Automation is impacting all industries, and retail is no exception. Retailers face a multitude of challenges today, from managing inventory to adapting to disrupted supply chains, competing with direct-to-consumer brands, retaining talent, and more. So it follows that embracing the latest technological advancements opens the way for enhanced performance. Enter retail automation, an opportunity you don’t want to miss out on.
Automation in retail takes many forms and changes various facets of how a retailer operates. For instance, we find more and more self-checkout systems in stores. Also, employees can automate repetitive tasks with dedicated tools to handle larger workloads. You can apply automation in many ways to enhance efficiency and engage with customers better, as we’re about to see.
In this blog post, you’re going to learn what retail automation is, its key benefits, applications, and future trends to keep an eye on. Shall we start?
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What Is Retail Automation?
Retail automation refers to the use of automation technologies to automate manual processes in the retail industry. These technologies include several hardware and software solutions such as:
- Artificial Intelligence
- Machine learning
- Chatbots
- Cloud computing
- Self-checkout kiosks
- Warehouse robots
- Augmented reality (AR)
- Etc.
Companies in the retail industry are already using these technologies to overcome all sorts of challenges: time-consuming tasks, human error, harsh competition, not-so-great customer service…
One example of how automation can benefit retailers is using AI and machine learning algorithms to better forecast demand. This helps prevent common inventory issues like stockouts and overstocking.
By adopting automation, retailers can optimize workflows, reduce operational costs, meet customer demands, and derive real-time insights from data. To better understand what you can achieve with retail automation, let’s dive more into its key benefits.
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5 Key Benefits of Retail Automation
1. Improved operational efficiency
You can streamline a lot of retail processes with automation tools, from order processing to addressing common customer inquiries, updating prices, managing the inventory, and so on. In other words, employees don’t have to do everything by themselves anymore. Even better, they’ll have more time for strategic work like analyzing sales trends and developing loyalty programs. As a result, your business can handle larger workloads without running into bottlenecks, delays, and other operational problems.
2. Huge cost savings
Naturally, since your staff will spend less time performing repetitive tasks, the cost associated with these tasks will go down. Plus, you won’t have to hire more people during seasonal peaks.
But that’s not all: in addition to reducing the cost of labor, you also minimize the cost of human error. For instance, mistakes made while processing invoices can result in late payment penalties. Automated systems help prevent these costly and embarrassing situations.
Your company can then reinvest the resources saved into training staff, expanding your product and service offerings, enhancing the customer experience, and more.
3. Smoother supply chain
Automation gives you more visibility and control over the supply chain. You can automate order processing, track inventory levels as they get updated in real-time, monitor delivery updates, and so on. These automated processes help you respond to changes quickly and thus avoid costly disruptions. As a result, products travel smoothly from manufacturers and suppliers to your store(s) and ultimately your customers. Some companies go even further by investing in robots that can pick items in warehouses and prepare them for shipping.
4. Enhanced customer experience
Providing an excellent customer experience is key to success in retail. The right automation tools can make shopping more convenient and engaging. Consider chatbots that address frequent inquiries, personalized recommendations, spin-to-win popups, automated feedback requests, or self-checkout systems. These tools help customers shop without hurdles, find what they want easier, and benefit from sweet deals. This greatly enhances customer satisfaction and fosters brand loyalty.
5. Real-time data and insights
Retail automation solutions generate a lot of data that you can track in real-time and analyze to uncover actionable insights. Your understanding of sales trends, customer behavior and preferences, seasonal patterns, efficiency of workflows, and other areas will improve significantly.
Once equipped with this knowledge, you can quickly make informed decisions to improve the performance of your retail business: promote the right items at the right time, optimize shelf space, enhance the user experience on your online store, reduce waste, etc.
Applications of Retail Automation
Invoice processing
Manual invoice processing is notorious for being particularly time-intensive and error-prone. So it’s no wonder that retailers are turning to automation to streamline this workflow and eliminate human error. By using simple automation tools, you can extract data from invoices, purchase orders, and similar documents. Then, send your data to your accounting systems to speed up invoice approval and payment.
Imagine your AP team no longer having to deal with errors in data entry, delayed payments, supplier disputes, and other issues that arise from manual, inefficient work. Retailers benefit from faster turnaround times, improved vendor relationships, and enhanced financial accuracy.
Inventory management
Anyone who manages inventory manually can attest to how much of a headache it can be. Counting items, updating stock levels on paper or a spreadsheet… let’s just say the door is wide open to mistakes.
Manual inventory management can be viable for a very small business. But as your business grows, automating inventory management becomes a must. Retailers use a combination of tools to do this: inventory management software and apps, barcode and QR code scanners, warehouse management systems (WMS), Internet-of-Things (IoT) devices, AI tools, etc. You don’t have to implement all of these — just choose the ones you need.
