Retail Therapy

The retail industry makeover continues.

According to various reports, clothing retailer Forever 21, Inc. may or may not file for Chapter 1 bankruptcy protection as early as Sunday. And according to a WSJ report could close some 700 of its stores in any case.

Yet another online retail outfit, Shopify, has acquired another e-commerce automation startup, 6 River Systems, for some $450M.

6 River System uses its Chuck autonomous vehicles that can move packages around warehouses, and according to VentureBeat, believes those robots can increase the speed and reliability of its warehouse operations “by empowering on-site associates with daily tasks, including inventory replenishment, picking, sorting, and packing.”

Considering the tight labor market, these AI and automation deals I’ve recently written about make a lot of sense. If companies can’t find employees to take those jobs, they hire robots and increase automation. But what happens in a down labor market?

See a recent report published by IBM’s Institute for Business Value: As many as 120M workers from the world’s largest economies may need to be retrained as a result of AI and automation. Summary of that post here. 

Shelf Life

On Tuesday California legislators passed AB5, a landmark bill that requires companies like Uber and Lyft to treat contract workers as employees. Workers must be designated as employees if a company exerts control over how they perform their tasks or if their work is part of a company’s regular business.

Expect Uber and Lyft’s autonomous vehicle efforts to speed up (as well as their lobbying efforts to gain an exception for its drivers to remain contractors). All those pesky humans, demanding rights like fair wages and health insurance!

On the subject of robots, Simbe Robotics has raised $26 million for autonomous inventory robots to inventory grocery shelves. A VentureBeat story indicates the brick-and-mortar automation market will be worth $18.9B by 2023.

Simbe’s robot, Tally, drives around a space to create a store map and then uses computer vision to “see” what products aren’t on a shelf and identify any missing facings, using RFID for its inventory counts.

VentureBeat reports a single robot can scan 15K to 30K products per hour, compared to the 10K-20K an average human employee can do in 20 to 30 hours. Human, 10-20K, 20-30 hours, Tally, 15K-30K per hour.

Humans will still do the restocking…for now. 

We’ll see how long their shelf life is.

McAutomation

Ronald McDonald retired around the time of the creepy clown sightings began popping up several years ago. But McDonald’s isn’t resting on its fast food franchise laurels.

Yesterday the company announced it had agreed to acquire voice AI firm Apprente to help the company automate drive-thru orders (which could also cut down on service times).

According to a report from CNBC, Apprente’s employees will be founding members of “McD Tech Labs,” a tech shop embedded in Mickey D’s global tech team.

This move builds on the company’s investment in March of Dynamic Yield, whose ML technology was deployed in more than 8,000 U.S. drive-thrus, and whose tech changes menus based on time of day, weather, traffic, and the customer’s order, with the end goal of upselling.

Today’s Morning Brew suggested this was a “defensive” move by McDonald’s, “ensuring it gets access to key AI tech before Wendy’s and Burger King can get their hands on it.”

There’s a lot at stake in the coming AI burger wars…turnover is inordinately high at fast food chains, and McD’s alone employs over 1.8M workers in 34,000 restaurants worldwide. Those algos don’t complain about low wages, few benefits, and long hours.

So in my best speech-to-text voice, here goes: Would you like fries with that?

Closing the Widening Skills Gap

IBM’s Institute for Business Value released a study on Friday focused on the impact of AI on the workplace.

The study revealed over the next three years, as many as 120 million workers from the world’s largest economies may need to be retrained because of AI advances and intelligent automation.

But less than half of CEOs surveyed said they had the resources needed to close the skills gap brought on by these new technologies. And the time it takes to close a skills gap through training has increased by more than 10X in just four years.

The study also revealed that new skills requirements are quickly emerging, while others are becoming obsolete. In 2018, the two top skills were behavioral: A willingness to be flexible, agile, and adaptable to change, and time management skills and ability to prioritize.

How to close the gap? The core recommendation is to take a more holistic approach by focusing on reskilling our workforce through development that’s multi-modal, personalized to the individual and built on data, learning journeys that are delivered through “experiential learning.”

You can read a summary of the research here.

Boxed In

Big news coming out of SCOTUS this morning: The Supreme Court ruled 5-4 against Apple in case involving its App Store, allowing iPhone users to move forward with an antitrust suit against the company.

According to a report from CNBC, the iPhone users argue that Apple’s 30 percent commission on sales through the App Store was passed along to consumers, an unfair use of monopoly power.

Apple argued that only app developers, and not users, should be able to bring such a lawsuit:

“Apple’s line-drawing does not make a lot of sense, other than as a way to gerrymander Apple out of this and similar lawsuits,” [Justice] Kavanaugh wrote.

Shares of Apple, already battered by trade concerns, were down more than 5%, lagging the broader market.

The result of the iPhone users’ litigation could affect the way that Apple, as well as other companies that operate electronic marketplaces like Facebook, Amazon and Alphabet’s Google, structure their businesses. For Apple, hundreds of millions of dollars in penalties could hang on the outcome.

And if you’re worried about becoming boxed in by looming new automation technologies, you might want to steer clear of the Amazon warehouses. 

Reuters is reporting that Amazon is rolling out machines to automate a job held by thousands of its workers: boxing up customer orders.

The company started adding technology to a handful of warehouses in recent years, which scans goods coming down a conveyor belt and envelopes them seconds later in boxes custom-built for each item, two people who worked on the project told Reuters.

Amazon has considered installing two machines at dozens more warehouses, removing at least 24 roles at each one, these people said. These facilities typically employ more than 2,000 people.

That would amount to more than 1,300 cuts across 55 U.S. fulfillment centers for standard-sized inventory. Amazon would expect to recover the costs in under two years, at $1 million per machine plus operational expenses, they said.

A video shot by Reuters accompanying the story suggested the human workforce decline would come through attrition: Amazon would simply “refrain” from refilling packing roles over time, a job that already has huge turnover work for its 10-hour shifts.

On the man v. machine front, it sounds as though the machine boxes that box the boxes themselves will eventually beat the humans hands down.

My question is, will the boxing machines ever buy anything from the company store?  

Will Amazon give them a discount for being so efficient at their jobs??  A promotion??

Maybe a corner office on the warehouse floor??