Bots Go Big in Brick-and-Mortar Retail — and Even Banking

Bots Go Big in Brick-and-Mortar Retail — and Even Banking

Bots Go Big in Brick-and-Mortar Retail — and Even Banking

Charles Keenan

Charles Keenan

Charles Keenan has written about payments since joining the American Banker as a staff reporter in 1997, a time when automated teller machines were appearing just about everywhere but people's living rooms thanks to the relaxation of surcharging rules.

More Info

BBox, a coffee cafe in Berkeley, Calif., serves up a cup of joe for $1.75, featuring a tasty, locally roasted brew. It comes at a good price, about 50 cents less than the average small cup of java at Starbucks. But what really stands out is how the coffee is delivered — via two robots, whirling around, gripping cups, pouring drinks and moving selections to a service window.

The robots at BBox, created by Nourish Technology, Inc., are situated behind a large glass façade inside a building near the University of California Berkeley campus. The mobile cafe went through its first big test this year, starting in January. It also serves nitro cold brews, lattes, tea, orange juice and pastries. Customers order and pay via BBox's app or website and pick up their items from a nearby window. As Nourish works out the kinks, it has set its sights on expansion.

"Ultimately, we believe we can put a BBox anywhere you can put a Starbucks, and a lot of places where you can't," says Greg Becker, co-founder and chief executive officer of Nourish. 

Bots beyond the basics

BBox represents another application of how robotics, once thought to be mainly confined to manufacturing plants and created in the image of fictitious characters like the Terminator and WALL-E, are quickly moving into our everyday lives, with retail becoming a big application. Backed by investors and armies of software developers, startups are looking to robots to build efficiencies and disrupt entire industries.

That said, retailers are going robotic, too. Walmart announced in April it would unleash an army of robots to clean floors and monitor shelf inventory. Pharmacy chains are looking to use robots to automate pill dispensing, and auto-repair shops are experimenting with robots to do tire changes. Even in banking, HSBC has introduced its robot, "Pepper," in some branches, where the humanoid asks simple questions and relays the information to staff. 

Within retail, quick-service restaurants are especially ripe for robotic disruption, where there are so many repetitive tasks in a relatively confined space near the point of sale. Couple that with the falling costs of robots themselves, as well as rising labor costs with many states and municipalities raising the minimum wage.

"Part of our ethos is, let's take some of the margin we are saving using this technology and use it to invest in the local food ecosystem" - Greg Becker, Nourish

Robot sales in the United States set a new record in 2018 of almost 38,000 units, up 14% from a year earlier, according to the International Federation of Robotics, an industry trade group. The automotive sector is the biggest user of robots, with sales up 9%, and installations accounting for 38% of the market in the United States. But new applications are taking hold. In the food and beverage industry, installations rose 64%. Plastic and chemical product companies had growth of more than 30%. 

In the niche retail market of coffee, the race is on. Cafe X, another Bay Area startup, has opened three locations, also selling coffee, tea and pastries. It is planning a fourth at San Francisco International Airport in the fall. Its robots show occasional liveliness too, waving and dancing to customers outside the booth while drinks are being made and delivered, inviting people to engage in the process. 

"Our mission is to deploy a dense network of robotic coffee bars around the world with great design and an intuitive user experience," says Henry Hu, chief executive officer of Cafe X. "We want to expand everywhere there is demand for specialty coffee."

Robotonomics 

Robots aren't as expensive as people think, says Ben Sagan, a business development manager at Mitsubishi, which manufactures a vast array of automation solutions, including arms for Cafe X. It depends on the configuration and tasks the robot performs, but one can be installed for less than $100,000, according to Sagan. (However, for a quick-service restaurant, the cost could reach $250,000.)

Much of the expense involves configuration. That would include programming for every basic task, such as gripping intensity and movement. Developers must also consider the acceleration and deceleration as a robot holds a plastic cup, as well as variation of the rates based on whether the cup is empty or full.

