One of the most promising implementations of retail automation has come to a screeching halt. Last week, news broke that mega-retailer Walmart was ending a lucrative contract with robotics firm Bossa Nova, which makes a shelf-scanning robot meant to streamline brick-and-mortar inventory management and bring new efficiencies to physical retailers in the age of ecommerce.
That narrative has now been disrupted in very public fashion, leaving the sector grappling.
Bossa Nova's robots had been deployed in about 500 Walmart locations, with plans underway, after a successful pilot, for rollout to 1000 locations. That contract is now void, and the results have been predictably devastating for Bossa Nova, which has now reportedly laid off about half of its pre-cancellation workforce.
So what happened? Explanations from Walmart and Bossa Nova have been confined to vanilla statements.
"I cannot comment on Walmart," Bossa Nova co-founder Sarjoun Skaff told The Verge in a prepared statement, "however, the pandemic has forced us to streamline our operations and focus on our core technologies. We have made stunning advances in AI and robotics. Our retail AI is the industry's best and works as well on robots as with fixed cameras, and our hardware, autonomy and operations excelled in more than 500 of the world's most challenging stores. With the board's full support, we continue deploying this technology with our partners in retail and in other fields."
What likely happened, as examined by the Wall Street Journal and others, is that the pandemic radically shifted priorities for Walmart, which no longer saw the value of autonomous shelf-scanning solutions while spikes in online ordering have left human employees with more free time. Through this lens, Walmart's decision is more circumstantial than it is an indictment of the technology or company behind it.
Nevertheless, the industry was left reeling as the nation's largest brick-and-mortar retailer reversed course on one of the clearest signals that automation was coming to brick-and-mortar retail a lot sooner than expected. Bossa Nova competitors, including Simbe Robotics, which makes a competing shelf-scanning unit, have been quick to do damage control and distance their technology from Bossa Nova's lest they be caught in the fallout.
"Bossa Nova's failure is not an indication of a lack of opportunity or necessity for retail robotics in the market," Simbe CEO Brad Bogolea told me in an emailed statement. "Robotics solutions provide real-time shelf insights to assist store teams across three critical business insight areas: Out on Shelf, Pricing/Promo, and Product Location. Combined, these data points represent about $1T/year loss for retailers. This gap simply cannot be efficiently solved by human workers because it requires counting tens of thousands of items per store, multiple times per day; it's not feasible from an operations standpoint. This real-time information is critical to retailers' business and ultimately, their bottom line."
A Simbe spokesman pointed out to me that with the company's robot robot Tally, stores have seen a 20% reduction in out-of-stocks and a 2.2% uptick in annual sales, and partners like Schnuck Markets are moving to expand their use of this tech quickly. It's important to understand, too, that shelf scanning robots are capable of doing a lot more than checking for out-of-stock items.
"Accurate real-time shelf insights encompass more than just out of stocks," explains Bogolea, "equally as important from an ROI perspective are accurate pricing and promotion execution (i.e. quickly correcting mispriced products) and product location information. Retail robotics solutions like Tally fill this gap incredibly efficiently and effectively and help recoup a massive hole in revenue by arming retailers with the data needed to optimize products on shelf."
In the end, Walmart's divorce from Bossa Nova may say more about a specific company grappling with a specific moment in history than it does about the future of robotics in retail.
Says Bogolea: "The future of retail robotics is exciting, and it's just getting started."