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The global fashion business journal

23 Sep 201904:56

From charging to managing people: how much time will retail save with digitalization?

Half of the productive activities will be able to do without the human factor, which will generate a saving of costs and, above all, of time for the retail companies.

18 Jun 2019 — 10:00
A. Juárez
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From charging to managing people: how much time will retail save with digitalization?

 

Digitization is advancing steadily in retail. Half of the tasks performed by humans today may be replaced in the future, with a great impact on fashion companies. In addition to a considerable saving in costs, opting for automation supposes a substantial improvement in the time, and therefore, in efficiency. But what tasks can robots do? Where will the companies save more and in which aspects it is not worth it?

 

According to McKinsey's Automation in retail report, the activities in which companies will save more time with automation are the simplest ones. The predictable physical activities, easy to perform by the current staff, will be those that contribute more time on savings, approximately ten hours to US companies in 2020, according to the study. The processing and data collection, with ten hours and eight hours respectively, will also generate a substantial saving of work hours to companies when the positions are automatized.


On the other hand, the McKinsey study also points out the jobs that would be most affected by automation and digitization. In this case, truck drivers, with implications for distribution, would see their jobs automated 86%. Likewise, stores' cashiers will also be affected, since the study points to an impact of 81% on their work. Salespeople, warehouse employees and office staff will also see how their jobs are automated, although to a lesser extent.

 

 


However, automation will not automatically translate into layoffs and drastic staff reductions. According to McKinsey, the best way to address the automation that comes for companies is to train and recycle the employees they already have, instead of replacing them with already trained personnel. Replacing an employee can involve a cost of 20% to 30% of an annual salary, while training internally only results in an impact on 10% of an annual salary, according to the report.
 
In this sense, the consultant's study also emphasizes that choosing to train existing staff will help to apply better the technologies in the company, given that 40% of digital and technological transformations fail due to staff resistance. McKinsey notes that the training will help the acceptance and knowledge of workers regarding the technological application.
 
In the same way, the McKinsey consultancy report stipulates that in 2027 a third of US workers will be freelancers. This is another of the trends that retail will follow in the future, since internal training will not be enough to take on the full technological impact and its corresponding management. External collaboration will be necessary, according to the report, through self-employed workers.
 
The McKinsey study remarks the new realities facing retail in the future. Pressures in the margins and high competitiveness has made automation a requirement, not a choice. In addition, the consultancy points out that the obstacle to automation lies within the companies and, if companies are not currently applying the technologies, they are already at a disadvantage compared to the competition.

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