Yet, once the robots are up and running, there's more certainty for retailers, Sagan says. "[They] give you much greater ability to understand what your costs are because robot labor costs don't go up," he says.

Becker says the lower labor costs allow Nourish to source better coffee and pastries. "Part of our ethos is, let’s take some of the margin we are saving using this technology and use it to invest in the local food ecosystem," Becker says.

Typically at these robot cafes, customers use a mobile app for iOS and Android and receive a message when an order is ready. In tandem with the robots, retailers will also benefit by using apps and smartphones to capture more data in order to make better choices for inventory and engage more with their customers. It's all part of the push for more efficiency. 

So while it seems far-fetched to think robots will be prancing around a restaurant waiting on tables anytime soon, it's more believable when one considers the accelerated pace of automation replacing what humans do — whether it's a bank teller or a barista.

"As the cost of these components continues to fall and the performance of them in terms of what the technology is capable of doing increases, you are going to see robotics move its way up the food stack into fine dining," Becker says. 

Caviar on a robot-armed silver platter, anyone? 

The statements and opinions of the writer do not necessarily reflect those of TSYS.

Other Articles by Charles

Charles Keenan

Charles Keenan has written about payments since joining the American Banker as a staff reporter in 1997, a time when automated teller machines were appearing just about everywhere but people’s living rooms thanks to the relaxation of surcharging rules.

His work at the American Banker included writing about credit and debit cards, merchant processing, and bank stocks. He later freelanced for the Banker and industry publications such as Banking Strategies, Bank Director, Community Banker, and U.S. Banker. He also writes about investing, insurance and health care, and is based in Los Angeles.

Share this story via email or social networks

  1. You Know You've Been Part of the Payments Industry Too Long When…

    Tue Oct 30, 2018 09:00 AM

    You Know You've Been Part of the Payments Industry Too Long When...

    Categories: Articles and Blogs
  2. Winning at the point of sale in the convenience sector

    Mon Mar 18, 2019 12:02 AM

    Winning at the point of sale in the convenience sector

    It’s quite possible that there has never been a more pivotal time in the convenience-store industry. With the obvious exception of e-commerce, the convenience-store and club sectors are the only two other retail channels expected to grow over the next three years – and not nearly as briskly as e-commerce.more...

    Categories: Articles and Blogs
  3. Will Globally Popular Regulatory Sandboxes Ever Crack the U.S. Payments Market?

    Tue Jan 29, 2019 08:59 AM

    Will Globally Popular Regulatory Sandboxes Ever Crack the U.S. Payments Market?

    Categories: Articles and Blogs
  4. Why Your Business Needs to Accept Chip Cards

    Wed Mar 6, 2019 12:06 AM

    Why Your Business Needs to Accept Chip Cards

    It feels like forever ago that the EMV® Liability Switch took place on October 1, 2017. But even now, many businesses have not switched over to taking exclusively EMV (colloquially known as chip cards). more...

    Categories: Articles and Blogs
  5. Why the Payments Industry Needs to Hire More Veterans

    Tue Jul 2, 2019 09:00 AM

    Why the Payments Industry Needs to Hire More Veterans

    Tags: purdy
    Categories: Articles and Blogs
  6. Why It Pays to Be a Payment Facilitator

    Mon Jun 3, 2019 01:02 AM

    Why It Pays to Be a Payment Facilitator

    Payment facilitators. You already know of them and what they do, even if you’re not familiar with the term. In fact, PayPal®—which might be described as the original payment facilitator—is sometimes referred to as a kind of “Super Facilitator,” with Square® being a more recent player.   more...

    Categories: Articles and Blogs
  7. Why Isn't Mobile Pay Usage Spreading Faster?

    Fri Apr 13, 2018 05:52 PM

    Why Isn't Mobile Pay Usage Spreading Faster?

    Categories: Articles and Blogs
  8. Why is Fintech So Focused on New Payment Rails?

    Fri Apr 13, 2018 05:36 PM

    Why is Fintech So Focused on New Payment Rails?

    Categories: Articles and Blogs