Nordstrom and Panera Leverage AI and Automation to Enhance Operations
Alexis DePree, chief supply chain officer of Nordstrom, and George Hanson, VP/chief digital officer of Panera Bread, sat down on Monday at Shoptalk in Las Vegas to discuss the bright future that retail can anticipate leveraging artificial intelligence (AI) and automation.
Both leaders agreed that the key to optimizing operations comes down to leveraging AI and automation for low-value, repeatable tasks so that employees are freed up to engage with customers at a high-value, ad hoc level. Not only does embracing technology in this way improve the customer experience, but it also empowers the workforce, driving employee satisfaction.
Given Ms. DePree’s focus area, most of the AI and automation-based wins she shared were related to logistics. Nordstrom has been leaning into AI and automation to design unique routing depending on the order, improve rates of return, and maximize storage space.
“The supply chain used to be set it and forget it. Now it differs with each order,” said Ms. DePree.
She explained that there is now more complexity in the supply chain and automation has allowed for its movement from a cost center to a value driver. Additionally, since storage density has significantly increased, warehouses are much more economical thanks to the retailer’s advanced technology.
Panera’s use of AI and automation enables more personalized digital and dining experiences. Mr. Hanson specifically highlighted the brand’s reliance on AI-powered voice recognition in the drive-thru. He also pointed to the use of AI to accommodate customers whose orders require repair by proactively offering a range of options.
Further, he mentioned how crucial technology is in alleviating “microfrictions” when ordering in the cafe. Panera has recalibrated its use of AI and automation in online ordering, drive-thru and in-cafe operations. Mr. Hanson emphasized that properly allocating resources across experiences has ensured that winning, AI-based app features are brought to life in the cafe.
DISCUSSION QUESTIONS: Where do you see the most significant gains being made in retailing logistics using AI and automation? Will AI and automation profoundly impact the customer experience in quick-serve restaurant drive-thru and on-premise operations?
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5 Comments on "Nordstrom and Panera Leverage AI and Automation to Enhance Operations"
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Managing Director, GlobalData
AI will first be used to replace simple, repeatable tasks that are very labor intensive. The technology has shown good capability in this area and is already being used in a number of situations. Gradually it will move into more complex and nuanced areas. That said, I don’t think AI will replace everything in retail. Part of the attraction of shopping, especially in physical locations, is human interaction and not everyone wants to be served by a robot. And there is still room for human creativity and thinking that AI is not (at least yet) able to replicate.
Founding Partner, Merchandising Metrics
I have a whole different reaction to AI and automation when they are presented as empowering the workforce rather than replacing it. Of course AI and automation will replace people in some situations. Efficiency and cost reduction have been goals of business ever since the first apple cart was set up. AI and automation are going to be a triple win in the long run. Businesses, employees and customers are all going to benefit.
Merchant Director
I think AI and automation will be used to replace basic repetitive tasks thus helping with the lack of labor at a lot of retailers, but there will need to be a major investment in the technology (all feet in) in order to see the payoff. I believe I saw a robot this week unloading crates from the a stack of several rows of delivery crates.
President and CEO, Vector Textiles
Anything that is recurring and routinized will be moved to AI. QSR chains will be early movers to insert AI because “the human factor” does not add to the customer experience, at least not much.
entrepreneur
wheel, electricity, artificial intelligence.
each technological know-how requires its own limitations of application. Rules of Use.
For wheels = roads with crosswalks.
For electricity, insulation of wires, fuses, switches.
Perhaps in parallel it is already worth thinking about the rules for using artificial intelligence. For example, at some point not to get a completely paralyzed logistics, or a disappeared customer database.