Article | 2.9.2022
5 reasons why retailers should use process automation
Retail industry is continuously under pressure for rising costs and demands – production, supply chain and workforce costs are increasing, meanwhile customers are demanding faster and more personalized service. On top of it, e-commerce has swiftly taken a lion’s share of the market, growing faster than ever before due to the pandemic. Automation offers retailers a chance to battle these rapidly changing challenges, and it has switched from being a nicety to a must-have in order to stay in the competition.
Retail sector is a very dynamic, constantly changing industry. Companies in retail must find new and better ways to attend to customer needs relentlessly. The beauty and challenge of the industry is how fast the trends and customers’ preferences are changing all the time. Read on as we list 5 main reasons why retailers should use automation.
1 ) Process automation is quintessential in improving customer experience
Studies recite that customers are quick to abandon brands that don’t meet their requirements for convenience, and a bad shopping experience will not incite a re-purchase. A smooth and fast experience on the other hand is likely to win over new and repeat customers.
Automation improves customer experience in many ways. For example when software robots are used as customer service team’s assistants to help process orders, returns, reclamations and service requests – they directly impact customer experience by speeding up the service and reducing errors.
Automation in eCommerce likewise answers to increasing customer-centricity and efficiency requirements, directly enhancing customer experience. For many customers, waiting is one of the most disliked part of online shopping, which is why automation can make such an impact on e-commerce by speeding up both the front-end and back-end processes. Payment processing, customer support, ERP and logistics management all benefit from the quality improvements, speed and better data management that RPA yields.
But automation also improves customer experience by improving stock management with real-time data, in addition to speeding up the service. You can read more specifically about RPA in customer service here.
2 ) Real-time data provided by automation improves stock management and mitigates stock issues
Having robots updating real-time data about stock levels does not just benefit the customers, but it also increases operational efficiency and releases workforce resources from mundane routine work.
For example, we did an automation project for a global clothing chain that has a subsidiary in Chile. In the automation the robot updates the SKUs (Stock keeping unit) database every day based on the web catalogue of the European subsidiary. Processing all the data manually would take 100 hours, but with the robot it takes 4-6 hours, making the automation 20 times more efficient. Executing this process daily would not be possible done manually. Besides speeding up the process, the automation increased standardization and traceability to 100%. It is also an essential tool for BI. Altogether 45 000 SKUs and 160 000 images were collected. This was a huge improvement for the company’s eCommerce management.
Automation can likewise be used to alert when SKUs are about to finish, or to predict when products will sell out based on historical sales data. For example, we did another automation for a retail company for their restocking process. The purpose of the process is to determine the replacement matrix for each of the SKUs assigned to different branches supplied by the company. The implemented replenishment algorithm collects information on historical sales and stock of the products and processes this information to determine the amount of product that must be replenished in each of the stores. The replacement information is sent via email to the Brand Manager and other users involved.
Automation increased the speed of the process to be 25 times faster, from 23 hours to less than one hour. The process also became more standardized and improved the reportability on the KPIs and distribution of results. The automation equally helps with avoiding stockouts and dissatisfied customers.
3 ) Automation increases operational efficiency and productivity
As stated above, automation improves efficiency by removing manual work. In other words, automation saves time, but also speeds up throughput, as robots can work much faster than humans, and on top of that, they work around the clock. For example, automation saves employees’ time from order, returns and invoice processing, inventory management, sales promotions, and much more.
Likewise, employing robotics in retail enables doing completely new tasks or doing certain tasks more often, which couldn’t be possible with manual work, when those tasks are too resource-intensive. Like in the customer case described above, updating the SKUs daily with human labor would simply not be possible. Using automation also keeps the wheels turning 24/7, even when employees call in sick or need to prioritize other tasks.
4 ) Process automation reduces costs
Process automation drives down costs in the whole value chain within retail– from procurement to inventory management to sales and distribution. When automation takes care of monotonous, mind-numbing repetitive retail tasks, labor costs are reduced in the processes. Meanwhile employees’ time can be released into more meaningful and value adding tasks, simultaneously improving employee satisfaction.
Automation allows doing more things and getting better results with less resources, therefore reducing operating costs. And the more your business scales the automations, the more your business will make cost savings.
5) Increased sales with better sales analytics, promotions and demand planning
Automation in retail also improves sales in many ways. Sales processes can be boosted with automation in processing sales history, new orders, order confirmations or changes in orders. It also improves visibility into sales reporting and analytics. Robots can process and analyze large amounts of sales data every day, which would otherwise be a huge effort with human resources to do as fast as robots can perform. With RPA, your business can get real-time insights, which help you make a better analysis to optimize sales opportunities.
Automation can likewise be used in marketing and management of sales promotions. We executed an automation project for our retail customer in Chile to manage their sales promotions. In the automated process, the robot reviews the products periodically, and based on a group of criteria, it proposes promotions to increase sales and stock rotation. Before the automation, this process was manually executed two times per week, and it took about 100 hours of the employees’ time. Now, the robot executes the process every day, only taking up to 2-3 hours, making it 33 times more efficient. The robot generates express offers according to stock, expiration date or other variables. Additionally, the robot updates prices in the database and ERP automatically, and calculates and collects sales statistics.
In inventory management, automation can be used for automated purchasing, sending out alerts when stocks run low, or when there are changes in product demand. This kind of product data automation is incredibly valuable for brands that are growing their business. It helps spot best-selling products and revenue opportunities. Optimizing product sales is a tremendous benefit for all retail companies alike.
As a recap, here are some top use cases for retail automation:
- Inventory management, stock availability
- Supply & demand planning
- Updating product catalogues with real-time data
- Customer service tasks, like processing returned products etc
- Sales process and sales analytics
To summarize, there is no debate whether retailers should use automation. It improves nearly all parts of retail businesses: process automation increases operational efficiency while improving customer experience and speeding up service. It enables reacting quickly to constantly changing customer needs, lowering costs and resources all the while yielding superior customer service.
You can read more about automation in retail here.
Author: Paiju Koivula
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