ORLANDO, Fla.—2019 will be crucial for retailers as the automation strategies seem to be gaining ranking in their list of priorities for this year. 

According to Forbes Magazine last year, the fascination for automation relies upon the fact that it lowers the cost to consumers of accessing a market, so more people can afford to buy in. So, even though there are fewer jobs supporting the same amount of revenue as before, there are net the same or more jobs because consumers are buying more – there is more overall revenue. 

What’s holding everyone back so far? The biggest fear that as automated work requires more skills, those without those skills or access to training to gain those skills can get left behind. Would it really get rid of so many workers’ jobs or the so-called “death of the worker”?

Retail is currently a business model based on low skill, low pay, high turnover labor force. With that said, as the world moves forward to automation, not only workers will need to obtain new skills and get retrained –  but retailers will have to re-learn how to retain those highly skilled workers and be financially ready to sustain a different payment plan.

FOR EXAMPLE —A New Model For Online Grocery Fulfillment

According to the report from CommonSense Robotics, retailers like Target, Amazon, Kroger and others have invested $28 billion in e-commerce in just the last 18 months. With an annual market of nearly $800 billion, groceries are strategic hence the reason why so many companies are trying to win the grocery wars.

According to CSR, retailers incur a pure loss of $5 to $15 on every manually picked online grocery order. The loss gets gets worse when the number of online orders increases. It is for that reason that moving from in-store manual picking to a dedicated facility to solely support e-commerce is a model many retailers see as the logical next step.

To reduce costs and increase efficiency, CSR has perfected the use of robotics to select and retrieve the items requested by each customer. CSR recently opened its first fully automated fulfillment center which offers a stark contrast to picking orders manually.

Automation is being utilized by some retailers to solve for scale and economics. However, the challenge is that most automation vendors can only enable next-day delivery propositions. Given that same-day delivery rollout increased by 500% in 2018, this seems like a solution for 2017 and not the future, according to CSR. Some believe that the optimal strategy for grocery retailers is to maximize sales per square foot inside its stores and leverage an offsite micro-fulfillment center to fulfill online grocery orders.

D3 State of Retail Supply Chain report, an industry survey conducted by EyerforTransport and Quintiq— with more than 200 retailers, e-tailers and manufacturers on a range of issues, revealed that companies are less focused on forecasting capabilities and more focused on implementing automation in 2019, especially in the warehouse. Half of retailers and manufacturers reported that warehouse automation is an "advanced or immediate priority," according to the survey.