1、Retail Practice Automation in retail: An executive overview for getting ready The winners in the sector will be those who understand the implications of automation and act quickly to respond to them. May 2019 ?/Getty Images by Steven Begley, Bryan Hancock, Tom Kilroy, and Sajal Kohli Retail is under
2、 pressure. Margins are stressed from all sides: higher costs to manage e-commerce supply chains, growing demands from suppliers to pass on raw-material cost inflation, higher investments to match new competition, and steadily rising labor costs. At the same time, the customers expectations continue
3、to surge as digital natives and disruptors alike raise the bar for personalized serviceon the back of what, at times, is an advantaged cost structure. As retailers struggle to adapt, and even to survive, they increasingly pursue automation to address margin strain and more demanding customer expecta
4、tions. Automation, however, is a new capability for all but digital natives, and the sophistication in approach varies accordingly. Over the past three years, the McKinsey Global Institute has conducted a broad-based research initiative on automation across sectors. This research has shown that abou
5、t half of the activities in retail can be automated using current, at-scale technology. While this number is alarming, the change will be less about job loss and more about the evolution of jobs, the creation of new ones, and reskilling. Only about 5 percent of all jobs can be fully automated with c
6、urrent technology, and automation will lead to the creation of jobs as companies invest in growth. New realities In our work in the retail sector, we see automation reshaping business models and the broader value chain. Lets start with four new realities we observe among retailers. 1. Margin pressur