Living in our culture, you’ve probably noticed how most people try to avoid social interactions with people they don’t know. These interactions can be inconvenient, and some people will avoid them at all costs, as if having a two-minute conversation with a person they don’t know is their idea of torture.
Millennials have been ingrained with an independent sense of self. Perhaps they grew up feeling like it was normal to sit in a room and play video games or watch TV alone rather than go outside and interact with other people. Or maybe it’s because they feel like the only way to get things done correctly is doing it themselves.
Regardless of the reasons, millennials have an obvious dislike towards interacting with people.
Automation Technology Takes Over
This cultural shift is bad news for employees working in the fast-food industry. It’s giving businesses more incentive to install automation technology. In the eyes of a business, it seems pointless to pay an employee’s wage if customers would rather interact with machines. The last thing a business wants to see is an employee not working.
Another benefit this technology will have for businesses is the improvements they’ll see in customer service and order accuracy — another threat to employees and their jobs.
McDonald’s and Panera Bread have already started investing in automation by implementing digital tablets at restaurants nationwide. McDonald’s has even started to invest in self-service kiosks in its restaurants.
Automation technology is the most logical step for businesses. They can purchase the technology at a one-time cost, and they may have to pay some additional costs to keep the technology up to date and running smoothly, but those costs won’t come close to the amount they’ll save by not having to pay employees who won’t be as accurate or dependable.
Andy Puzder, the CEO of Hardee’s and Carl’s Jr., said this:
Millennials like not seeing people… I’ve been inside restaurants where we’ve installed ordering kiosks… and I’ve actually seen young people waiting in line to use the kiosk where there’s a person standing behind the counter, waiting on nobody.
Puzder has even expressed a desire to open a fully automated restaurant that would require no human employees to determine how successful that would be.
However, I’m not entirely sure a restaurant with no human employees would be 100% successful. I think businesses would still need human employees to make sure there were no malfunctions with the technology.
Stores Are Also Making the Shift to Automation
The fast-food industry isn’t the only one shifting towards automation technology. Retail and grocery stores across the country have been investing in self-checkouts for the last decade or so, but they’ve become more prevalent in the past few years.
One of the biggest one-stop shops, Target, has begun investing in and installing self-checkout registers nationwide. The company launched its self-checkout project in 2014. Kelly Hanson, a senior group manager on the Target Technology Services team, said:
Guests tell us they really want the option to self-checkout in our stores, so it was important to find a way to make it happen.
There’s an obvious customer demand for automation technology in stores, especially in stores where customers might be buying only a few items and don’t want to stand in line behind someone who has a whole cartful.
These customers would rather do the work themselves and ring up their own items. Not to mention, they won’t be bombarded by a cashier trying to sell them a credit card service, which always happens to me when I’m at Target.
People want to get the things they need and get out of the store as quickly as possible. I only go to grocery stores that have self-checkouts because I’m usually only picking up a few items, and I know I can scan and bag my groceries in a timely manner.
Retail Automation Market Outlook
MarketsandMarkets, a market research firm, reports that the retail automation market will be worth $275.3 billion by 2020, at a CAGR of 16.7% between 2014 and 2020.
NCR Corporation (NYSE: NCR), which provides retail stores with self-service applications, checkout hardware, and self-serve kiosks, would be one of the best ways to start investing in this emerging market. As more stores and fast-food restaurants make the shift towards self-checkouts and kiosks, the demand will increase, and companies like NCR Corporation will need to meet those demands.
Whether it is the exclusive nature of the millennial generation or businesses realizing they can cut down on costs while still providing a product to their customers, automation technology is just beginning to take hold of the retail market.
Until next time,
Jennifer Clark
Pro Trader Today