The Robots Are Coming!

by Andres Oppenheimer

  WRITERS, PHOTOGRAPHERS, AND VIDEOGRAPHERS TO MAKE DISHES MORE APPETIZING

  Will there be any room for spontaneity and innovation in restaurants? Yes, of course, according to what a number of industry futurologists told me. Human chefs in fine dining establishments will continue to be—as they always have been—true artists. They will always experiment with new combinations, new presentations, and new taste sensations. And to make their signature creations known, they will increasingly need photographers, videographers, virtual reality device operators, social network administrators, and website designers.

  Customers used to go to the restaurant, but now the restaurant will go to the customer. And in order to do so, each restaurant will need an army of professionals, including writers. Each dish will have a story, or maybe even more than one, that will need to be told so that people can read it on their cell phones while they’re waiting for their food. In addition to the number of calories and the opinions health experts might have about the nutritional qualities of that particular dish, restaurant writers will also tell us how and when a dish originated, where it is most popular, and what challenges it had to overcome before reaching your plate. The writer may even include the commercial and political conflicts that might have been involved…if the restaurant’s data manager determines that you’re interested in these sorts of things, of course.

  THE CRISIS OF RETAIL STORES

  In 2017, Macy’s—one of the most iconic department stores in America—announced that 10,100 workers would be laid off and sixty-eight locations would be closing across the country. This news made headlines, but it only confirmed an ongoing trend: retail outlets around the world were closing in record numbers because they could not compete with e-commerce. Besides Macy’s, in just the first few months of that same year, closings were announced for 552 Radio Shack stores, 400 Payless locations, 250 of The Limited, 138 JCPenneys, 108 Kmarts, and 42 Sears. A study conducted by Credit Suisse projected that as many as 8,600 brick-and-mortar stores would close by the end of 2017 alone, more than the 6,163 that had closed during the great recession of 2008, despite the fact that the U.S. economy had recovered significantly since that time.

  And while physical stores still account for over 80 percent of total retail sales, there is a “retail apocalypse” going on, and there’s no end in sight, according to Business Insider. Even Ralph Lauren, the iconic clothing label, announced the shuttering of its famous store on Fifth Avenue in Manhattan as part of its cost reduction plan. It was increasingly difficult for brick-and-mortar stores to compete with Amazon and other e-commerce companies, who among other things don’t have to pay rent or pass on the labor costs of salespeople to the public.

  Amazon has rocked the retail landscape like an earthquake. Tired of having to deal with traffic to travel to physical retail stores and wasting their time searching shelves to find what they want to buy, people are increasingly gravitating to online shopping. More stores are following Radio Shack into bankruptcy proceedings, and many suburban shopping centers are starting to look like ghost towns filled with empty buildings. And this trend may accelerate when virtual reality becomes more commonplace and people can browse store shelves from the comfort of their living rooms.

  It won’t be easy for brick-and-mortar stores to escape the current retail crisis: many stores that are trying to convert to full-blown online retailers are realizing that they are coming from far behind and have a lot of ground to make up. Amazon is enjoying a huge advantage, accounting for 53 percent of all online commerce, according to the eMarketer market research firm. The rest of the retail industry has to scramble for a piece of the remaining 47 percent of e-commerce sales.

  AMAZON IS WIPING OUT PHYSICAL STORES

  “Millions of retail jobs are threatened as Amazon’s share of online purchases keeps climbing,” read a recent headline on MarketWatch.com. The same article included a graph showing how Amazon’s annual revenue had grown from $20 billion in 2008 to nearly $170 billion in 2017. That’s over 20 percent a year. According to Rex Nutting, who wrote the article, Amazon could have annual revenue in excess of $500 billion in just five years, and most brick-and-mortar stores will be a thing of the past. It’s no coincidence that Jeff Bezos, Amazon’s founder, overtook Bill Gates in Forbes magazine’s ranking of the richest people in the world. Amazon’s plans to create 100,000 jobs should not be cause for celebration because what the company is not telling us—Nutting argues—is that “every job created at Amazon destroys one or two or three others” at Macy’s, Sears, Kmart, or other brick-and-mortar retail stores.

