Lowe’s and Its Orchard Are Becoming Robotic
Exactly two decades ago Orchard Hardware Supply (commonly known as OSH) was on top of the hardware retailing world. The company’s 40,000 sq. ft. prototype was thought to be a big box innovator for the typically old-fashioned, neighborhood hardware store, as just a few years earlier, Home Depot established the home center warehouse model to pretty much eclipse the post-World War II innovation- the home improvement center.
At this time Orchard had gained local, as well as, significant national notoriety by filling its voluminous stores with a rarely seen depth and breadth of product, including several of which were offered more as a service to local communities and not typically seen in hardware stores.
During a drought, Orchard management brought in much appreciated quantities of bottled water. When the water shortage abated, OSH naturally decided to end its water run, only to discover that many in the community continued to demand water in appreciation of Orchard’s earlier efforts.
On surveying its clientele, OSH discovered that many loyal customers then felt an even stronger bond with the retailer as they recalled what they considered to be a supreme effort to aid the stricken community by bringing in product not normally associated with hardware. While interviewing company execs at this time, one could hear their exhilaration over this customer glee, even over the phone.
Orchard was then so admired that in 1996 the company was acquired by Sears. Sears had been so enamored with OSH that it anticipated converting its then current crop of Sears Hardware Stores to smaller versions of the Orchard model, with future openings to better copy Orchard’s prototype. That of course never happened.
Shortly after its Orchard acquisition, Sears decided to maintain both its Orchard and Sears hardware entities as was. OSH remained a fairly progressive retailer but seemed stifled by the limits of Sear’s management. In 2013, Sears spun off Orchard Supply Hardware as it has done with several acquisitions in recent years. A few months later, Orchard found itself buried in debt by the terms of the Sears divestiture.
Orchard quickly filed for a chapter 11 reorganization, which led to a bargain priced acquisition by Lowe’s. At the time many industry experts saw this as a hopeful return to Orchard’s glory days. Some saw Orchard as the future of Lowe’s expansion plans as fewer communities remain which can accommodate the Lowe’s big box prototype.
Now it becomes clear that Lowe’s expectations for Orchard’s future continue, unlike Sear’s flagging enthusiasm shortly after its OSH acquisition. Lowe’s has announced that through its new Lowe’s Innovation Labs division, it will embark on a project which will equip test stores with in-store robotic shopping assistants.
The initial entry location will be at an OSH store in Orchard’s hometown of San Jose, CA. Aside from this as an indicator of confidence in the future of its OSH acquisition, it is likely that Lowe’s chose the location because of San Jose’s proximity to the minds of cutting edge technology at Silicon Valley.
There are of course questions as to the viability of robots at this stage of the technological retailing challenge. Currently these robots are expensive and are likely cost prohibitive in terms of a rollout for a large chain. They do however offer several interesting positives.
These robotic ‘assistants’ are programmed to see and speak with shoppers. They can usher customers to the products they seek, even by viewing an item the customer seeks to match or to locate similar wares. The ability to understand and speak multiple languages bodes well for serving customers in our increasingly multi-lingual society.
The robots will be introducing themselves to store visitors by their name ‘OSHbot’. The robots can facilitate live conversations with store associates. Frequent reprogramming allows the robots to navigate customers to their desired location despite store redesigns or store promotions. The OSHbot also offers touchscreens to foster product searches.
One must wonder how many customers will find these programmed associates lacking as they seek do it yourself advice and guidance, typically from a floor-based associate. The store may see a similar lacking as human associates can often upsell or recommend associated products to purchase, in order to complete a project.
Many see these robots as an early step in the future of technology for all retailing. Hardware retailing has often been seen as particularly technologically challenged. Thus, this is a truly amazing step for this market.
Two decades ago, many top industry executives were actively trying to avoid classes in learning how to use their personal computers. That Lowe’s is actively charging a newly created division, Innovation Labs, with pursuing technology to help determine its future, is a powerful sign that this industry is actually leading the way in the ever more competitive field of technical commerce, which will move the future of 21st century retailing.