Analysis- Retailers Turn To Robots In Cost Inflation Fight

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The fast food industry, one of the biggest employers in the US, is under increasing pressure from automation.


With the rise of online shopping and delivery services, it’s not just fast food chains that are losing out on sales as consumers opt for home delivery or digital alternatives. Fast food chains are now facing a new threat: robots.


While automation in retail is nothing new — self-checkout machines have been around for years — companies like Amazon and Walmart are making it easier for retailers to implement robot technology at the front end of their supply chain.


According to a recent report from CBRE Research, these two companies have been investing heavily in automated warehouses to help them reduce costs and improve efficiency.


Robots are getting smarter and more efficient every day. As a result, retailers are starting to embrace the technology at a faster rate. The most recent example comes from the retail industry, where retailers like Macy’s are turning to robots in an effort to save money.


According to the New York Times, Macy’s has been testing a number of different types of robots in its stores over the past few years. These include self-closing doors and checkout kiosks that can operate without human assistance. These advancements will help Macy’s cut down on labour costs and help accelerate its turnaround effort as it struggles with declining sales figures across all categories of business. According to a report from the National Retail Federation (NRF) and the Center for American Entrepreneurship, robotic technology is being used in the retail industry to help reduce labour costs and increase efficiency.


"We're seeing an explosion of robotics that's happening across every industry," said Mike Belliveau, vice president of human resources at Walmart. "Robots are being used in manufacturing, they're being used in transportation and now they're starting to be used in retail."


The NRF estimates that more than 1 million retail jobs could be replaced by automation over the next decade. The NRF also found that retailers are able to employ fewer people because they can scale up their operations faster, often by using robots instead of human workers.


Retail chains are turning to robots to help them cut costs and stay afloat in an inflationary economy. Retailers are increasingly turning to robots to help them cut costs in an inflationary economy.


In a recent article for Quartz, writer Mark Harris writes that retailers are turning to robots because it’s cheaper than hiring more employees. He cites research from the University of Oxford’s Future of Retail Centre that found that “Robots could slash retail prices by as much as 10%” if they were used across all industries.


According to Harris, there are two main reasons why retailers are turning to robots: one is cost savings (because they can be programmed easily) and two is staff management (because they don’t require much training).


As the cost of retail goods continues to rise, retailers are turning to robots to bring down their costs.  For years, retailers have been fighting inflation with price increases on a number of items. But as the costs of labour and energy continue to rise, some companies are turning to robots.  Last year, Macy's announced that it would be installing 200 automated kiosks in its stores by 2020.


The company said it would use them for general merchandise like cosmetics and perfumes.  Macy's isn't alone in its push toward automation. Earlier this year, IKEA installed a 20-feet tall robot that can help assemble furniture at one of its locations in Sweden. And earlier this month, Amazon announced an expansion of its warehouse robotics program into Germany and the United Kingdom as part of a plan to create more than 100,000 full-time jobs in Europe over the next three years.


The report said that while automation has been a major factor in manufacturing productivity growth, it’s only now starting to be seen in retailing. But given its importance and early pace of adoption, McKinsey predicts that robotization could be “one of the most disruptive forces” on retail jobs over the next decade or two.

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