Going labor light: designing a tech-forward format

From point-of-sale systems to online ordering, technology has been part of retail and restaurant operations for decades. Now, the increased accessibility, quality and affordability of technology has sparked a revolution in the retail landscape. Retailers and restaurants are adopting the self-service format at a faster rate than ever before, to overcome labor shortages and meet consumer expectations for constant access to products, near-instant gratification and endless choice. In fact, 2023 was a record year for self-checkout implementation, according to RBR Data Services. In a recent study, RBR predicted that 2 million self-checkout terminals will be in use around the world by 2029.

While self-service formats today represent only a small percentage of most brands’ experience portfolios, the next five years could see a radically expanded degree of penetration as labor shortages continue. For some, the investment is producing a healthy return—studies have shown that the average check from a self-service restaurant kiosk is 15% to 30% higher than an order placed at the counter, a recent Stratix eBook notes.

A byproduct of the COVID-19 pandemic, the restaurant and retail labor shortage has had complex repercussions. Some stores and restaurants have been forced to reduce operating hours and even close certain locations because of lack of staff. Others have raised wages, improved working conditions and even offered benefits to attract and retain employees.

Still others have adopted the self-service format, in which consumers use digital tools to make a purchase while employees are available to provide assistance as needed and to support operations.

Touchscreen kiosks, mobile apps, drones and even robots are helping retailers and restaurants augment their operations while offering the right brand experiences at the right time for consumers.

As brands invest more of their capital in the self-service portion of their experience portfolios in the future, it’s critical they understand the unique design considerations of this format. Today’s self-service format should not be a mere adaptation of a brand’s core portfolio design, but an intentional new format design that engages consumers with the brand in a new and unique way.

The technology revolution has roots in the restaurant industry, starting with Zume Pizza’s robotic pizza maker in 2015. In 2016, White Castle tested Miso Robotics’ burger- and fry-flipping robot Flippy and has since decided to introduce Flippy robots to additional locations.

In 2020, when restaurant operations were disrupted nearly overnight by the COVID-19 pandemic, food service technology emerged in force with the widespread adoption of online ordering, QR code-based menus, ghost kitchens and other innovations. Restaurants began seizing the opportunity to leverage automation to solve the pandemic’s lasting effects on labor.

McDonald’s opened its first fully automated restaurant in Fort Worth, Texas, in 2023, with machines handling nearly every task. Customers place their orders using either a kiosk or a mobile app. Big Macs and fries are prepared by computer-directed devices, and pick-up orders are delivered via a conveyor belt. A few workers are on-site only to keep watch over the operations. While only one such location is in operation to date, the automated store is part of McDonald’s “Accelerating the Arches” growth strategy, in which one pillar involves doubling down on digital. 

At Sweetgreen’s “Infinite Kitchen” in Naperville, Illinois, customers place their order on a tablet connected to a robot placed front and center in the restaurant. The robot shoots greens into a salad bowl, which moves along a conveyor belt as other robots add components. Though a human initially prepares the ingredients and has the final touch, Infinite Kitchen requires half the workers of a traditional location and increases efficiency during peak dayparts. Two 2023 pilots yielded improvements throughout—including order accuracy and labor turnover—along with ticket sales that were 10% higher than those in surrounding markets. Sweetgreen is planning to deploy the Infinite Kitchen technology in approximately 25% of new locations opening in 2024.

The retail industry’s embrace of robotics and automation started modestly, with innovation focused on warehouse operations. The front of house saw a shift in 1986 when Kroger piloted CheckRobot Inc.’s first self-checkout station in a store near Atlanta, Georgia. Thirty years later, Amazon debuted its first cashier-less store, Amazon Go, in which a combination of a digital entry pass, cameras and sensor fusion enabled consumers to pick up the products they needed and simply leave without any checkout process at all.

Today, automation can be seen seeping into retail from specialty to mass, enhancing the effectiveness of lean labor teams. Target is implementing generative AI at the store level with Store Companion, a chatbot accessible via a mobile app. Associates will be able to receive immediate AI-generated responses to prompts or questions, such as, “How do I sign up a guest for a Target Circle Card?” Designed to continually evolve to make team members’ jobs easier and enhance the shopping experience, Store Companion has been rolled out to hundreds of thousands of team members across all of Target’s nearly 2,000 stores as of August 2024.

BJ’s Wholesale Club entered a partnership with Simbe to roll out a cutting-edge business intelligence robot, Tally, to 100% of its 244 clubs. Tally autonomously roams store aisles multiple times per day, collecting real-time shelf data to enable faster restocking and re-pricing and freeing up associates to focus their time and effort on customer service. Although Simbe has partnered with more than a dozen global grocers and retailers, BJ’s is Simbe’s first foray into the club environment, where manual stock and price checks are challenging because of the unique club footprint, rapidly changing inventory, high racks and a constant flow of pallets.

Walmart, in turn, is aiming high. In early-2024, Walmart expanded its limited, Dallas-area drone delivery pilot program to cover 75% of the Dallas-Fort Worth population and 30 towns’ worth of households, thus creating the United States’ largest retail delivery footprint. Deliveries are powered by on-demand, FAA-approved Wing and Zipline drones that are seven times as fast as regular delivery options, delivering to customers’ homes in 30 minutes or less—and with zero emissions.

This groundbreaking move represents Walmart’s ongoing commitment to innovation and revolutionizing the way customers shop and receive their orders. Since Walmart operates nearly 4,700 stores located within 10 miles of 90% of the U.S. population, mass scale is imminent. Already, Walmart has partnered not only with Wing and Zipline, but also with DroneUp and Flytrex, to establish drone-delivery hubs in six additional U.S. states beyond Texas.
 

As the world continues to grapple with a tight labor market, brands will be incentivized to invest in automation, robotics and artificial intelligence (AI) at scale. Quantum computing will revolutionize customer and business data analysis. AI embedded into mobile apps will give every consumer and employee a simple, text-to-action approach to shopping and working, and robotics will take over tasks deemed either too mundane or too dangerous for humans—a trifecta of enhanced efficiency.

Imagine hyper-personalized stores that dynamically adapt to individual customers, offering tailored product displays with relevant messaging and digital closets. Or, picture AI-powered virtual / robot assistants who can suggest and retrieve products according to a consumer’s preferences and past purchase history. Imagine autonomous returns as a companion to autonomous delivery, by which consumers can schedule drones to pick up their unwanted items.

Source: JLL Design Solutions

Of course, this doesn’t mean replacing all employees with technology—brick-and-mortar stores must retain the human element that differentiates the physical location from online. Even the most sophisticated technologies cannot fully replace employees without compromising the retail or restaurant experience. JLL research shows that 75% of consumers feel interaction with a human is still critical in the food and beverage industry.

Ideally, technology will augment human labor and reinforce the emotional bonds created from customer-to-employee interactions. Back-of-house and front-of-house dynamics will be carefully constructed to ensure that the experience does not become too cold, impersonal or unfriendly as technology is integrated. Designed strategically, the self-service format is a powerful tool that can help ensure that a retail or restaurant experience portfolio stays relevant. Which part of your customer or employee journey will you automate next?

Learn more about JLL’s Design Solutions, including multi-unit architecture, store design and brand activation.