Doug Stephens is one of the world’s foremost retail industry futurists. This piece is an excerpt from his book Reegineering Retail: The Future of Selling in a Post-Digital World.



What does the future hold for retail employees? Well, there’s just no way to put it gently. The days of the retail clerk are over. By clerk, I’m referring to the millions of retail workers who operate checkouts, greet customers at the door, count inventory, look up prices, scan bar codes, corral shopping carts and do their best to remember snippets of product information about the vast assortments they carry. These jobs will all but disappear within 20 years, perhaps sooner.

Part of what’s driving this change is the quickly growing gap between customer service expectations and reality. A recent survey indicated that a full 48 per cent of shoppers today believe that they know more about the product they’re looking for than the sales associate helping them, and chances are they’re right. It’s never been easier to rapidly gather knowledge about specific products.

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More startling, though, is that 67 per cent of those surveyed have doubts about whether the sales associate helping them is even telling the truth. I suspect this has less to do with consumer paranoia and more to do with living in a world where the correct answer to any question is two clicks away. We trust Google infinitely more than we trust salespeople. And so, in a world where partly right is as good as being wrong, the relative utility of retail salespeople is diminished. In fact, as research released by Google indicated, two-thirds of shoppers said they’ve been unable to find the information they need in stores, resulting in almost half of them being left feeling frustrated.

Exacerbating the situation is the ongoing battle for higher wages by retail and hospitality workers. Few would defend the miserably low wages that retail has become notorious for paying. In other words, for at least 50 per cent of retail workers, supporting a family with a spouse and two children on a retail salary implicitly means living in poverty. In the United States, for example, the median wage for all retail workers in 2015 was US$11.01 per hour, or US$22,900 per year. In the same year, the poverty threshold for a U.S. family of four was set at US$24,339.

You might expect such a low income to insulate retail workers from technological disruption, but it actually makes them much more vulnerable. Here’s why. While the federal minimum wage is currently stuck at US$7.25 per hour (some states have minimums that sit slightly above that), labour groups have been fighting for a mandated US$15 per hour. Two U.S. states, New York and California, have already signed bills to move the minimum wage to US$15 and an additional nine U.S. cities have approved moves to a US$15 minimum, some already taking effect by 2017.

The problem inherent in this increase is twofold. First, most economists agree that even a US$15-per-hour minimum wage falls short of what it really should be if wages were properly indexed to inflation. Therefore, it’s likely that the push to US$15 is only a stepping stone in what will be ongoing pressure to raise minimums even further. And while raising wages is the morally correct thing to do, it doesn’t follow that there can possibly be a reciprocal increase in individual productivity to meet it. In other words, the nature and productivity of the work at US$9 per hour is likely to be no different than at $US15. The difference will have to be accounted for in either lower corporate profits or higher consumer prices. Sure, we can argue the bigger ethical questions that surround corporate and consumer greed, but none of it solves the problem at hand.

Second, compounding the case against workers is the fact that an army of technologies stands at the ready to take over their work. For example, California-based Simbe Robotics recently introduced its Tally robot, the world’s first fully autonomous stock-keeping robot. Able to operate for between eight and twelve hours on a single charge, Tally robots patrol the aisles of grocery stores visually checking and recording up to twenty thousand products at a shot, and they do so with near-perfect accuracy. They then relay this information to store management for action or correction. The robots can detect even the subtlest shelving errors or out of stocks. According to Mirza Shah, Simbe’s chief technology officer, companies such as CVS or Walgreens would have to dedicate between twenty-five and forty staffing-hours per week to accomplish the same amount of work as Tally, but even then, humans would complete it with far less accuracy.

New England–based robotics company Symbotic LLC makes robotic autonomous warehousing technology that can race through warehouse aisles and literally climb racking to put orders together in a fraction of the time it takes human workers. As a result, the technology can cut labour costs by up to 80 per cent and reduce the warehouse footprint by 25 to 40 per cent. Target is now using this technology in one of its largest distribution centres in California.

