Automation is coming to a cannabis retail store near you
Retailers may not have a choice
Most retail chains are struggling to make money. Margins are slim, competition is fierce and employee turnover is high. Unfortunately, there is only so much cost you can prune and assortments you can optimize. For many companies, it’s time to consider more innovative ways to compete. Automation should be on your list.
Retail automation is everywhere. You can't go into a Walmart without being directed toward automated checkout kiosks. I visited a waiter-less Tokyo sushi bar that featured touchscreen ordering, direct-to-table food delivery and contact-less payments. Many people frequent Amazon Go stores, where they enjoy ‘grab and go’ shopping.
Automating the in-store buying process has a compelling value proposition for many retailers. It can fill staffing gaps (due to labour shortages, high turnover), enhance the consumer experience (improving convenience, giving product recommendations) and boost the productivity of existing workers (they are better able to allocate their time, deal with crowds and cope with repetitive tasks).
Automation’s biggest benefit may be its ability to collect copious amounts of consumer data, which could improve decision making around your merchandise mix, inventory planning and pricing.
There are a myriad ways retailers can leverage automation. In a relatively simple execution, McDonalds allows buyers to place food orders through kiosks.
More strategically, automation can be used to differentiate your brand and in-store presence. Many years ago, I was a brand manager on Clarion, one of P&G’s cosmetic brands. Clarion’s strategy was to help consumers make personalised cosmetic choices at the point of sale. P&G deployed a self-serve, on-shelf computer which guided the shopper through choosing the right lipstick, blush or foundation based on their physical characteristics (e.g., hair colour, skin tone) and usage occasion & needs (e.g., daytime, nighttime).
Today, cutting-edge automation tools are exponentially better. They feature: AI-driven recommendation engines, advanced user interfaces and cross platform data integration.
Any retail automation exploration should start with foundational principles. For example:
1. Align your automation vision with your corporate and brand strategies, not the other way around.
2. Ensure the regulations allow for shopper automation.
3. Segment your consumers by their needs, consumption and buying behavior.
4.. Target ‘low touch, high consumption’ buyers. Provide service and purchase options as many consumers will still prefer to deal with a human.
5. Capture best practices from non cannabis retailers.
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