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If, as appears likely, the minimum wage increases to $15 for much of the United States, retailers might be bearing much of the cost of this societal shift. For low cost retailers or those that operate on slim margins, paying workers more makes it difficult to keep costs low. Accordingly, more and more of them are seeking solutions in automation and self-service technologies that can replace at least some retail workers in stores.

Lo-res_AROE10871-SFor example, McDonald’s is testing the use of about 10,000 touchscreen ordering systems in Europe to determine if customers will embrace them. Some reports suggest the restaurant chain also is playing with the use of robotic arms that would move the food from behind the counter onto customers’ trays.

Various supermarkets and home improvement chains already have self-checkout counters for customers willing to scan their own items. To support and extend these uses, Home Depot and Lowe’s are experimenting with ways to train customers in how to use the technologies. If they can increase customer adoption, they can reduce their labor needs, in that one employee can supervise about four self-service checkout lines, on average, rather than each checkout requiring a dedicated cashier.

The benefits for customers include the improved speed and reliability that such technologies promise. In particular, onscreen orders mean that customers can get exactly what they want. In fast food settings, they can create any customization option they prefer, rather than having to explain the complex ratio of pickles-to-onions that they want to a staffer at the counter.

Yet this form of customization is also distinctly impersonal. Without any access to customers, retail employees cannot improve their experience, ensure their satisfaction, distinguish the retail store, or even provide simple human interactions. If consumers visit public spaces to interact with others, self-service technologies are unlikely to meet their needs. And if every store has the same technology, they cannot differentiate themselves in the same way that a great retail employee does automatically.

Discussion Question:

  1. What are the advantages and disadvantages of replacing retail employees with technology?

Source: John Lofstock, Retail Wire, May 23, 2016