Analytics, AI/ML

Automation In Retail

Cogent Infotech
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Automation In Retail

Automation in retail began its journey decades ago in supply chain and inventory management. Retailers across the world have automated processes to save time and money while optimizing enterprise resource utilization. Some pioneers even automated customer-facing operations such as customer service to reduce waiting time and enhance customer experience.

The entire retail value chain is transforming. Let's see how automation is changing the retail sector.  

What is Getting Automated?

You can now automate a host of front-end and back-end retail processes for cost savings and increased organizational productivity.

Order Processing:

Customer orders can be captured digitally and processed with the help of bots, with minimal manual intervention.

Inventory Management:

Automation application in inventory management includes sorting, tagging, regular inventory checkup, monitoring inventory turnover of every single SKU, deciding on markdowns, and inventory replenishment.

Merchandise Management:

Merchandise planning, shelving, display decisions, assortment planning, and merchandise audit can all be automated.

Pricing Decision:

Real-time data analytics and machine learning are applied to customer buying behavior, automating pricing decisions and dynamic price changes.


Discounts and promotional offers are dynamically designed and rolled out, based on automated customer response and inventory movement assessments.

Unfortunately, only a small percentage of retailers are making the most of the available automation solutions and changing their retail processes for good.

Why Isn’t Every Retailer Automating?

Without automation, it is improbable for retailers to survive the rising competition from eCommerce players, increasing pressure to operate with lower margins and climbing customer expectations for service excellence. Still, specific roadblocks are keeping most retailers from automating at a pace and scale that is essential. These are:

Budget Constraints:

This is one of the biggest hurdles for retailers stuck in their capital budgeting cycles. Nearly 70% of retailers, large and small, use their previous year’s budget to project next year’s costs. With very little room left for budgetary allocation towards adopting new practices and solutions, these retailers remain stagnant in their status quo.

Internal Resistance:

Technology adoption and automation meet with internal resistance at every level of organizational hierarchy. And it begins with the top-level, where retail leaders cannot visualize different functions that can be automated. Furthermore, the perception that automation would lead to job loss causes retail employees to be less than eager towards process automation.

Lack of Skills and Capabilities:

Although more than 50% of the current retail functions can be automated, only 5% of retail jobs will become completely obsolete. This means that most jobs would need employees with better skills and capabilities to manage automated processes. Thus, the lack of a skilled workforce is a significant hurdle for retail businesses that are ready to invest and support automation.

The Way Ahead

Retail automation is a certainty, and brands that fail to realize this may soon fall behind in the fast-evolving market. However, with some fundamental structural and strategic changes, this situation can be changed. First, retailers have to assess the scope of automation they can undertake annually and the returns they can achieve through such investment.

Next, they need to consider the impact that automation will have on their current workforce. This could generate insights in terms of turnover, employee up-skilling needs, and talent acquisition.

Finally, a conscious move towards data-backed decision-making can prepare retailers for an accelerated pace of automation. And essentially prepare them for the retail of the future.

To read more such articles with sector-specific analysis and insights, head over to the Cogent Infotech website.

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