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Robots are the roots under Amazon's growthAmazon’s like an iceberg — whatever you see, there’s a lot more under the surface. It’s a giant that owns giants, from its cloud business AWS to Whole Foods and One Medical. Its advertising business, still in its infancy, generates $30 billion annually. It's in your home, from smart speakers and tablets to video streaming and doorbell alarms. But underneath the water is the ruthless focus on efficiency and early investments in technology that enabled its rise. It kicked its robotics operations into high gear in 2012 with the company’s acquisition of industrial robot maker Kiva Robotics. It didn’t stop there, also pouring resources into developing robotics software and AI-driven inventory management systems. Its advanced warehouse robots helped Amazon become the industry leader on two-day shipping, forming the backbone of its vaunted Prime membership program. “When I started 12 years ago, it would take an operator one hour and a half to take 100 units from the shelves and put them to the packer station to be packed,” said Stefano Perego, Amazon vice president of North America and EU customer fulfillment. “Today, with the robot, we can do that in 20 minutes.” Most companies still cannot deliver Amazon's promise and very few are capable of getting to same-day, one-day, or two-day delivery,” said Citizens JMP Securities analyst Nick Jones. “It is a differentiator.” Robotics improves safety risk in warehouses and enables regionalization, which allows Amazon to split the US into eight regions instead of a single network, said Perego. Its fulfillment network, staffed by 750,000 robots, uses AI to optimize inventory management, making sure that each location has the items most likely to sell in that region. The practice reduces shipping costs, improves margins, and allows customers to get their favorite items in a flash. Jones said that, while it’s difficult to quantify the growth that Amazon’s robotics investments have led to, as the company matures, it’ll rely on these efficiency savings to drive its net profit and prove its worth to investors.
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