Food for Thought… Consider Affordable Food Robotics

In retail outlets, robots are increasingly being used in all aspects of the business to track inventory, gauge customer satisfaction, streamline checkouts, deliver products, clean stores, and prep food. In convenience stores, robots are evolving to play major roles in all aspects of food service, mainly to replace mundane, boring and/or repetitive tasks. At the end of the day, these tasks are directly associated with your labor and food costs, two data points you can control in your business. Labor costs have increased steadily, by 8 to 10% annually for the past few years. The convenience store industry experienced high turnover rates of 115% in 2017, so many retailers are adopting solutions to improve human functions, e.g. self-service kiosks to free up manpower for other customer service facing tasks.

Retailers are learning that robotics can address many of the top challenges the c-store and food service industries face today. Due to the relatively low employment that has continued this year, robotics can effectively minimize the concerns around labor shortages, rising wages, federal and state law compliance.

Besides the labor benefits, most retailers will also realize a cost savings. A current trend is for robots to be provided “as a service” and the cost summarized in an hourly rate that includes everything required to operate the robot. This usually means a company does not need to create a new operations capability for supporting the robots.

Currently, many of these robot rates are highly competitive compared to human labor, making it affordable for employers to select robotics over humans. The current trend is showing that hourly rate costs for robots are dropping while the minimum wage rates for humans are rising. Some studies suggest robotic prices have declined 65% since 2015.

In addition to labor cost savings, retailers can avoid costs associated with very high attrition, which requires staff recruitment, onboarding and continuous retraining of employees. This can also lead to cost efficiencies related to workforce scheduling; for example, a higher wage can be given to the most valuable employees, while attrition can just be countered with robotics.

A 2017 survey by Deloitte found that 53 percent of companies already using machines and automation to perform tasks previously done by humans has an average payback at less than 12 months.

Aside from the labor cost savings and benefits, retailers will also realize the following benefits:

• Robots are excellent at providing consistency in quality and freshness. By doing so, retailers meet customers’ expectation each and every time they deliver a product or This can allow retailers to consider new product offerings as part of a healthy menu concept. All signs are indicating that customers are looking for health foods in convenience stores.
• Robots can also ensure expedited efficiency in Besides demanding consistency, customers demand fast, high quality food and personalized experiences via multiple channels. Retailers are looking for ways to take advantage of mobile ordering and pickup, and robotics can meet the demandsof customers on the go. The convenience customer is ever changing, and retailers need to cater to millennials as well as baby boomers.
• Along with efficiency and consistency, robots can minimize food waste and spoilage if managed properly, thus improving overall food costs and margins.
• The repetitive tasks conducted by robots will also assist with food safety concerns because they guarantee quality, cleanliness and consistency. Concerns around humans multi-tasking related to food prep are minimized so that risks are reduced in the workplace.
• Being a leader in the industry helps promote brand awareness by drawing attention to your innovation efforts. Many retailers today are promoting their latest and greatest technology innovations which are setting them apart from the competition by providing unique customer experiences. This leads to increased sales and draws attention as a publicity stunt. Although these are often short-term benefits, it can help to promote the perception of innovation and thought leadership.

For the above reasons, retailers will be able to improve customer experience in their stores with increased efficiency, quality, cleanliness, and consistency. Studies have shown that these attributes are highly valued by customers and can help increase sales and profits.

When reviewing the history of innovation and automation in the food service industry, it’s clear the pace is accelerating. This trend will most certainly continue due to its costs savings and benefits. Robotics will effectively bridge the gap between mass produced and customized, hand-made food. Robotics is addressing many of the top challenges that the food service industry experiences.

High performing retailers and food service companies need to remain relevant in keeping up with trends and customer demands. Retailers that can implement an effective strategy involving early adoption of robotics will benefit the most. Consider short term vs. long term gains in your strategy. One of the keys to success is to ensure a proper balance of human interaction and robotics. Setting yourself apart from the competition is key in this very competitive environment.

ROC Associates has worked with retailers and food service companies in developing such strategies and implementations. To learn more about what’s possible and/or examples of how robotics has benefited retailers, please contact Fiona Harris.