With an automated inventory management system, you track stock levels in real-time, replenish items accordingly, and prevent both stockouts and overstocking. You will also forecast demand with higher precision and reduce daily waste, leading to more efficient inventory management.
Customer support
We mentioned chatbots earlier; they work great to automate customer support. Using them along with virtual assistants, and AI-powered ticketing systems allows you to provide prompt and accurate responses to customer inquiries. These systems can handle high volumes of queries (like order status and return requests) simultaneously, offering 24/7 support.
These automated systems take a huge burden off the shoulders of your customer support team. Human agents can then focus on more complex issues as they get escalated to them by AI chatbots.
Retail marketing
Another area where automation drives better performance is retail marketing. Retailers are using marketing automation in multiple ways:
- Onboarding: give new customers a welcome offer to make a great first impression.
- Segmentation: divide customers into segments based on clear characteristics and send marketing messages tailored to each segment.
- Cart abandonment: send automated emails to customers who abandoned their carts to recover a portion of lost sales.
- Personalized offers: send discounts, promotions, and recommendations based on the customer’s data, behavior, and purchase history.
- Customer feedback: collect feedback with automated satisfaction surveys and review requests.
- Customer re-engagement: send automated messages to customers who haven’t made a purchase in a long time and offer them a discount or voucher to win them back.
- Data analysis: identify customer trends and behavior by analyzing large volumes of data.
- And more.
By setting up all these automated workflows (which can be done on your email marketing platform), you can target online shoppers with personalized offers, boost conversion rates, recover lost sales, re-engage customers, increase retention and loyalty, and so on.
Self-checkout systems
Long checkout lines are a common problem in stores — they frustrate customers and stress cashiers. Self-checkout kiosks solve this issue by allowing customers to complete purchases themselves. These automated machines help speed up the checkout process, thus enhancing the customer experience. Because of how convenient they are, more and more companies worldwide are looking to invest in them. A study by Research and Markets expects the self-checkout market to reach US$4.716 billion by 2027.
These applications highlight how automation can address retail challenges and improve workflow efficiency, customer satisfaction, and bottom lines.
All of this sounds exciting for retailers, but there’s more to it. As it turns out, automation in retail is still evolving and will become more and more commonplace in the near future.
Future Trends in Automation for Retail
Artificial intelligence and machine learning
AI and machine learning enable predictive analytics, personalized shopping experiences, and dynamic pricing strategies. These technologies address the challenge of understanding and adapting to customer behavior in real-time, allowing retailers to deliver more targeted and efficient solutions.
Robotic process automation
Many retail companies are starting to use RPA to automate a myriad of tasks such as order processing, demand-supply planning, sales analytics, product categorization, compliance regulation, etc.
Automating these processes allows retailers to massively reduce error rates and free up staff for higher-value activities. As retailers handle increasing volumes of data, RPA offers scalable solutions to maintain process efficiency and data quality, cutting operational costs significantly.
Self-checkout and cashierless stores
Like we just mentioned, self-checkout kiosks solve the longstanding issue of long checkout lines. So they will keep spreading in stores in the foreseeable future.
Some companies go a step further by introducing cashierless stores where customers make their purchases without interacting with staff. These stores are powered by multiple technologies, from sensors to computer vision, AI, mobile apps, QR codes, electronic shelf labels, etc. These cashierless stores provide a more streamlined and differentiated experience. Retailers like Amazon Go are already leading this trend, paving the way for a new type of in-store shopping.
Augmented reality
AR is transforming the shopping experience by enabling virtual try-ons, interactive displays, and immersive in-store navigation. This addresses the challenge of providing experiential shopping in both online and physical retail. AR increases engagement and reduces return rates, with 71% of consumers stating they’d shop more often if AR were available.
These trends demonstrate how cutting-edge technologies are shaping the future of retail, offering solutions that improve efficiency, customer experience, and competitiveness.
Final Thoughts and How to Get Started
In today’s world, competition from big brands and online stores is fierce, customers are always looking for the best deals, and. Because of this, relying on manual processes for everything leads to big issues and bigger losses. Miscounted inventory, high holding costs, missed data insights, lost sales, employee burnout…
If you have faced challenges like these before, you know how painful they can be for your company’s bottom line, growth, and reputation. Luckily, you can change this with automation. As a matter of fact, retail automation is already a must-have for companies determined to adapt and thrive.
You can start implementing automation by streamlining routine workflows such as invoice processing and data entry. Docparser, the leading document processing solution, makes it easy for you to extract data from recurring documents and send it to your system. By saving hours of manual data entry and eliminating human error, your staff will carry out data-related processes much faster and gain more time for high-value tasks. Try Docparser for free today and leverage the power of automated data extraction.
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