  So what’s the big deal? some could ask. Can’t workers who lost their jobs at big physical stores just go find a job at Amazon or other online retailers? Not really, says Nutting, because Amazon needs many fewer workers than Macy’s or similar physical department stores that have salespeople, cashiers, guards, and other employees. Amazon, on the other hand, has mainly workers who pull the product and load it onto trucks: workers who are increasingly being replaced by robots.

  In the United States alone, around 12 million retail sales jobs are currently threatened by Amazon, Nutting said. Especially endangered are the 6.2 million people who work for companies that have outlets at shopping centers, like furniture stores, accessories, electronics, clothing, sporting goods, and general merchandise stores. And now Amazon is entering new business sectors, including supermarkets and the delivery of packages with drones that, according to a company announcement, will soon be able to make home deliveries straight to your front door. How many of the 600,000 U.S. Postal Service jobs will be terminated when Amazon’s drones take to the air? Nutting wonders.

  NOT EVEN GROCERY STORES ARE SAFE FROM AMAZON

  In 2018, amid great public fanfare, Amazon opened its first fully automated supermarket in Seattle, Washington. A commercial that aired on YouTube in 2016, titled “Introducing Amazon Go,” had already hit 11 million views by the time of the store’s opening. The video shows several thirtysomethings shopping happily, selecting their items with the company’s new app. “No lines. No checkout. You just grab and go!” says the video.

  It’s true: in this new automated supermarket, there are no cashiers, so there’s no need to wait in line before you leave. You just download the app on your smartphone, walk in, and start shopping. Every time you grab an item off the shelf, it’s automatically added to your virtual cart. The customer doesn’t have to do anything. “It’s that simple,” the commercial says. It then shows a young woman putting a cupcake back on the shelf: “If you change your mind about that cupcake,” it continues, “just put it back.” Once you’ve finished shopping, just walk out: your purchases will automatically be charged to your Amazon account. According to press reports, the company planned to open twenty fully automated physical stores within the next two years, and two thousand in the next ten.

  Wasn’t Amazon afraid that a grocery store without cashiers or salespeople would stir up criticism? Wouldn’t there be protests from the 3.5 million cashiers working in the United States? Amazon has said that these workers won’t be fired but rather reassigned to other positions like helping customers who have technical difficulties or who are having trouble finding the items they want in the store. Apparently, the company made a calculated bet that more people would be more excited by the novelty of a store with no checkout lines than upset by the possibility of cashiers losing their jobs. And apparently they were right. When I last checked in to watch the “Introducing Amazon Go” commercial on YouTube, 87,000 had given it the thumbs-up of approval while a mere 8,400 had given it a thumbs-down. In other words, those who approved of the automated supermarket outweighed the naysayers nine to one. And on January 22, 2018, when the Seattle store first opened its doors, there was a big crowd waiting to enter. Ironically, a line of people had formed outside a supermarket whose main attraction was supposed to be eliminating lines.

  THE ROBOTS ARE ALREADY BEHIND THE COUNTER />
  How long before Pepper, Nao, and other robots I saw in Japanese banks and stores aren’t simply standing at the entrance to greet customers but are also behind the counter replacing the salesclerks? On a recent visit to Silicon Valley, I was able to see robot “sales assistants” at Lowe’s, one of the largest home-improvement chains in the country. When I entered the giant store, one of these robots was walking—actually it was rolling, because it had wheels—down the main entrance area. It was a white tower about five feet tall with electronic tablets embedded in its chest and back, cameras on its sides, and a dome-shaped sensor on its head.

