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Retail in the Era of Robotic Automation March, 2014

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What is Robotics Automation?

• In brief, Robotics or Robotic Automation can be defined as a technological replacement for a human worker in order to execute a complete or a partial process that the human worker would otherwise execute himself / herself • It can be implemented in the form of a mechanical robot or a fast, cheap software that runs as a web service or a toolkit that enterprises can use to quickly and cheaply develop custom robots to automate business processes

Robotics in Action • Automated retail solutions in the form of kiosks in heavy trafficked areas, e.g. Best Buy Express • Automated retail store, e.g. Hointer • Harmonized customer buying experience, e.g. Dixons Retail Group • F&A, sales administration and marketing campaigns, e.g. Shop Direct

Source: Secondary Research, Sutherland Research and Analysis

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Mechanized Robotic Automation Automated Restaurants

• Features a touch screen ordering and payment system, reducing the need for as many cashier employees • Some cafes may even allow mobile and tablet based apps to make the ordering and payment process more efficient

Self checkout

• Provides a mechanism for customers to pay for purchases from a retailer without direct input to the process by the retailer's staff

• Total no. of Selfcheckout devices are expected to reach 430,000 units by 2014

Vending Machines

Inventory and Movement

• Comes in the form of a machine which dispenses items such as snacks, beverages, alcohol, cigarettes, lottery tickets, cologne, and other consumer products automatically, after the customer inserts currency or credit into the machine

• Brings forth a possibility where robot generates a detailed aisle/ shelf-level interactive store map that can be displayed on an instore digital sign for customers to browse the virtual world of the store using gestures or a touch-screen interface

Source: Secondary Research, Sutherland Research and Analysis

© 2014 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.

www.sutherlandglobal.com March 25, 2014

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Process Robotic Automation Customer Support

Payroll Processing

• Usually takes form of a chat assistant that helps shoppers with their buying and support questions, making the shopping experience more pleasant and convenient • Many times results in reducing customer service costs across target markets

• Helps with elimination of manual verification steps in payroll and financial reconciliation processes, eliminates error free transactions such as overtime payments, commission, bonus and salary adjustments etc.

F&A

• Also helps with routine recording and reconciliation of financial transactions

Marketing Automation

• Automates webbased campaign management process, thereby reducing the time and effort invested • Monitors marketing campaigns constantly , identifies and focuses on the most profitable marketing avenues

Source: Secondary Research, Sutherland Research and Analysis

© 2014 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.

www.sutherlandglobal.com March 25, 2014

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Some live Industry Examples in Mechanized Automation

Company

Automation Area

Functionality and Benefits

Automated Distribution Centre

• Two central national distribution centers containing warehouse management system to provide quick storage and retrieval movements • Improvements include: – deliveries according to the needs of individual stores – improved response options at peak times – high availability of articles

Warehouse Management

• In March 2012, Amazon.com acquired Kiva Systems to help run their warehouses more efficiently • The self-propelled robots from Kiva moves around warehouses to retrieve and carry entire shelf-units of packages to their shipping point

Automated Kiosks

• Best Buy provides Best Buy Express kiosks for automated shopping experience • Best Buy Express offers an assortment of hot items, including no-contract mobile phones, chargers, MP3 players, headphones, tablets, digital cameras and more, all offered with the Best Buy Low Price Guarantee

Automated Retail Store

• Hointer uses a combination of robotics, mobile apps and self-checkout, eliminating the need for human staff in the store • Shopper’s can download Hointer’s app on the their android or iPhone, the shopper can try on clothes and place them in a virtual shopping cart • The clothes in customer’s shopping cart arrive in the dressing room within 30 seconds. A specific dressing room number on the app directs the shopper to his/her clothes and the clothes that don’t fit are simultaneously removed from the shoppers’ virtual shopping cart • Self-checkout option also eliminates the need for cashiers

Source: Secondary Research, Sutherland Research and Analysis

© 2014 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.

www.sutherlandglobal.com March 25, 2014

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Some live Industry Examples in Process Automation

Company

Automation Area

Functionality and Benefits

Automated Back-office

• Managing the administration of payment terms with customers following purchase including ‘buy now pay later’ terms • Managing the administration of the sale of insurance products • Supporting marketing campaigns at point of sale in a fast and responsive manner • The administration behind ensuring that the organization is fulfilling its obligations to the FSA

Automated Invoicing

• Match its merchandise with purchase orders • Cross-reference highly detailed product information with price and other relevant internal data

Automated Marketing

• Intelligent prospecting, social media marketing and campaign management solutions for web-based marketing • Track every aspect of prospect behavior – 360° prospect view • Adjusting marketing campaigns automatically to suit prospect behavior, thus yielding best results

Source: Secondary Research, Sutherland Research and Analysis

© 2014 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.

www.sutherlandglobal.com March 25, 2014

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Some live Industry Examples in IT and Social Media based Automation that may Delight or Drain customers!

Product Identification

• Dresscovery is a mobile app that can identify products, for example a handbag, from a photo taken with a smartphone • The mobile app helps in identifying the most similar product that is currently on sale

Location Assistance

• The Proximus mobile app can help locate consumers visiting a shopping mall in order to provide them with a better service • Proximus has the ability to analyse the movements and behaviour of the customers in order to ascertain what it is they are interested in and so meet their needs more effectively

Source: Secondary Research, Sutherland Research and Analysis

© 2014 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.

www.sutherlandglobal.com March 25, 2014

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Conclusion Growing time and cost pressure is creating intense competition in the retail industry, whereby retailers are increasingly turning to automated solutions / robotics in order to remain competitive More and more functions of the retail industry, ranging from warehouse management, logistics to back office processes are being automated

Leading retailers like Amazon, Shop Direct, Dixons Retail Group and Coles are making investments to upgrade their processes by the use of automated solutions / robotics

Retailers would continue to adopt automated solutions in order to remain ubiquitous in serving customers

Source: Sutherland Research and Analysis

Š 2014 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.

www.sutherlandglobal.com March 25, 2014

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End of Presentation

Š 2014 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.

www.sutherlandglobal.com March 25, 2014

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