Advanced robotics will transform retail

By October 16, 2013Ecommerce

Advanced robotics offers what is perhaps the most exciting near term investment opportunity that I learnt about at Singularity University last week. Let me illustrate with an example. It is now possible to measure someone for a very high quality custom bike frame, and then have robots cut the steel tubes and then weld them to produce a finished product in under an hour. Even better, it can be done in store in front of the customer. You could ride home with a video of your new bike being made with you in it. Saul Griffith from Otherlab gave us this example. He thinks these steel bike frames are equivalent quality to $12,000 carbon frames and that he can sell them for $6,000 and make a very good profit. One of the great things about this model is that there is only one company taking a margin out of the consumer price, whereas the traditional bike value chain has at least the manufacturer, wholesaler and retailer taking a cut.

What I’ve described here is a retail experience with a whole new level of consumer participation. Being involved in the design and watching the robots at work is a great story and hence a great platform on which to build a brand.

Micro-breweries is an industry where manufacturing on the site of retail has spawned a number of highly successful businesses, not least Brewdog down the road from us here in Camden. As with the bike example micro-breweries use advanced machines and custom software to produce a better product. The robotic arms and associated software are more complicated than micro-brewing equipment and only now reaching the cost and quality threshold where on-site manufacturing becomes feasible. Making the bike frames requires two 3-axis robotic arms which cost $200k, including software.

It’s interesting to think which other products might work with this model. Clothes is an obvious one – customers could be measured on site, choose elements of their design and then wait whilst robot sewing machines made their garment.