If you’re thinking that inventory and warehouse jobs are more suited to robotics but that the sales associate role requires the human touch, Lowe’s suggests otherwise. Following on the heels of two years of testing robots in its Orchard Supply Hardware store in San Jose, Calif., the company recently announced that it would be introducing a “fleet” of robots in its San Francisco-area stores. The robots, called LoweBots, are programmed to greet customers at the door, respond in multiple languages, field product inquiries and direct customers to the items they’re looking for. In addition, store staff can access the LoweBots for up-to-the-minute information on pricing or inventory. Moreover, the robots are able to analyze data and detect patterns that might influence business decisions in real time. And all without ever taking a lunch break, a sick day or even a paycheck!

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But what if a customer isn’t sure what product they want or need? Can technology help them find exactly the right product? That’s precisely the problem Mumbai-based Fluid AI set out to solve when it partnered with IBM and U.S. retailer The North Face to create an artificial intelligence–powered shopping bot called Expert Personal Shopper (XPS). Using IBM Watson as the brains, Fluid created a customer service interface with which customers can find the perfect jacket simply by answering a series of questions posed by the application. Using natural speech processing, the app gradually narrows down the wide assortment of available products. For example, you can begin by saying, “I need a jacket for a trip to Vermont in the late fall.” From there, the program will ask you a variety of relevant questions. It may ask you what activities you plan to do. Or it may inquire about the weight of jacket you’d prefer. As you answer each question, the AI will modify the potential recommendations, eventually landing on a few suggested products that meet each of the criteria you’ve indicated. And it will only get better, because the more people use the program, the smarter it becomes. IBM was so impressed that it acquired Fluid’s XPS technology in October of 2016.

And if you’re among those who believe that our innate empathy and sensitivity to emotion is what safeguards humans from obsolescence at the hands of technology, it’s important to know that SoftBank Robotics is building emotional sensitivity into its humanoid robot, Pepper. Pepper will not only respond to commands but will do so with sensitivity to the emotional state of its user.

While Steve Carlin, SoftBank Robotics’ vice-president, agrees that these are powerful new technologies, he in no way considers them precursors to any sort of robot apocalypse. At least for now, he sees the use of robots in the retail environment as limited to low-level operational tasks such as helping customers navigate the store or gathering basic information about products or services. He doesn’t anticipate scores of robots displacing people in stores any time soon.

Yet, according to a recent study from Oxford University, the impact of robots and AI on retail employment may be coming sooner than most of us think. In examining the likelihood of different types of workers being replaced by technology, the study determined that there is a 92-per-cent probability of front-line retail workers being technologized over the coming decade. So, retailers everywhere will face difficult decisions in the years to come.

It stands to reason that companies such as Walmart will be watching such technologies with great interest. After all, consider that the company employs more than 1.3 million associates in more than four thousand U.S. stores. The potential cost savings from technologizing even a small percentage of that sales force would be astronomical. And Walmart is not alone. The retail sector is North America’s largest employer, accounting for more than 15 million workers, and in an industry continually challenged for profitability, the potential upside of replacing workers with technology has to be tantalizing.

But all this is not to say that we will soon be shopping in dystopian future stores devoid of people. In fact, while robotics and AI can be superior to humans at executing repetitive and linear tasks, there are as many things that they are poor at.

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For one thing, robots tend to have weak fine-motor skills, making the manipulation and demonstration of complex objects or tasks very difficult and slow. Therefore, as retail spaces become more experiential in nature, they’ll require human beings to operate and demonstrate products for consumers. And artificial intelligence, while tremendous at retrieving factual data and solving linear problems, is not so adept at intuiting creative and sometimes lateral solutions, much less forging an emotional connection with a customer. Technology, on its own, tends not to be the optimal solution.

Above all else, what humans bring to the table is their humanity. The retail workers of the future will be creative problem solvers who use lateral thinking to assist customers. They will be adept with technology and employ clienteling and other technologies to expertly guide shoppers and personalize recommendations. The retail associates of the future will be brand ambassadors – enthusiastic superusers of the products that the retailer trades in – who can speak with customers from first-hand experience. They will be the ultimate personification of the brand.

And for all this, the retail associates of the future will not need to protest or picket for a living wage. Instead, they will have employers falling over themselves to pay them well because the retail shopping space of the future will marry the efficiency and effectiveness of technology with the expertise, enthusiasm, empathy and creativity of outstanding human beings. Retail will cease to be the job it has become and reclaim its rightful place as a profession people can be proud to pursue.