positively. Retail brands are already using automation to improve their customer support.

Customer service automation offers many benefits. It makes it possible for your store to regularly update all customers, no matter how many they are, on their orders in real time. Some systems will help you provide 24/7 support.

Additionally, you can use CRMs to gain a deeper understanding of your customers. You can track the customers through their buyer journey, from when they stumble across your business to when they purchase. An in-depth knowledge of customers’ needs and preferences is necessary to provide personalized and satisfactory customer service.

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5. Automate Return Process

The return process is another aspect of the retail business you can and should consider automating. With the ease of placing online orders, it’s common for customers to over-buy and end up returning some items. So your business will likely benefit from automating the return process.

Processing returns manually is an extremely time-consuming and cumbersome task. Depending on the return volume, you will likely need to assign multiple people to the job. The process also costs a lot of money.

With over 30% of American consumers saying they only buy from retailers that offer straightforward and free return processes, sticking with traditional ways of processing returns won’t be good for business. You might lose some customers to competitors who make returning orders easy and fast.

Aside from giving you a competitive advantage, return process automation allows your workforce to redirect their effort to more valuable tasks while ensuring a better experience for customers who return their items.

6. Automate Payroll Processing

Payroll is another business process you can successfully automate.

When you search the web, you’ll find payroll automation solutions for businesses of all sizes in different sectors, including retail. Whether you’re selling appliances, jewelry, or electronics, there will be solutions designed to meet your needs.

These solutions can ensure accurate payroll calculation and easily and safely keep employment tax records. If you are paying your workers hourly, payroll software can minimize mistakes commonly made when computing time clock data by hand.

7. Automate Store Planning

If you have an appliance store, you can also use automation tools to determine the best placement of your products in a physical store. Automation tools can help you identify which products customers are drawn to and create effective store layouts. For example, some retailers implement sensors that can detect and report which aisles customers spend more time in.

You can also simply use an analytics platform to get insights into your customer’s preferences. Buyer trends can be broken down into different categories, like demography, behavior, and product level. You can use all these data to identify the most sought-after products and arrange them in your store accordingly.

8. Automate Other Retail Workflows

Aside from payroll, you can introduce automation into virtually any HR or management process. There are many day-to-day processes you can automate, such as reminding staff who haven’t submitted their timesheets on time and getting alerts on products nearing expiration. Check with your employees to learn what processes bogged them down and find out whether you can streamline them.

Introducing automation into your retail workflow can streamline processes and drastically reduce time spent on traditional manual jobs. It can give your team more time to work on tasks that need their input.