Retailers have been increasingly turning towards emerging new technologies to improve productivity, manage costs, as well as promote more efficient and entertaining shopping experiences.
Several U.S.-based companies, including Walmart (NYSE:WMT), Amazon (NASDAQ:AMZN) and giant supermarket chain Kroger (NYSE:KR), have recently invested heavily in automated systems to boost their operational capabilities, with an eye on bolstering their bottom lines.
Walmart, for example, recently teamed-up with Brain Corporation, a San Diego-based artificial intelligence (AI) company, to roll out a fleet of in-store floor cleaners.
Brain Corp claims its BrainOS platform currently automates more than a hundred of Walmart’s commercial floor scrubbers across the U.S., and the giant retailer expects to have around 360 robots powered by the platform in stores by the end of its fiscal year, January 31, 2019.
The move will certainly have an impact on Walmart’s workforce, as the machines infiltrate and replace human resources – and as job descriptions change.
John Crecelius, Walmart’s VP of central operations, said that BrainOS is “a powerful tool in helping our associates complete repetitive tasks so they can focus on other tasks within role and spend more time serving customers.”
Via https://newsapi.org online business online marketing online business opportunitiesWorking with “others”
Indeed, Walmart, along with the broader labor market landscape, is ripe to undergo a major transformation, amid the rising tide of AI and robotics deployments.
According to a recent study conducted by McKinsey Global Institute, more jobs than those lost or gained “will be changed as machines complement human labor in the workplace.”
McKinsey noted that partial automation will likely become more prevalent as machines complement human labor, and “jobs with repetitive tasks could shift toward a model of managing and troubleshooting automated systems.” The study pointed to Amazon, where employees who previously lifted and stacked objects “are becoming robot operators, monitoring the automated arms and resolving issues such as an interruption in the flow of objects.”
McKinsey added that even as workers become displaced by automation, additional economic growth, including from “business dynamism and rising productivity growth,” will continue to create jobs. Moreover, they said, technology itself has historically been a net job creator, with millions of positions having been created throughout the 1970s and 1980s, following the introduction of the personal computer – not only for semiconductor makers, but also for software and app developers, customer service representatives, and information analysts.
As technology develops, the labor market may indeed see a similar pattern of job creation over the medium-term.
The Bureau of Labor Statistics said it thinks computer systems analysts and computer developers in the U.S. could grow 9% and 24%, respectively, over the 10-year period to 2026, amid increasing use of IT services in healthcare and increased demand for computer software.
However, the BLS said given the geographical flexibility of computer programming, programmers in the U.S. are likely to decline by 7% over the same period.
Via https://newsapi.org online business online marketing online business opportunitiesRise of the machines
For its part, Brain Corp, which is backed by SoftBank’s (TYO:9984) tech-focused SofBank Vision Fund, as well as Qualcomm Ventures, has also been busy procuring machines for SoftBank Robotics.
In late November, the AI firm launched an autonomous vacuum cleaner for use in commercial spaces, such as retail and office environments. Sales of the devices, which are slated to begin in 2019, will focus initially on the Japanese market, underscoring the appeal of robotic appliances globally.
Brain Corp has positioned itself as part of a growing industry of new AI-based application developers, as global investments in robotics systems get set to surge.
According to the International Data Corporation (IDC), global spending on robotics systems and drones will rise more than 17.5% year-on-year to total US$115.7bn in 2019. Spending will be mainly fueled by China, with overall spending of US$38.5bn in the year ahead, while Asia-Pacific (ex-Japan and China) will be the second largest region with US$23.3bn, followed by the U.S. (US$17.2bn) and Western Europe (US$13.0bn).
John Santagate, research director at IDC, said that the “worldwide market for commercial service robotics will continue to grow at a rate of 20% per year for the coming five years.” He attributed the growth to “continued innovation in ease of use as well as the drive for flexible automation across industries.”
Santagate added he expects to see growth driven by “increased adoption of autonomous mobile robots and collaborative robots being deployed as a means to deliver improvements in capacity, productivity, and efficiency.”
While IDC anticipates that robotics systems will be the larger of the two categories through 2022, with worldwide robotics spending clocking-in at nearly US$103.5bn in 2019, growth in drones is set to outweigh robotics systems with 30.6% CAGR compared to 18.9% CAGR, respectively.
Via https://newsapi.org online business online marketing online business opportunitiesRobots without borders
Against this backdrop, scores of companies have been exploiting opportunities presented by technology to reap cost-cutting advantages and output benefits.
McAlinden Research Partners recently noted, for example, that robots are being “increasingly employed across all stages of the supply chain” — from raw commodities, to intermediate goods, and final delivery of consumer products.
MRP highlighted that in addition to Amazon’s and Walmart’s technology-driven strategies, SM Megamall, the Philippines’ second-biggest shopping center, will deploy three speaking androids in the first quarter of 2019 that provide mall directions and information on promotions and events.
Also, U.S. grocer Kroger and online UK supermarket Ocado recently partnered to announce they would build an initial US$55m automated robot warehouse, while Cainiao, a Chinese logistics firm — majority-owned by Alibaba (NYSE:BABA) — has opened a fulfillment warehouse with over 700 robots.
MRP also noted that mining firms Sandvik and Resolute Mining are currently working together to fully automate Resolute Mining’s Syama underground mine in Mali, West Africa through the implementation of Sandvik’s range of automation solutions.
Given the numerous global examples of how robotics systems have proliferated, MRP said “the transformation is already here and is increasingly upending all stages of the supply chain.”
Via https://newsapi.org online business online marketing online business opportunitiesTechnology supports corporate growth
In the meantime, Walmart handily topped market expectations in its third-quarter earnings report.
Walmart CEO Doug McMillon said that as the company benefits from an upbeat domestic economic environment, it is “accelerating innovation and utilizing technology to shape the future of retail.”
The firm’s total revenue rose 1.4% year-on-year to nearly US$125bn, with comp sales up 3.4% and adjusted earnings having climbed 8% to US$1.08 per share. Furthermore, Walmart said eCommerce sales surged 43% from the same year-ago period and guided for earnings for FY2019 of between $4.75 to $4.85 per share.
Walmart has also been leaning on technology for its plan to capture market share in Asia, where it purchased 77% of Indian eCommerce giant Flipkart in early May.
The U.S. retailer expects eCommerce to grow at four times the rate of overall retail, and thinks Flipkart will continue to benefit from leveraging AI to help expand its business in electronics, large appliances, mobile and fashion and apparel.
Walmart had entered the investment-grade corporate primary market in June with a whoppingUS$16bn bondin eight parts, which it primarily sold to finance its purchase of the company.
In its bid to outdo rivals, Amazon has also been busy pouring money into technology, with a reported aim to open as many as 3,000 AmazonGo – cashierless stores – across the country by 2021.
Note: This material was originally published onIBKR Traders’ Insighton December 4, 2018.
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