Robotics in Retail

Robotics and artificial intelligence (AI) are revolutionizing retailing. From manufacturing to ordering to fulfillment to delivery, robots are changing the way retailers do business. Take ecommerce behemoth Amazon, for example. The company acquired robotics maker Kiva Systems in order to enter robotics in a big way (in 2012), and the resulting subsidiary, Amazon Robotics, designs and builds robots that handle most of the firm’s warehouse and fulfillment operations. At any of its million-square-foot distribution centers, you will find Kiva robots that can carry hundreds of pounds at once. These units are “automated guided vehicles” or AGVs, that can find their way quickly around a warehouse by following barcodes on the floor.

When a customer places an order, the robot finds the item in the warehouse and takes it to a human worker who takes the item, scans a barcode and sends it by conveyor belt to a packing station. AI determines the proper box size and another human worker places the item in the box. A robot handles the package sealing and shipment label and off it goes. In the current system, Amazon uses about one minute of human labor to fulfill each order, but that will lessen as robots become better and more capable of human skills such as grasping and placing. According to Deutsche Bank, the Kiva Systems acquisition cut Amazon’s fulfillment costs by 20%.

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