Paper, Plastic or Robots? Grocery stores enter the world of automation

Published On
Apr 15, 2021

Retail food stores are undergoing critical shifts initiated by the COVID-19 pandemic that may affect the size and use of facilities, where they are built and how they are staffed long after the world returns to normal. Many of the changes have been fueled by shopper behavior—buying online, picking up orders at curbside or paying for home delivery. For contractors and integrators, it’s going to present a challenge related to reimagining how buildings are constructed and powered.

Nearly every industry has experienced unexpected challenges during the pandemic. When it comes to supermarkets, the results may be widespread and long-term. From farms to stores, the focus today is on automation and reducing staffing where possible. That means potentially leveraging more distribution facilities closer to targeted customers, leaner supermarkets with larger backrooms to prep online purchasing and use of low-voltage and wireless technologies to capture data and enable automation seamlessly in these sites.

Since the pandemic started, staffing was one of the first major challenges for markets and food distributors, said Susan Beardslee, principal analyst for freight transportation and logistics at ABI Research, Oyster Bay, N.Y., a global technology market advisory company. Attracting and retaining sufficient staffing was the key focus. Some began offering higher wages, bonuses and flexible hours to attract people into their workforce. Staff members were needed in the front of the store to serve customers on-site and to address the exponential increases in curbside requirements, she explained. But delivery to customers has become one of the key challenges. In fact, there is a significant cost for the last mile of delivery, which accounts for about 50% of total shipping costs.

For retailers, the pressure has been on keeping fast-moving essential goods in stock and readily available for on-site sales and deliveries, just as consumer demand was spiking and evolving. Severe weather has affected timely deliveries in parts of the country. Smaller grocers also must compete with the buying power and financial ability of big box and major retailers to create additional inventory of what is known as “panic pallets.” At the same time, many consumer packaged goods companies, such as Coca-Cola, are reducing the number of SKUs they generate to focus on high revenue and higher-profit products.

For large and small retailers, this raised a variety of challenges for determining shelf space, purchase orders and customer satisfaction. Additionally, a number of retailers find themselves striving to integrate their websites and apps with physical inventory in stores and warehouses.

“They have also struggled with having sufficient people to pull the inventory for curbside and unable to fulfill the commitments that the app assigns,” Beardslee said.

Technology is poised to solve some of the problems. Robotics company Attabotics, Calgary, Alberta, provides Burnaby, British Columbia-based grocery management firm FoodX Technologies with inventory-management robotics. The partnership offers a storage structure that replaces traditional fulfillment centers. The system then provides robotics to shuttle goods as orders arise, in horizontal and vertical spaces, which reduces the footprint of standard warehouses.

Automation is becoming key for grocers to develop their omnichannel delivery strategies and to enable e-commerce, said Rian Whitton, senior analyst for industrial, commercial and collaborative robotics at ABI Research. Food markets have slim profit margins (about 2% on average), so they are starting to rely more heavily on incremental implementation of robots. Most are determining that robotics will increasingly be key in the distribution and fulfillment centers where their products are handled.

At the same time, robots are being deployed for a variety of applications in physical stores. Among these applications are material handling, inventory tracking (with robots from companies such as Simbe Robotics, San Francisco), and even scrubbing floors with artificial intelligence technology from Brain Corp., San Diego, and vehicle navigation from BlueBotics, Saint-Sulpice, Switzerland.

Food retail giants such as Kroger, Target and Walmart are leading in technology investment and adoption, Beardslee said. They have existing organizations and partnerships with leading technology companies—from IBM’s blockchain with Walmart, to robotic warehouse technology from U.K.-based Ocado and Mountain View, Calif.-based Nuro Robotics’ last-mile shipments for Kroger and Walmart. Walmart and Kroger already partnered with Microsoft to compete against Amazon using artificial intelligence and the Azure cloud.

This also means structural changes are underway. The cost of manually bringing and stocking products on shelves when orders are increasingly coming online may not be sustainable. As a result, many stores have begun the process of planning or converting their customer-facing sales floor space into microfulfillment centers where robotics can be operated without interfering with the activity of storefronts and the shoppers.

These back areas will rely heavily on such automation technology and fewer employees. Humans who do work in the backrooms are likely to provide multiple roles by serving customers in the store front, restocking and picking items for orders where automation isn’t available in the back.

This transition has been happening faster than many shoppers realize. While technology such as robots in stores would have been too costly for small- or medium-sized retailers just a few years ago, they have become much more mainstream. Badger Technologies, Nicholasville, Ky., for instance, sells robots to provide stock counting, checks for cleanliness and UV disinfection.

Robots offer visibility store workers can’t provide. The Badger robotic systems were initially launched to inspect floor and shelf cleanliness and product stocking. Navigation still provides challenges for robotics, so technology companies are developing systems to enable that process.

The Badger robots are already in use by 500 companies, including Stop & Shop, Giant Food Stores and Woodman’s Markets, said Tim Rowland, Badger’s CEO. The system was launched for retail and is also in use for manufacturing and hospitality.

The simple process of ensuring store cleanliness is another labor expense that retailers cannot afford the way they had in the past, Rowland said. With the COVID-19 pandemic still underway, “the last thing you want is a store that’s not very clean.”

With the pandemic, Rowland noted that many stores were faced with unforeseen challenges, and as a result, were left in the position of needing to look at automation technology for the first time. Although much of the technology is wireless, the power for charging and connectivity is at the heart of any system and needs to be seamless.

While there’s going to be more automation and technology ahead for the grocery market, Rowland said, “We will have to balance the human and machine interface.”

Electrical contractors may play a role in that process by ensuring a system is powered and deployed in such a way that it provides a benefit, not an obstacle.

“I feel good about where we are now,” Rowland said, adding that the technology is being deployed incrementally and has been addressing many of the challenges forced on the industry by the pandemic. “I think we will see more and more technology, but it’s important to do it in an intelligent way.”

All of this starts with electrical contractors setting up the dock or the system’s power and connectivity. As technology encroaches on the physical world of food sales, where the power service goes and how it is used becomes increasingly critical.

“We need to make it look integrated,” Rowland said.

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