At Amazon’s Delivering the Future event at a new testing facility in Dortmund, Germany, Retail Week spoke to executives at the tech giant about the newest innovations in robotics and delivery.
Rocco Bräuniger is vice president and country manager for Germany and EU expansion at Amazon, and Aaron Parness is director of applied science, robotics and AI at Amazon Robotics.
It was revealed in Dortmund that a new robot with a sense of touch dubbed “Vulcan” will be rolled out to Amazon warehouses across the globe in the future, and that same-day delivery will be expanding to more locations in Europe.
In front of a select group of global press, Bräuniger and Parness spoke about the potential same-day delivery has, the focus on customers, and colleague attitude towards the ever-expanding fleet of robots roaming the warehouse.
How will the investment in innovation and robots make Amazon more successful?
Parness: “The business case is we lower the cost to serve an order to our customer. So right now when purchasing something, there’s the costs of operating the fulfillment network of the delivery driver and all the pieces in the puzzle.
“If we can reduce that cost, we can save our customers money and start to offer a wider selection. So when we can reduce the cost to serve, it allows you to sell more low-cost everyday essentials from Amazon.
“So we don’t do a single roll of toilet paper today, because there’s no way to sell that at a price and fulfill that order in a way that makes any kind of business sense. But as we can add automation, this is one of the places where there’ll be benefits.
Is there any apprehension or concern from colleagues towards the robots?
Parness: “Broadly speaking, when people see the robots and talk to us about them, they’re really excited about the safety and efficiency benefits. It’s making jobs better, with less physical exertion, and less risk of injury. Now if you look at Hollywood movies, AI and robots can be scary, but we don’t see that when we actually go and talk to people who see and interact with the robots.”
Is there an ambition to roll out same day delivery everywhere?
Bräuniger: “I don’t think we should judge from today’s perspective. Of course, we want to expand it. I don’t know if it’s feasible in rural areas. In Germany, almost everywhere has a next day delivery service, but there are places where we can’t offer the next day, so the same day is even harder.
“Yes, there will be new technology, there will be new opportunities. We will grow and allow new logistics centres, fulfillment centres, and distribution centres that make it easier to be closer to the customer.
“When you are close to the customer, it’s easier to do same day delivery, but then you have to make sure that the right products are in this place. We will be investing in this area, we will be growing, and we have really high ambitions. But I wouldn’t go as far, as of now, to say we want to offer the same day to every single place.”
“We simply want to deliver what customers want, and we want to innovate on behalf of the customers”
Rocco Brauniger, vice president and country manager for Germany and EU expansion at Amazon
Why is there such a focus on speed of delivery?
Bräuniger: “Well, the focus on speed is because we hear from customers that they want stuff fast. We simply want to deliver what customers want, and we want to innovate on behalf of the customers.
“That doesn’t mean that customers always want things fast, they mainly want to have delivery accuracy. If I tell them something comes tomorrow, they’ll want to have it tomorrow. If I tell them it comes today, they’ll want to have it today, and therefore, we want to give customers the choice.
“Amazon day, for instance, means the customer can choose to have their items delivered on Wednesdays, because they’re always home on Wednesdays and then receive it on those days.
“But sometimes you just need stuff fast and we know that it’s especially the case for everyday essential items like toilet paper, laundry detergent, pet food, groceries and beauty products.
“Since we know that the customers want it, we want to deliver on this. By focusing on the customers and making sure that they get great prices and exceptional delivery experience with fast delivery and great selection within it, we know that we’re going to be successful.”
How do you choose which markets get same day delivery?
Bräuniger: “I just announced that we will be rolling out Augsburg (Germany) as one of the next of 20 cities that will be getting same day delivery. This is simply driven by having a logistics centre and fulfillment centre very close to Augsburg.
“It’s a city with a reasonable amount of people, but if you live in a city that has 20,000 people and is 60 miles from the next fulfillment centre, chances are pretty slim that you are next in line. You may be in line at some point when we choose micro fulfillment somewhere near you, but right now it just wouldn’t make sense.
“Also it’s not sustainable, because traveling for a one hour delivery for a couple of packages 50 miles away doesn’t really make sense. So we look into dense areas, where we have the most customers, or most potential customers.
“That doesn’t mean that we will not also invest more into getting closer to the areas where we think there’s great potential, and customers really want stuff fast.”
“Our homes are the most cluttered environment we regularly inhabit, and you need touch and vision”
Aaron Parness, director of applied science, robotics, and AI at Amazon Robotics
Can you explain some of the potential applications Vulcan and similar tech could have outside the warehouse?
Parness: “I absolutely believe the sense of touch, the use of video, along with physical AI can be intelligent, and can reason about what it feels and sees, containing hundreds of applications—a lot of them on Amazon. So we’re doing stow and pick today, but it could be in packing or last mile delivery.
“If you go beyond the Amazon fulfillment network and into retail spaces and healthcare spaces and very long term—I really don’t want to say this is two years away—but very long term, our homes are the most cluttered environment we regularly inhabit, and you need touch and vision.
“I think that version that comes in 20 years will be standing on the shoulders of the advances we have made in the last two years.”
No comments yet