Soup-To-Nuts Podcast: AI can help retailers struggling with labor shortage do more with less

13-Sep-2021 - Last updated on 13-Sep-2021 at 13:40 GMT

Source: Getty/Mihai Sebastian

Retailers struggling with labor shortages are offering higher pay and better benefits to fill vacancies – but according to one industry player they also should embrace automation to ease the burden on and maximize the efficiency of existing staff to maintain employees and meet consumer needs with fewer resources.

In the first months of the coronavirus outbreak, the Bureau of Labor Statistics reported non-farm US jobs dropped a dramatic 22.3 million from 152.5 million in February 2020 to 130.2 million two months later in April. Among these were 49,000 jobs at grocery stores. Over the next year, the Bureau of Labor Statistics reported these jobs rebounded to 144.3 million – but this is still woefully short of what is needed to rebuild the economy and ensure a steady, safe and sufficient supply of food to American consumers. According to the Consumer Brands Association, in August there were 826,000 openings in manufacturing – placing competition for talent “at its peak.”

In response, most groceries, big box stores and other retailers are offering higher wages, signing and referral bonuses, better benefits and work-life balance perks. But, as illustrated by the ongoing high rates of unfilled positions, throwing money at the problem isn’t a panacea, and retailers need to explore other options – including artificial intelligence and increased automation.

In this episode of FoodNavigator-USA’s Soup-To-Nuts podcast, artificial intelligence solutions provider Birdzi’s CEO Shekar Raman shares how AI can help retailers do more with less by empowering consumers so they don’t need as much assistance from busy associates. He also explains how automation can maximize the efficacy of existing employees and create potentially more desirable positions for people who took time off to reassess their priorities and elevate their skills during the pandemic.

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Retailers must understand why vacancies linger to offset their impact

Depending on who you ask, the struggle to hire sufficient employees can be attributed fear of COVID-19, pandemic-related stimulus or just a blip in the economy that eventually will work itself out. Raman believes it is a combination of factors, and that it is unrealistic to think that the labor market will return to its pre-pandemic level anytime soon – heightening the need for other alternatives.

He explains that many people who worked in retail or at manufacturing facilities and lost or left their job during the pandemic are hesitant to return because they don’t like the hours, the exposure to the coronavirus, and increased aggression from consumer, or because they learned new skills during the pandemic and want to try something new.

This hesitancy has sent the industry down a different path, where many players are looking at automation and other process changes that can make up for the labor shortage, “whether it is marketing and trying to automate more stuff or whether its logistics and fulfillment as the drive towards ecommerce goes up,” Raman said.

Empowering consumers eases pressure on associates

According to Raman, there are three main ways artificial intelligence can ease labor-related pressures: the first is leveraging automation to improve customer engagement, the second is to facilitate fulfillment and operations and third is enhanced logistics in the back office.

As a tech company focused on building human relationships, Birdzi specializes in the first area – improved customer engagement – where Raman says small changes can have an outsized impact on how shoppers and employees experience the retail environment and long-term loyalty.

For example, he said, as increasingly popular as ecommerce is, most consumer still shop in store and retailers can make that experience better without taxing already strained staffs by empowering consumers to find products and answers they need digitally rather than by standing in line at customer service.

One way to do this is with automated promotions shared via email, text or other mobile device notifications that give shoppers personalized recommendations and discounts which are taken at the register – alleviating employees of having to manually hang discount signs. Birdzi’s VISPER platform can also streamline promotional activity for the marketing department – freeing up more employee time.

Another way Birdzi can help retailers improve the consumer experience and alleviate pressure on store associates is with its personalized wellness solution, which combines nutritional science, AI, machine learning and shoppers’ profiles to empower consumers to find more easily the products that fit their diets.

As Raman explains, this service saves consumers time by educating them about the foods they want to eat and gives them the sense the grocer cares about them and their health. It also can promote private label, give retailers insights into what customers want and offer more targeted recommendations for more cost-effective ad spend and greater ROI.

Predictive analytics can help retailers staff shifts according to demand

From an operational and back office point of view, Raman said that AI and automation can help retailers better understand shopping patterns to predict inventory and staffing needs.

“One of the studies that we’re currently doing is trying to understand how weather patterns and events in your local town impact demand for certain types of categories or foods, and see if that can be built in to provide intelligence back to the retailer for stocking and making sure that they’ve got a supply,” he explained.

Likewise, by better understanding in-store traffic patterns, retailers operating with skeleton crews can ensure team members aren’t overburdened with additional, unnecessary shifts during quite times.

‘None of these technologies … can operate without that data’

While AI and automation can provide significant relief on the labor front, it isn’t a magic wand and it requires a bit of upfront work – including ensuring the data on which it is based is ‘clean’ and that operators – ie retailers – have an open mind.

“The number one thing that has to happen [is retailers] need to get really good at managing that data so it is a good clean record of all your product and has images and shopper data, because none of these technologies that we talked about can operate without that data,” he said.

“The second thing which, I think, is as important” is for retailers to “have a sense of innovation and some drive for innovation,” Raman said. “Typically, supermarkets have been very operationally focused, clearly because their margins are low so they have to make sure that the point of sale system is going as smoothly as possible … but as there is more automation happening, they can start thinking internally about innovation” and the changes they want to make.

Ultimately, there are lots of opportunities for AI to boost business and ease labor pressures, but retailers need to know their goals and be willing to do a bit of leg work to make what currently might feel impossible possible.