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Amazon's Robot-Powered Warehouse to Handle Holiday Sales - Analyst Blog

Amazon.com Inc. ( AMZN ), recently unveiled its latest-generation fulfillment center where robots, vision systems and other high-end technologies have been deployed to speed up order deliveries.

The robots have been built by Amazon's subsidiary Kiva Systems, which it acquired two years ago for $775 million to increase the level of automation in its warehouses. These robots comprise mobile shelving systems that automatically transport items to workers. The company already has 15,000 robots operating in the U.S.

These high-tech fulfillment centers also use Robo-Stow - a 6-ton robot that moves large quantities of inventory directly to Kiva robots - for quick order fulfillment. Moreover, the new vision systems have lowered the time taken for receipt and unloading of inventory to less than 30 minutes from an hour or more previously.

The world's largest online retailer has been striving to expand and automate its fulfillment centers around the world. These innovative technologies shorten the time taken to sort and pack products, thereby strengthening same-day or overnight delivery services. The robots help Amazon to easily cater to the surge in demand and traffic during peak holiday season.

The holiday season is crucial for Amazon as sales in November and December account for a major part of its annual revenues.

Amazon seeks to be the most customer-focused company and, therefore, is determined to improve its delivery system and offer better customer services. In this regard, Amazon plans to develop a drone-based delivery service to deploy airborne robotic drones for delivering packages to consumers in 30 minutes. In July, Amazon had requested the Federal Aviation Administration ("FAA") for permission to fly drones out of their test facility.

Amazon has a Zacks Rank #3 (Hold). Better-ranked stocks in this industry include Mercadolibre, Inc. ( MELI ), Overstock.com Solutions, Inc. ( OSTK ) and Geeknet, Inc. ( GKNT ). All these stocks carry a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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