Friday, September 22, 2017 | Today's Vending Industry News
Robots And AI: The Next Great Challenge For The Vending Industry

by Marc Rosset
Posted On: 2/1/2017

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TAGS: vending industry trends, office refreshment, coffee services, micro markets, Marc Rosset, Professional Vending Consultants, robotics, Robotics Age, artificial intelligence, automation, employment market, Ethical Problems of Robotics

Shadow Hand Bulb, robot, vending Our industry has experienced numerous changes since my company, Professional Vending Consultants, began advising on the purchase and sale of vending, office coffee and food services operations in 1993. Longtime industry members are keenly aware of most of them. These changes include the virtual outlawing of cigarette machines in the late 1990s, the introduction of 20-fl.oz. bottle venders, the rise (then fall) of commercial videogames and the introduction of DEX and handhelds, along with networked equipment and mobile payments, the emergence of micromarkets, and perhaps loss of hundreds of millions in revenue in the school sector as a result of obesity concerns. Let's not forget the millions of American jobs lost since the early '90s due to downsizing and offshore manufacturing.

Some changes have been good for our industry, others devastating. In this article, I want to discuss a situation that will not only affect the broader world, but most certainly is going to have a lasting impact on your vending, micromarket and OCS businesses: robotics and artificial intelligence. I've been doing extensive research in the area of robotics and AI. I'm amazed by its wonderful potential, but vexed by the extreme cause of concern generated by the very people who are the pioneers of the burgeoning Robotic Age.

Photo by Richard Greenhill and Hugo Elias of the Shadow Robot Co.

What was so unsettling in my investigation is that many of the scientists, physicists, research foundations and commercial hi-tech heavyweights behind the robotics revolution have gone on the record saying that they are afraid of the potential effects of new world order they are ushering in. They include officials from such tech giants as Amazon, GE, Google, Uber, Apple, Facebook, Ali Baba and IBM, and celebrated inventors like Tesla's Elon Musk and theoretical physicist Stephen Hawking, as well as Chinese and European research institutions that are developing robotics and AI.

In a survey of these leaders during a 2015 symposium in Vienna addressing the "ethical problems of robotics," 50% of the expert participants concurred that U.S. workers currently making less than $20 an hour will likely be unemployed within seven years. You might think that new technologies usually spur the foundation of new industries, therefore creating new jobs. In answer to that, the top of the class in robotics and AI said the technological advances in their field are occurring so rapidly that new jobs, training and career opportunities cannot be created fast enough.

Even if the job loss estimate were off by half, there would still be a loss of hundreds of millions of jobs worldwide. Putting global warming, terrorism, disease, famine, and the political suggestion of nationalism over globalization aside, robotics and AI will change the way we live. Wars will be fought with drones, air power and robots. Drivers of trucks and taxis, especially those in the Uber network, and hospitality and foodservice workers (servers and cooks specifically) will be replaced. People working on Wall Street and in business, finance and actuarial professions, and in call centers, retail, banks and education will eventually be displaced by robots. Let's look at two examples, among hundreds, of how technology is impacting the human workforce. They involve two leading retailers.

Last year, Lowes Cos. Inc. said it was introducing personal robot greeters that would take customers to find what they're looking for, and stay with them all the way to checkout. The home improvement retailer also introduced robotic inventory workers. Lowes claimed that not one human would lose his or her job from these changes. In mid-January, Lowes announced the layoff of 2,400 U.S. workers, and more dismissals are expected.

In December, Amazon announced Amazon Go, an ultramodern grocery store without any cashiers, baggers and checkout lines. The first test store, only for Amazon employees, opened in Seattle. It uses high-tech sensors and artificial intelligence to allow shoppers to swipe an app when they enter the store, then walk the aisles and grab staples like milk, eggs, bread and cheeses, and readymade meals, gourmet desserts and anything else one might find at their local grocery. Items picked off the shelves are added to the shopper's virtual cart app (and subtracted if they're put back). Receipts are emailed. The company plans to open its 1,800-sq.ft. experimental store to the public this year, and wants to open 2,000 more in the longer-term. By comparison, the nation's largest full-service grocery retailer, Kroger Co., operates about 2,800 stores and has almost 431,000 employees. With no cashiers and no checkers, Amazon Go and other multifunctional stores are examples of how AI will put a lot of people out of work.

