Morning Brew - ☕ Bringing down the warehouse

Supply chains adapt to a new wave of AI automation.
April 17, 2023

Retail Brew

Listrak

Let’s start the week with one strategy for dealing with the inevitability that we’ll all be replaced by AI. At a McDonald’s drive-thru in Minnesota, customers are greeted and prompted throughout the process by a robotic voice. But when they roll up to the window to pick up their orders, they’re handed their food by Andrew Gotham, 19, who continues to speak to them in the robot voice he’d been using all along. “AI’s not taking my job,” Gotham, who’s pursuing a career in robotics, told Fox affiliate KMSP. “I’m taking its job!”

In today’s edition:

—Maeve Allsup, Katishi Maake

TECH

Supply and demand

Workers in a warehouse move around robotic arms. Covariant

In an open floor-plan office in Emeryville, California, tucked between Berkeley and Oakland, a mechanical arm in a glass case is hard at work around the clock, transferring packaged T-shirts from one bin to another on a conveyor belt, long after office workers have gone home.

This particular AI-powered robot is not in a warehouse: Robotic induction is one of the many solutions being tackled by Covariant—a robotics company whose founders include scientists from OpenAI—in its Bay Area lab, where the wave of AI-powered automation currently sweeping retail is on full display.

Warehouses are excellent training grounds for AI, because of the sheer number of products that pass through them, said Covariant co-founder and CEO Peter Chen.

“If you want to build a general AI brain for robots, there’s no better place to start,” Chen said. “Everything that we interact with flows through some warehouse somewhere.”

Robot-powered warehouses may sound a bit like the start of a sci-fi film. But mesmerizing rows of robotic arms aside, AI automation in parts of the retail supply chain known for repetitive, manual work comes with new challenges, changing not only the nature of the work itself, but how learning to work happens.

Keep reading here.—MA

     

TOGETHER WITH LISTRAK

Put a face to your name—correctly

Listrak

Personalized marketing is the name of the game these days. How to do it? Call in the influencers. Seriously, because 75% of consumers are more likely to make a purchase if it comes with a personalized recommendation.

But influencing is harder than it looks. You’re gonna need some help.

Luckily for you, Listrak can show you how to ace it. Their Identity Resolution Marketing solution, GXP, identifies the anonymous traffic that comes to your site from your influencer(s), then collects the essential zero- and first-party data so you can personalize the shopping experience and future shopping experiences to drive more conversions.

Want the deets? GXP is a white-glove, full-service model run by a team of experts who guarantee its revenue. Brands like Tula Skincare, Le Creuset, and 7 For All Mankind love it.

Capitalize on the traffic influencers send to your site. Try Listrak’s GXP 120-day risk-free pilot.

RESALE

Recycle, reuse, refurbished

Ebay HQ Steven ArnoldEbayCC BY 3.0

When discussing buying or selling products secondhand, clothing typically gets all the attention. But fast fashion isn’t the only space where products’ life cycles can be extended.

EBay is one of the original marketplaces for consumers to sell almost anything they wanted to get a quick buck out of, and now the company’s refurbished program has opened the door for retailers to do the same. Buying refurbished products—mostly electronics and home goods—is another way buyers are looking to make their dollar stretch and sellers to get the most on the margins without being wasteful.

“In the past, retailers were not the most savvy about putting these items back into circulation. It wasn’t the most cost-effective process for them,” Mari Corella, general manager of home and hard goods at eBay, told Retail Brew. “It was easier for them to either liquidate the product as is or sometimes even go as far as to destroy it—that’s becoming a less-common practice now.”

Keep reading here.—KM

     

EVENTS

Apple of India’s eye

Illustration of Apple logo with Indian flag overlay Francis Scialabba

Glad you’re here with us to start the week right. We’re in New York City, and spring has officially sprung. Let’s get into what’s going on in the retail world this week.

In openings: Apple is set to open its first stores in India this week. The first will open April 18 in Mumbai, and the second location in Delhi will open April 20. Bloomberg reported CEO Tim Cook may travel to the country for the occasion.

  • Apple wants to decrease its dependence on China and make headway in India. “I’m very bullish on India,” Cook said during a February earnings call.

On April 19, Walmart is set to reopen a location in Chesapeake, Virginia, that was the target of a mass shooting in November 2022. There will be a memorial to the six victims on the premises, but Walmart also redesigned and remodeled the store to enhance the customer experience, offering an updated look, interactive features, and new shopping options.

In earnings: Procter & Gamble has an earnings call on April 21, and we know inflation and its effects on product pricing will be top of mind. In January, the company raised its sales forecast as it announced it would continue to raise prices.

  • Although inflation fell YoY in March, it’s still higher than the Fed's 2% target. While some companies are passing on higher commodity prices to their consumers, others are asking suppliers to lower production costs so they don’t have to.—KM
     

SWAPPING SKUS

Today’s top retail reads.

Awolmart: What it means that Walmart is closing four of its eight stores in Chicago. (CNN)

Growth strategy: How VF Corp and its Timberland, North Face, and Vans brands are supporting regenerative cotton crops. (CNBC)

Mom-and-popular: Some rural general stores are making a comeback. (CBS News)

WHAT ELSE IS BREWING

  • Walmart’s chief merchandising officer for its US operations, Charles Redfield, is stepping down, according to a memo shared with CNN.
  • Ben & Jerry’s workers at its flagship shop in Vermont filed for a union election.
  • Best Buy laid off hundreds of store workers.
  • Swed House, a Belarusian retail store that intentionally resembles Ikea, opened its first store in Russia, from which Ikea withdrew after Russia invaded Ukraine.
  • Ynsect SAS, a French startup focused on increasing insect protein consumption by pets and humans, raised $175 million.
  • Amazon’s Alexa and cloud computing service suffered a brief outage on Sunday.

HOT TOPIC

At the mall, it’s where band tees are the only tees. In Retail Brew, it’s where we invite readers to weigh in on a trending retail topic.

Delivery Drivers for apps like DoorDash and Uber Eats told the New York Times that while tips went up at the height of the pandemic, they’re now way down, and many are struggling to make a living with inflation.

You tell us: How have you been tipping restaurant delivery drivers? Cast your vote here.

Circling back: Last week, we asked you about Levi’s partnership with AI studio Lalaland.ai to generate a wide range of models wearing its clothing in product shots to represent people of different body types, skin colors, and ages. Levi’s said in a statement that these virtual models “can potentially assist us by supplementing models and unlocking a future where we can enable customers to see our products on more models that look like themselves, creating a more personal and inclusive shopping experience.”

But days after the announcement of the partnership, social media was flooded with posts criticizing the move. “Your diversity doesn’t count if you’re not diversifying who’s on the payroll,” one Twitter user wrote.

We asked if you thought Levi’s should be lauded for using AI tech to create more diverse computer-generated models for its clothing, or criticized because that’s no substitute for hiring more real-life diverse models? The most popular response, 42.7%, was that Levi’s should be criticized for using AI tech to create more computer-generated diverse models because Levi’s should be focused instead on hiring more real-life diverse models. Another 29.8% thought Levi’s should be both lauded for using AI tech to create more diverse computer-generated models for its clothing, and criticized because that’s no substitute for hiring more real-life diverse models. Another 24.4% thought Levi’s should be only lauded for the effort, while 3.1% didn’t know or weren’t sure.

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Written by Maeve Allsup and Katishi Maake

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