22 Aug 2014
Logistics has always been the largest stumbling block when it comes to a smooth online shopping experience. No matter how well crafted a website is, and how minimal its shopping cart abandonment rates are, if the supply chain that actually gets the product into the customer's hands is flawed, the customer is going to come away feeling like the process was flawed on the whole. Increasingly, major online retailers like Amazon, and their growing competition from Google in the online shopping world, are removing as many human links from the logistics supply line as possible.
Ever since Amazon pulled a flashy publicity stunt right before Cyber Monday by announcing a long-term plan to employ automated drones as a delivery system, there has been an increased focus on the role of automation in the logistics back end. Robotics, on the whole, generally doesn't have much traction with the average consumer. Consumer robotics are clunky, over-priced and generally not up to scratch when it comes to doing things by hand. However, in a highly controlled and consistently cataloged environment such as a warehouse, seemingly clunky algorithms suddenly blossom into incredibly useful tools for models of efficiency.
Nothing highlights this better than Amazon's recent acquisition of Kiva Systems, a manufacturer of industrial robots designed specifically for warehouse conditions. Amazon previously operated as a customer of Kiva Systems, but decided to simply buy the entire company outright for $775 million USD in cash - their second-largest acquisition in the history of the company (second only to the Zappos.com buyout in 2009, at $847 million USD). Kiva's robots are found in the warehouses of other major retailers as well, such as Staples and Saks, but there's no word as to whether or not they're going to have to go elsewhere for their robotics solutions.
There has long been some trepidation among the general workforce about the idea that robots are replacing humans in manufacturing and logistics positions, but it's a simple economic fact that most consumers are going to prefer a product with a lower price - or failing that, companies are going to prefer the highest profit margin - and there's no denying the increase in productivity that automation provides. In the highly competitive world of online retail, every competitive advantage must be implemented in order to stay ahead of a never ending line of competitors hoping to gain market share, and even since long before Henry Ford's assembly line, automation has always been the key to staying ahead of the game.