Impact of Robotics and Automation on the Retail Industry

The retail and e-commerce sector has continued to grow exponentially, despite the pandemic. Both the offline unorganized and organized retail industries got severely affected during the first and second wave due to lockdowns, on the contrary, this led to booming online retail industry. Since then, a lot of the brick-and-mortar formats have been replaced by online stores for more-or-less everything – be it buying groceries, food, shopping for personal hygiene items, or clothes. Not only are these online stores preferred by the people, but they have also impacted every consumer’s life for good.

Some of the ways in which Robotics and Automation have fundamentally altered the Indian Retail landscape are:

MFCs and Dark Stores - Dark stores are essentially traditional retail stores or supermarkets converted into e-commerce warehouses or local fulfillment or distribution centers. Dark stores are not open to end customers. Dark stores are highly suitable for the grocery industry and the Direct-to-Consumer industry. These D2C (Direct-to-Consumer) businesses offer convenience to the customer with shorter fulfillment time, and subsequently same-day delivery. The perfect execution of these dark stores has only been possible due to the booming technology. With advanced algorithms being practiced, retailers can predict the demand patterns and fluctuations and can stock the dark store with SKUs in the city as per the demands of the region, and with that edge, dark stores are set to become the future of the post-pandemic retail ecosystem. 

With the help of Robotics and Automation, retailers are also stepping into the world of Micro Fulfilment Centers (MFCs), these MFCs enable the concept of 30-min delivery. MFCs help in cutting down the last-mile delivery cost, while supporting BOPIS (Buy Online Pick in Store) model. Though MFCs cannot yet function on the 10-min delivery paradigm, MFCs and dark stores are the new evolving pattern in the retail industry. 

Flexibility in Fashion and Lifestyle - With time, options in fashion and lifestyle are getting more flexible. Customers have the option to order multiple items and return what they do not like if not all the ordered goods. This flexibility to customers comes from an automation-enabled optimized and efficient inventory handling and return handling system. With the help of such proper robotic return handling systems, retailers can systematically process these returns in no time, without them conventionally being a loss. Return handling was one of the biggest challenges faced in the industry, which with automated return handling solutions can now be optimized, saving a huge amount of money for the retailers. 

Unlimited Options – Multiple Brands and Multiple SKUs - The range of options available to customers are ever-growing, automation enables warehouses, fulfillment centers, and distribution centers to efficiently store multiple SKUs of multiple brands. With the help of technology, space can be optimized very efficiently to store such ‘unlimited options’ in a distributed way, while also making it easier to reduce the picking time, returning in a shorter order fulfillment cycle. 

Availability of Stock - With the help of advanced technology, retailers can stock the required inventory for their operations. Advanced algorithms help in predicting the SKU (Stock Keeping Unit) demand, and fixed and flexible storage solutions enable warehouses to store goods while utilizing their space efficiently. With such availability, ‘Sold Out’ is not an option, eventually leading to better sales for the retailer. 

Faster Stocking and Order Fulfilment - Robotics and Automation enable FMCG companies to provide faster order fulfillment and subsequently provide material to small retailers or Kirana stores faster. FMCG companies, with the help of Automation, can provide inventory to their stores faster, while also being able to fulfill small orders in no time. These fast-stocking options, which did not exist earlier, have only been able to exist due to present-day technology. 

Last-Mile Delivery - With the existing infrastructure for last-mile deliveries in India, usage of Robots as a Service (RaaS) should be the next grandiose thing to enable last-mile deliveries, especially with the 10-min delivery model. RaaS can be very impactful for 10-min deliveries, though it has not yet been practiced in India, it would be very impactful to see the trend rising over the next couple of years. Each housing society or residential complex can have a few robots, shared by retailers, which can bring a tremendous change in the way the retail industry operates.