Dr Sanjit K. Roy, UWA Business School and Dr Gaganpreet Singh, Jindal Global University, look at a retail revolution that is under way, where robots are playing an increasingly important role.
This year has been extraordinary for many reasons but one of the most fascinating effects of COVID has been a technological retail revolution unlike anything we have seen before.
As we approach the festive season, we are seeing this at play in full force, with robots being used to box, monitor inventory and deliver gifts at rapid speed, much faster than humans could in order to meet consumer demands.
The revolution started earlier this year when COVID-19 government restrictions and social distancing were introduced. This led to a rapid change in the retail environment, forcing businesses to rethink the way they operated in order to survive. There was an increase in deployment of robots to eliminate human-to-human contact in service delivery.
Retail, travel, hospitality, financial services, restaurants and healthcare were among the industries most affected, and have become leaders in the adoption of robots.
Primarily, robots are used for three main applications - providing customer service in store, managing inventory and operations and bringing the store to the customer.
Australian supermarket giant Woolworths recently initiated in-store robotic trials to make their operations more efficient and cut costs. The robot is tasked to move through the store’s aisles, locate any potential hazards and alert staff members.
Similarly, Coles adopted robots in an effort to overhaul its grocery home-delivery service, and offer customers concerned about in-store physical distancing with alternative non-contact options.
EDEKA Supermarkets, which has more than 4,100 stores, was the first supermarket chain in Germany to use a humanoid robot as a COVID-19 measure. The Robot, named Pepper, reminded customers to practise social distancing.
Before COVID-19, there was some opposition among customers to the use of robots. For instance Margiotta Food & Wine, a Scottish supermarket chain, commissioned robot shop assistant Fabio in one of its retail stores in Edinburgh.
The idea was to have Fabio greet shoppers with high fives and provide food samples and helpful directions. However, within weeks, Fabio was fired for poor customer service, for giving customers inaccurate information and spontaneously yelling out ‘hello gorgeous!’ and offering hugs to startled shoppers.
But robots are now becoming the new normal and are here to stay. Research has identified customer trust towards service robots is the prime factor affecting customers’ willingness to adopt their services. The adoption of robots by consumers relies greatly on the robot’s reliability and ability to meet customer expectations.
The research indicates there are several consumer trust building factors affecting adoption including convenience, excellence, enjoyment, personalisation, control, novelty and relational benefits.
The research also identifies the imperative of protecting customers’ privacy and security, which can negatively affect whether customers trust service robots, if not carefully managed. These attributes will either act as facilitators or inhibitors for service adoption.
We know that technology and robots will be key to the future of retail, but also negatively impact consumer choice and engagement if they don’t meet expectations.
Dr Sanjit K. Roy, UWA Business School and Dr Gaganpreet Singh, Jindal Global University