Ripple Effects: Mobile Payments Are Just The Beginning

Technology is taking us to a world where we never have to leave our homes. One where a trip to the grocery store or the bank is a thing of the past (if it isn’t already). One where grocery stores, restaurants and eCommerce can deliver anything and everything to your home almost instantly by drone, payments are automatic, doctors do house calls, people communicate by FaceTime and most of the labor force works remotely.

But are the ripple effects of this exponentially expanding digital and virtual ecosystem causing neglect of our real, local communities, a dwindling of human interactions and a future workforce that will lack social skills?

A recent article by The Wall Street Journal showed fully autonomous robots picking and stacking goods in a Target distribution center in California. Rather than build a new warehouse or rely on tried-and-tested technologies for picking products off shelves, Target decided to try a “new breed of robots.”

These robots are the creation of Symbotic LLC, which is owned by billionaire Rick Cohen. Cohen owns a national distribution network and deals with some of the nation’s biggest retailers. His aim is to change the way that the thousands of cases of retail goods are stored, handled and hauled.

It is unsettling to watch the warehouse robots expertly navigate their environment and systematically perform their picking and stacking with unfailing precision. The picture is so different to the traditional warehouse setting, where workers buzz about on forklifts stacking and picking and conforming to safety regulations and just-in-time processes. The picture is no less odd than a driverless car.

“What we’re doing with autonomous bots is not that dissimilar from what Google is doing with autonomous cars,” Cohen said in an interview at Symbotic’s Wilmington, Massachusetts headquarters. “I think, within five years, it’ll change distribution.”

That the technology will change distribution is certain. Retailers have already changed their logistics models to one where strategically- placed distribution centers serve surrounding retail locations. The ripple effects of this new model are less activity at ports, lower revenues for the trucking industry and a prediction by the National Retail Federation that this trend of low imports will persist.

But retailers like the idea of controlling the three major costs of conventional human-staffed distribution centers — labor, time and real estate. Frank Bruni, vice president of supply chain operations at Kroger, for example, said: “Every project we look at, we look at automation as a potential part of it.”

Currently, around 6 percent of Kroger’s distribution centers are fully automated, and according to Bruni, increasing wages and a shortage of warehouse workers will drive the company to look at more robotic systems. “Twenty-five, 30 years ago, there were a lot of folks who made careers working in warehouses. Today, I don’t think that dynamic exists as much.”

But it’s not just the retailers trying to cut costs who are embracing technology. Consumers are also demanding efficient new systems and processes. Research shows that consumers want more personalization and convenience.

According to CMO and the 2015 Adobe Mobile Consumer Report, the “mobile elite” — those who want to lead a mobile-first lifestyle, such as millennials and Gen Xers — want to conduct their banking and finances on mobile, book travel on mobile and engage in eCommerce on mobile sites.

As for home deliveries by drone, according to Statista, the vast majority of grocery shopping still takes place in traditional brick-and-mortar stores, but this is changing. In 2016, 5 percent of U.S. consumers preferred shopping for groceries online and having them delivered to their homes. U.S. online grocery sales amounted to about $7 billion in 2015 and are expected to rise to $18 billion by 2020.

Health services are another example where technology is providing remote or at-home convenience. Heal is an app that allows patients in Southern California to contact a doctor on-demand for a home visit. It is, according to NBC, expected to roll out in 15 other major cities. Pager in New York is another on-demand health services app, and Go2Nurse is based in Chicago and Milwaukee.

So, with smart devices to research, select and pay for products, robots to pick and stack, drones to deliver and doctors to provide on-demand, in-home appointments, is there anything that we really do need to leave the house for?

Jobs, perhaps? Well, probably not. GlobalWorkplaceAnalystics.com reported that the number of non-self-employed people working from home has grown by 103 percent since 2005. Even on-site facilities managers are becoming obsolete thanks to the IoT. Johnson Controls is a firm that provides remote monitoring services. Johnson Controls’ website reads:

“Today’s complex facilities need experienced operators watching over the building, identifying issues and correcting problems, before they impact occupants or operations. But who can afford to train and staff such a team? … In addition to remote monitoring solutions for your facility’s systems, our trained building operators can take control and remotely operate your facility, minimizing your staffing requirements and providing the benefits of best practices and standard operating procedures.”

But, so what? What’s so bad about domestic and social isolation? The research is mixed on this. Seniors, for example, can benefit from the IoT’s technology, perhaps realizing greater independence from services that allow them to age in greater comfort at home. Modern technology, such as the internet and smartphones, can facilitate their communication with friends and family.

But for younger generations, research by Elon University found “evidence that the rapid expansion of technology is negatively affecting face-to-face communication.” A study by the University of California Los Angeles found that excessive smartphone use can affect younger generations’ ability to read emotions and to develop meaningful relationships. Will the workforce of tomorrow be less able to communicate with employers and peers and, therefore, less able to succeed?

Whatever the consensus, the trajectory of technology cannot be reversed, and the ripple effects of autonomous robots, drones, the IoT and consumer demand for convenience will be evident only when we are already firmly entrenched in a new society. According to the Elon study:

“With technology advancing at the speed of light and human interaction changing just as quickly, it may be impossible to predict the results. However, everyone should be aware that human interaction as was once known may have already changed forever.”