Updated: Dec 5, 2019
Walk into the Decathlon sporting goods store on Market Street in San Francisco and you will find yourself face to face with Tally.
She is tall and slender, and has a winning smile—she smiles with her eyes.
She is gentle and considerate: if you get in her way, she will quietly glide around you without complaining.
She is extremely intelligent and highly efficient: as she moves up and down the aisles, she takes a real-time inventory of the products on the shelves and racks, checking which products are running low or out of stock, and whether they are labeled with the correct price. She can read RFID tags, but she can also use AI-powered image recognition to distinguish different products at a glance.
Tally is the child of San Francisco-based Simbe Robotics.
You might underestimate Tally as a relatively unglamorous application of robotics: she has no arms, doesn’t manipulate objects and performs a seemingly menial set of tasks. Think again. The retail industry loses close to one trillion US$ a year because of poor inventory management. About one quarter of Amazon’s revenue is estimated to come from consumers who have first tried to find a product in a physical store and failed.
It should be no surprise then that Simbe Robotics has just announced a $26 million Series A funding round, led by Venrock with participation from Future Shape, Valo Ventures, and Activant Capital. At the same time, Softbank Robotics America and Simbe announced they are expanding their existing collaboration to encompass inventory financing, a move that will help Simbe scale its production to an additional 1,000 robots over the next two years. Nor should it surprise you that Tally was also featured in a recent Wall Street Journal article.
By simply walking up and down the aisles, Tally can give you a full updated picture of what’s in your store, and where exactly it is. She will usually do it three times a day, building a rich time series of data. The robot itself performs an initial pre-processing of the data before sending it to the cloud, where Simbe’s AI performs the bulk of the data processing and quickly delivers insights and prioritized alerts to the store managers.
Now you can see how quickly different products are selling; and if a product remains out of stock for five hours or five days, you know exactly how much revenue you are missing out on. You can test whether a product will sell faster depending on its location in the store, and the efficacy of different promotion strategies. You can quickly find items that have been misplaced.
The insights can inform both fast, tactical reactions as well as more long-term strategic ones; they allow you to see which inefficiencies are directly within the store’s control and which ones instead require adjustments in the supply chain.
The “command center” at Simbe’s headquarters in South San Francisco provides an impressive glimpse of the power of this system. On a computer monitor you can see the live images captured by the robots as they move up and down the aisles, as well as the current alerts and latest analytics—a powerful set of new tools and insights for store managers and retail chain executives. Store employees can access some of the analytics on their handheld devices.
Brad Bogolea, Simbe’s cofounder and CEO, clearly believes that physical retail stores will not be displaced by online retail; but he does believe that the retail sector will undergo a significant change.
“Retail is an industry where not a lot has changed in physical stores since the advent of the barcode—says Bogolea—but there is heightened pressure from the competition of e-commerce and from heightened consumer expectations for instant gratification and better in-store experience. Retailers are being forced to shift to technology-focused and data-driven strategies that touch every piece of the business.”
While Tally’s role might seem unobtrusive, the potential benefits from her insights are substantial. As mentioned above, better inventory management is worth hundreds of billions of dollars to the retail industry. It will also improve the consumer experience: you will be less likely to find that the item you are looking for is out of stock; and Tally’s information can be synced to the store’s app on your smartphone, making it easier to find what you’re looking for—some retailers have already started doing so.
Going forward, Simbe Robotics’ insights could allow it to extend the value of the data across the value chain: improving routing of trucks, or improving the efficiency of grocery delivery services by giving providers such as Instacart just-in-time knowledge of the actual availability of products in specific stores.
Tally and her siblings have already been deployed by several major chains such as Schnuck Markets, Giant Eagle, Decathlon Sporting Goods, Groupe Casino; they operate around the world and have already traveled more than 25,000 miles in-store.
As they keep spreading, Tally and her siblings will bring broader macro benefits by making supply chains more efficient. The current US economic expansion is now the longest on record, and this has triggered knee-jerk fears that a recession might be just around the corner. But one reason the recovery keeps going is smoother and more efficient supply chains that minimize unwanted swings in inventory—exactly the kind of improvement that Tally brings.