  According to executives of Fellow Robots, the company that created them, the robots weren’t built with arms and legs because “we were afraid that people would get scared if they turned down an aisle and suddenly found themselves face-to-face with a human-looking robot.” So, to avoid potential heart attacks, the company designed the robots as rolling towers with a tablet on the front to interact with customers and one on the back to advertise current sales.

  When I walked up to the device, it told me in a female voice, “Hi, I’m a robot. Can I help you find something?” Without waiting for me to respond, she continued: “What are you looking for today?” When I said, just to test the machine, that I was looking for lightbulbs, she raised her tablet slightly and showed me a dozen or so different images of lightbulbs with their corresponding prices. I tapped to select one, and the robot said, “That item appears to be in aisle twelve. Would you like me to take you there?” I responded affirmatively, and the robot said, “Sure, follow me.” With that, she made a 90-degree turn, shifted from side to side as if searching for the right path, and rolled off.

  It wasn’t exactly a straight shot, because the robot had to stop from time to time. The sensors seemed to be confused every time we passed another customer, and the robot had to reset itself before getting back on course. But eventually she led me to the shelf where the lightbulbs I had chosen were located. Like many of the robots I had met in Japan, this one was obviously still learning. But it was headed in the right direction and was likely to learn rapidly from her own experiences and those of her fellow robots. With time, she would no longer need to stop so often on her way to the lightbulb section.

  THE LOWEBOT DOES TWO JOBS

  According to Fellow Robots’ CEO Marco Mascorro, his robots working at Lowe’s stores—known as LoweBots—perform two different kinds of jobs: they assist customers, and they track store inventory. The latter function is important, because they can count and replace items in real time, as soon as products are pulled from the shelves, he told me. His LoweBots haven’t eliminated any human jobs, he claimed. Instead, they have allowed human employees to skip the most annoying parts of their jobs, like taking inventory, and focus on what they like doing best.

  “Before, employees had to spend hours walking the aisles and checking to see what was missing from the shelves,” he told me. “And in a store with over fifty thousand items, that’s a really hard job to do. Now the robots do that for us, and employees can spend their time doing what they really enjoy, which is using their experience to teach clients how to fix a leaky kitchen faucet or replace an old pipe.” I gave Mascorro half a nod, as if saying “maybe, maybe not.” When I left the store, I found myself wondering whether the next stage in LoweBot development would be doing what employees supposedly liked best: instructing customers how to make basic home repairs. I wouldn’t be surprised if that starts happening in a very short time.

  WE’LL BE HOUSE HUNTING WITH VIRTUAL REALITY HEADSETS

  As if e-commerce and robots weren’t enough of a threat, human salespeople will see their jobs cut back by the growing use of virtual reality headsets, with which buyers will be able to see products in full-size 3-D images from the comfort of their own homes. On one of my visits to Google headquarters in Mountain View, California, I was given a demonstration of virtual reality shopping that left me speechless, although—as with any technology that’s growing exponentially—what I saw that day may be old news by the time you read these lines.

  I was sitting in a Google conference room with Sophie Miller, a business development manager for Daydream, the Google division that produces the company’s augmented reality and virtual reality devices.*2 As she explained, augmenting reality with smartphone apps already allows us to virtually “test” different pieces of furniture in our living rooms so we can decide what best matches the color of our walls. In much the same way, we can “try on” different styles of clothes so we can virtually see how they look on us.

  Miller took a Google device similar to a smartphone but specifically programmed in augmented reality, pointed it at one of the walls of the conference room, and showed me an image of the very same room without any furniture. On the screen, the place had literally and instantly been emptied. Then she used the device to search the Internet for a furniture store and began adding a number of different tables, chairs, and desks to the empty virtual room so we could choose the styles and colors that we liked the most.

  “Visualization is a big part of sales,” she said. “If a customer can see a product, they are three times more likely to buy it. Before, that wasn’t always possible, because stores might not have every style of a chair in every possible color in inventory. But with augmented reality, you can see every possible combination in the actual room where you want to put them.”

