As the global economy emerges from the 2020 pandemic, organizations are struggling to find and retain their best talent. A July 2021 survey by the Society of Human Resource Management (SHRM) found that 90% of retail employers are finding it challenging to fill open positions.
Globally, retailers are hugely dependent on the availability of qualified workers. Among the recent trends, the Great Resignation also contributes to employee attrition in the retail sector. In fact, a 2022 LinkedIn Workforce Confidence report stated that nearly 25% of retail workers are planning to leave their current jobs.
How does the staff shortage impact the retail industry, and how are businesses responding to this challenge? Let’s discuss.
How the Labor Shortage Is Impacting the Retail Industry
According to Pete Blair of Berkshire Grey, the current labor shortage is impacting the retail industry in the store and distribution areas. Blair adds that “younger generations don’t want these jobs,” nor do they want to work in distribution centers.
Retailer services like home deliveries, BOPIS, and curbside pickups are further adding to retail challenges. In this labor-intensive industry, retail stores need cheap labor to fulfill customer orders, particularly in the eCommerce domain.
Mark Baum of FMI states that employee turnover is not a new phenomenon in the grocery industry. He points out that food retail employers saw a turnover rate of 41% back in 2014. He adds that labor shortages are not just present at the store level but across the supply chains. This includes distribution centers, transport, and manufacturing facilities.
Stephen Midgley of Toronto-based Invafresh also talks about labor shortage leading to a loss of morale among existing employees due to overwork. He adds that “reduced labor has led to problems like depleted stocks in stores and providing customer service.” The shortage of skilled labor has even caused some retailers to close their stores or operate on reduced hours.
On the supply chain front, driver shortage (along with higher fuel costs) is now impacting transportation services. According to the American Trucking Association (ATA), the industry was short of around 78,000 drivers in 2022. A 2022 compensation study released by ATA found that the average pay of a truck driver is $69,000 (an 18% increase from 2019). However, the higher pay is not translating into more drivers.
Can technologies like Computer Vision (CV) and Artificial Intelligence (AI) help address the labor shortage in the retail industry? Let’s discuss that next.
How CV & AI Technologies Can Overcome Labor Challenges in the Retail Industry
Retail companies are turning to technologies like AI-enabled computer vision to address their labor-related challenges. Nearly 17% of global retailers are planning to deploy CV technology in their stores between 2021 and 2023.
Among the popular use cases, CV-enabled surveillance devices can detect and identify objects in a variety of environments. Effectively, this technology is helping the retail industry by reducing its dependence on human workers.
Here are 4 use cases of CV technology in the retail industry:
1. Self-Checkout Counters
After the 2020 pandemic, self-checkout counters have almost doubled in number. In 2021, self-checkout transactions accounted for 30% of all transactions in grocery retail stores. Without any barcode scanning, touch-free checkout systems leverage their CV capabilities to identify any item. On average, self-checkouts complete transactions in just 85 seconds.
2. Inventory Control
Inventory problems in 2020 created losses of $580 million for global retailers. Favorably, retailers can enhance inventory management using CV technology. For example, CV-enabled sensors can:
- Detect any missing or misplaced inventory items
- Identify low stock levels
- Facilitate quality control of inventory items
3. Shelf Management
As part of in-store shelf management, product replenishment is one of the most labor-intensive and time-consuming activities. Empty shelves can frustrate most retail customers.
Retailers can utilize computer vision to detect missing shelf items and ensure maximum availability. Additionally, CV-enabled sensors can detect any damaged or misplaced items on store shelves.
4. Improved Shopping Experience
AI-enabled computer vision can also enhance the in-store shopping experience for retail consumers. This means that retail stores can work with lesser staff and save on their labor costs.
Here is how CV and machine learning can combine to improve customer experience in retail stores:
- Monitor any suspicious shopper behavior in the parking lot or inside the store.
- Create heat maps based on consumer movement to optimize the store experience.
- Collect and measure valuable customer data from daily footfalls, consumer interactions, and shopping time.
Conclusion
In the wake of the Great Resignation wave, retailers are turning to advanced technologies like AI and Computer Vision to meet their labor shortage. In this blog, we have looked at some retail areas where CV technology can make a significant difference.
At KamerAI, we have enabled retail companies to leverage our cutting-edge computer vision platform to track their store footfalls, analyze customer activity, and analyze product placements across stores. We believe that to address the growing labor challenge, retailers need a comprehensive CV platform that integrates with core business systems and overlaps multiple vital processes instead of a “piecemeal” solution. We endeavor to provide that to our retail customers.
Learn more about how CV technology can overcome the labor shortage in your retail company by connecting with our consultants today.