Last year, upon returning by plane from South By Southwest, the conglomerate of film, interactive media, music and technology conferences and festivals held annually in Austin, TX, I noticed how smooth a landing our jet experienced in Chicago. I said to the flight attendant that this pilot must be the very best. She told me that it was not the pilot, and that computers more often land planes in calm conditions; she added that computer landings are generally considered "safer."

Even professional services provided by surgeons, primary doctors, anesthesiologists and pharmacists are at risk. Many types of surgeries are already performed by mechanisms with advanced AI capabilities. In a recent nationwide survey, nurses said they feel "more comfortable" when the decisions about the care of their patients come from AI-backed systems than from doctors.

IBM's Watson, an advanced computer system capable of answering questions posed in natural language, has already won numerous times on Jeopardy and beat some of the world's best chefs in cooking contests. Watson is now being enhanced to forecast the weather, analyze retail and travel trends, and prescribe medical treatments, among hundreds of other applications. The world's largest hedge fund, Westport, CT-based Bridgewater Associates LP, is attempting to replace its management personnel with AI.

We already know that computers greet the majority of business callers and manage heavy industrial production tasks, especially in the automobile-manufacturing sector. Many industries would not be as efficient without them. Is all this being done to give humans more free time, or to eliminate jobs that necessitate workers compensation, heathcare and financial assistance for the lower and middle classes?

The Effect On Our Service Industry

Some of you already have told how these advancements are changing the way you operate your vending businesses. And many of you have had some experience with declining client workforces and customers in the manufacturing, business, institutional and education locations you serve.

Although you can't control the types of businesses or jobs that will be lost from innovation, you can modernize your own company to use as much IT, AI and robotics as possible. Will a robot be able to drive to an account and fill your machines? Possibly. But the real concern should be how many customers will be left to buy products from your vending machines, or use your coffee service -- and whether you can imagine how your company can profit in this changing economy. The decisions on how to cope with this reality have to be yours. I can only make observations about the pitfalls I see, and implore you to envision the future. Ask yourself, "What changes do I need to incorporate to remain viable?"

Our new President's main economic platform is to create jobs, rebuild the nation's infrastructure, and explore ways to improve wealth and independence by creating more jobs in the resurging fossil fuels sector. Well and good. But how many vending machines will you deploy underground in a coalmine or on the side of a highway undergoing repairs?

As always, it's the ones who do their homework that will survive. It will be challenging to find the right customers that won't be affected by robotics in the future. In my opinion, you may only have a few more years to figure that out. I'm still working on some ideas that may help but will not save everyone. I would appreciate hearing from you, whether you agree or not with ideas expressed in this article. I can be reached at pvcinc1@aol.com.

Sources:
Science and Symposium Conference, Rome, 2015
Ethical Problems of Robotics Seminar, Vienna, 2015
Robotics Tomorrow, trade magazine
IEEE Innovation Conference on Industrial Technology
Google search on "Algorithmic and Mathematical Foundation of Robotics"
Additional Google searches: Elon Musk, Mark Zuckerberg, Bill Gates, Stephen Hawking, Steve Jobs, Russell and Norvig (2003), Dartmouth College AI workshop (1959), and Martin Ford, automation, dangers of AI in our future, accelerated technology and the economy of the future


marc rosset MARC ROSSET is founder and president of Professional Vending Consultants Inc., a specialized intermediary for acquisitions of full-line vending and office coffee service companies in the U.S. and Canada. PVC has represented more than 310 transactions with gross sales value of more than $790 million since 1993. Rosset has played a key role in helping to establish industry-recognized guidelines for the value of vending, OCS and foodservice companies. He can be reached at pvcinc1@aol.com or (312) 654-8910.