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Home » Blogs » Think Tank » How AI and Automation Are Making Their Way Into Retail

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How AI and Automation Are Making Their Way Into Retail

A SHOPPER USES A QR CODE TO CHECK OUT AUTOMATICALLY AT A SUPERMARKET iStock-xiaoke chen-1320895011.jpg

Photo: iStock.com/xiaoke chen

July 7, 2023
Anat Shakedd, SCB Contributor

The further we get into 2023, the harder it's becoming to fill retail jobs. According to the Bureau of Labor Statistics, the U.S. had 11.3 million openings in January, 2022, down slightly from a record 11.5 million in December, 2021. And while this state of affairs is present in all industries, it’s especially present in retail.

During the pandemic, news of layoffs and job losses, especially in brick-and-mortar stores, dominated headlines. Physical stores were closing their doors and shifting to fully online strategies, throwing millions out of work. BLS reported that between February and April of 2020, retail employment dropped by nearly 2.4 million workers. Now, however, as the retail business has started bouncing back, former employees are in no hurry to get back to work.

During the pandemic, workers across the globe began reconsidering their career paths and what they were willing to contribute in a work setting. In retail in particular, employees’ patience for tedious tasks dwindled. As a result, many opted not to return to their jobs, or decided to quit after the fact. So how can these outstanding tasks be managed without employees to do the work? And taking it a step further, how can we ensure that the employees currently on staff don’t get burned out and decide to leave?

Retailers are finding it increasingly difficult to find the staffing support they need. By the end of December, 2022, one million retail jobs were open. Employees today are less inclined to deal with common challenges such as inventory management and filling buy online, pickup in store (BOPIS) orders. Much of the challenge comes from brick-and-mortar stores trying to find the balance between online and in-person shopping after years of only having to manage online orders. This has understandably resulted in some disconnect between the two.

Recently, a Target employee posted a TikTok video that encapsulated the difficulty so many retail employees are facing, as out-of-stock items continue to show up as available online. The video went viral and inspired hundreds of comments from other retail employees struggling with the same issue. This is a perfect example of a scenario where technology — artificial intelligence and automation in particular – can offer a solution. Technology today has the power to give retailers and their customers detailed, real-time visibility into stock count on the item level across the chain, which allows for optimized store efficiency and inventory management. It also helps employees avoid having to manage customer frustration — such as that displayed in the TikTok video — that they can’t control.

Retail leaders are evolving by figuring out better ways to serve their employees. They are realizing that, by empowering their frontline workforce, they can achieve better business results and a stronger bottom line.” They can also engage in more localized decision-making with smarter in-store systems.

We’ve come a long way from the cash register being the most technologically advanced device in a retail space. Today, retailers are moving to self-checkout and offering consumers the same convenient experience that they get online, while freeing up employees to service customers on the shop floor.

This is the future of physical retail. Automation and AI offer an incredible opportunity to eliminate the tasks that so staff prefers not to handle. As we’ve seen recently, in many cases those tasks have been the driving force behind mass resignations and unhappy employees. As technology continues to advance, we can expect it to have a huge impact on physical stores — from the employee all the way to the customer.

Anat Shakedd is chief executive officer and co-founder of Nexite.

Artificial Intelligence HR & Labor Management Retail

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