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6 mins read

Retail Accounts Payable Automation

Automation in Retail: Reshaping the Future of Shopping

by Yooz on 03.20.2023

automation in retail

Retail is evolving. More than ever before companies are struggling to adapt, finding themselves caught in a balancing act between a reliance on suppliers and vendors to keep their inventory stocked and the need to adapt to a changing audience and shifting consumer expectations. Margins are tight, costs rising, and an increasing tech savvy generation is fueling a rise in e-commerce. 

All of these and more have led to a digital transformation over the past few years, one in which retailers have been forced to adopt new technologies across the entire retail process lifecycle just to stay alive (let alone competitive).  The use of automation in particular will reshape the way that retail does business, creating organizations with streamlined operations and better data and analytics to make real-time strategic decisions.


Let's explore retail Accounts Payable automation in more detail. 


What is Automation in Retail?


Automation in retail refers to the use of technology to improve processes and ensure efficiency in operations with minimal human intervention. The transformation is happening rapidly; the World Economic Forum estimates that the sector is already 40% automated and could just to 60-65% over the next three to four years. Here are some of the most common forms:


  • Chatbots: Retailers can use chatbots to automate customer service tasks such as answering common questions and handling returns and refunds.
  • Self-checkout systems: Self-checkout systems allow customers to scan and pay for their purchases without the assistance of a cashier, reducing waiting times and increasing customer satisfaction.
  • Automated warehouses: Automated warehouses use robots and other technologies to automate tasks such as picking and packing orders, reducing errors and increasing efficiency.
  • Automated inventory management: Inventory management software can automatically track inventory levels, generate purchase orders, and reorder products when stock levels fall below a certain threshold.


While you've probably already experienced changes via the first two, it is the latter ones - the use of Artificial Intelligence (AI) in supply chain processes - combined with automation in finance where the difference rapidly becomes clear.


The Importance of Automation in Retail


The adoption of automation in retail has had a significant impact on the industry, serving as a key component of digital transformation and transforming the way that retailers operate. Simply by automating routine tasks such as inventory management, ordering, and payments - all previously performed by humans - the use of automation in retail allows retailers to reduce their costs and improve the customer experience.  Here are some of the key benefits:


Increased efficiency


Automation helps retailers to perform routine tasks faster and more accurately, freeing up employees to focus on other, higher-value tasks such as service and sales. It also provides accessibility 24/7, from anywhere at any time via a mobile connection. In addition, multi-location stores have access to a centralized data storage so that everybody is working with the same information.


Reduced operating costs


Less manual labor and paper process-related activities means lower operational costs for labor expenses and hard costs such as paper, mail, and storage facilities.


Greater accuracy


Automatic processing and double- or triple-checking data reduces the risk of human error, improving accuracy in inventory management and accounts payable processing.


Increased security


By reducing the risk of human error and using verification solutions, automation helps to prevent both internal and external fraud.


Improved customer and supplier experience


Retailers are better able to provide faster, more convenient service to customers and suppliers, reducing wait times and providing real-time access to information. The overall effect is a greatly improved experience for both sides.


Real-time insights


Automation allows retailers to collect and analyze data in real-time, providing insights that help make better strategic decisions.


Employee satisfaction


One in four workers left their job this year, making employee satisfaction and retention an increasing priority for retailers. Automation helps to reduce mundane activities and allow for increased employee interaction and challenge.


Challenges of Automation in Retail


Despite the importance of and indeed, the unavoidability of digitalization and automation, there are several potential challenges that exist. These include:


Complexity of retail operations


Retail operations are often complex, involving a wide range of tasks such as inventory management, vendor management, customer service, and sales. Invoices needs to be paid on time and recorded, hourly employees trained and tracked, and forecasting done as accurately as possible in order to stay within the set budget. Now imagine trying to track all of this for multiple locations! Automating all of these tasks requires sophisticated technology that is capable of handling the complexity of these operations such as that of an Enterprise Resource Planning (ERP) system or a dedicated Accounts Payable (AP) automation software provider.


Varied needs


Retail customers, suppliers, and vendors all have different needs, and these needs can be difficult to anticipate. Retailers need to strike a balance between providing a personalized experience while still leveraging automation to improve efficiency. One example of addressing this is to communicate the benefits of the automation, including how it can help and not hinder the journey.


Rapidly evolving technology


Technology is a constantly evolving animal, and keeping up with the latest innovations can be a challenge for retailers. This is especially true when it comes to on-site technology (such as self-checkout) versus partnering with a cloud-based provider for operations (such as Accounts Payable automation). In the latter case, the partner will ensure that the retailer is kept current.


High cost


Depending on the technology, implementing automation in retail can be expensive and require significant investment in technology, infrastructure, and even personnel. This is especially true for small retail businesses which operate on an especially tight margin. Fortunately, cloud-based Software-as-a-Service (SaaS) options are bypassing this challenge and enabling businesses of all sizes a way to stay competitive.


Resistance to change


An oft forgotten area, older or more traditional employees and customers may resist using technology (and therefore automation), viewing it as a threat to their jobs, an impersonal way of interacting with others, or something that is just plain scary. Retailers need to be aware of the possibility of this resistance and take steps such as providing training and communicating the benefits in order to address concerns.


The Future of Shopping


The use of automation in retail will continue to reshape the shopping experience. Thanks to the integration of advanced technologies such as Artificial Intelligence (AI) and robotics, retailers can streamline their operations, improve vendor relationships, and access real-time data insights to help offer personalized customer experiences. However, as automation continues to grow, it's important to address the various challenges it presents such as the impact on employees.

Automation in retail has immense potential and is unavoidable. The good news? It doesn't have to be done alone.


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