  Augmented reality means businesses won’t need the square footage they once did, because they won’t need to have so many products on the sales floor, Miller continued. “Retail companies are always asking how we can do more with less space. Well, augmented reality goes a long way to solving that problem.” Several BMW dealerships already have headsets to help their customers order the car they want. With these devices, customers can visualize different colors for the body and the seats, and see how the automobile would look with different sets of accessories, she added.

  VIRTUAL REALITY: THE NEW TECHNOLOGICAL REVOLUTION

  Using augmented reality devices will help both customers and stores avoid a number of headaches, such as returning items, Miller said. “When you’re buying an oven or a refrigerator, one of the biggest problems is whether it will fit in your kitchen,” she explained. “Returning them costs the stores a lot of money in terms of time and transportation costs, and for customers it means taking another day off work to wait at home for another unit to be delivered. But with augmented reality, you can set a full-size 3-D oven or fridge in your virtual kitchen and see how it fits before ordering it.” This wasn’t possible when we were able to shop online in only two dimensions, but it is now, she added. Outlets might not disappear completely, but 3-D augmented reality will make them much less necessary.

  But was Miller biased by the fact that Google has its own augmented reality device to promote? According to a study by Bank of America and Merrill Lynch aimed at advising their clients about potential investments, virtual technology and augmented reality represent a new “technological revolution” similar to the one we experienced with the emergence of the Internet and smartphones. According to their study, virtual reality goggles and headsets could become “the one device to disrupt and rule the world of technology.” The study went on to predict that virtual reality “will ultimately impact every sector and company by transforming how they communicate, design, manufacture, and sell products.”

  As with smartphones, which had been around for some time but became a global phenomenon only in 2007, virtual reality has been used for decades—by pilot simulators at flight schools, for instance—but really took off when the Pokémon Go game soared to record sales in 2016. The study predicted that the price of virtual reality devices would reach an “inflection point” in early 2020, when they would become objects of mass consumption. Among other signs that virtual reality will revolutionize the world of technology in coming years is the fact that there are already many “unicorns”—start-ups
that have more than $100 million in investment—in this field. One of them, Oculus, was bought by Facebook for $2 billion.

  What’s more, with advances in the sensors, battery power, and memory of cell phones, we will soon be able to have virtual reality experiences with our smartphones without the need for visors or goggles, the study predicts. It’s hard to imagine that people won’t prefer to do their shopping from their cell phones with virtual reality. Not only will they save time and energy, but it will enable them to instantly see comparable products and their respective prices as well. How can brick-and-mortar stores compete with that?

  TECHNO-OPTIMISTS CLAIM THERE WILL BE MORE SALES JOBS

  While the most pressing challenge for physical stores is e-commerce, which has already left tens of thousands of salespeople out in the rain, techno-optimists like Bret Swanson argue that online retail companies end up creating more jobs than they destroy. Amazon, he points out, went from having just 32,000 employees worldwide in 2012 to 341,000 in 2017.

  According to a study titled “The Coming Productivity Boom” by coauthors Swanson and Michael Mandel, e-commerce created 355,000 U.S. jobs between 2007 and 2017, while brick-and-mortar retailers—including department stores, jewelry stores, electronics stores, and bookstores—lost 51,000 jobs during that same period.

  Swanson and Mandel acknowledge that e-commerce does end up killing some jobs, but they argue that the same thing happened several decades ago when shopping malls put small, family-owned operations out of business. Mandel also disputes the argument that e-commerce jobs don’t pay as well as physical commerce does. “Production and non-supervisory workers in the e-commerce sector, including fulfillment centers, earn an average of $17.41 per hour,” he says, “compared to $13.83 in general retail—a 26% premium.” Skeptics, however, question the methodology of these studies, which were sponsored by tech firms. They add that the exponential increase in e-commerce sales will make job losses much more severe as time goes by.