As competition intensifies in the retail space part of Amazon’s strategy of reducing costs involves replacing human labor with robots. This will boost efficiency and thus give the online retail giant the ability to sell merchandise at low prices. According to CNN in shipping a typical package Amazon currently requires only 60 seconds of human labor.
Part of the reason Amazon has been able to increase the number of robots at its facilities so rapidly is its acquisition of Boston, Massachusetts-based Kiva Systems, a robotics firm, five years ago. Amazon started deploying Kiva’s robots in its distribution centers in 2014. At first it started with 15,000 robots before the number was doubled a year later. In 2016 the number of robots at its distribution centers had increased to 45,000.
Other retailers are also responding and this includes offline retail giant and currently the largest retailer in the world, Walmart. In most of its stores which currently number 4,700, Walmart is increasingly making use of robots. Human staffing has already been reduced by 15% as a result in the last ten years.
At Home Depot, a home improvement retailer, human cashiers are being replaced by technology that allows for self-checkout. Home Depot is also conducting experiments by making scanner guns available to customers to make self-checkout even faster. And at Jeweler Tiffany, human silver polishers are being replaced with machines.
But in spite of the automation being done by brick and mortar retailers, Amazon still maintains a big lead with regards to leveraging robots. While initially human pickers were used to put together the items that a customer had ordered, now robots are used and all the human pickers have to do is wait for the robots to take the products to them. The process has been further speeded up in that the pickers are guided by algorithms to the exact position of the merchandise they are looking for.
But even as retailers continue to leverage robots and eliminating for human staff positions, Walmart has outlined a policy aimed at renewing domestic manufacturing in the United States with a view to creating jobs. According to The Boston Consulting Group, the world’s biggest economy has the potential of recapturing $300 billion worth of consumer goods which are currently sourced from overseas and this includes sporting, cookware and furniture goods.
“… because of our experience, Walmart is uniquely positioned to help facilitate broad engagement in accelerating the expansion of U.S. manufacturing,” said the United States Sourcing and Manufacturing vice president at Walmart, Cindi Marsiglio.