How Amazon uses AI & Algorithms
3 Major Areas inside Amazon heavily use AI, algorithms, and automation
Amazon has a very low key approach in leveraging algorithms, machine learning and AI in contrast to Alphabet/Google, Facebook, Uber or Apple.
The reality is that Amazon has been an early adopter of algorithms and automation for many years giving them an edge in using AI to improve efficiencies, reduce cost and improve customer experience. It has been heavily focused internally.
The Economist has a great read (paywall) on how Amazon is exploiting AI to gain significant business advantage and differentiation. Here are the top 3 areas driven by AI at Amazon:
Fulfillment Centers: Robots shuffle ‘pods’, algorithmically, inside Amazon’s giant warehouses — in fenced off areas. Amazon associates interact with the robots/pods in specially created gaps on the fence.
Some pick items out of pods brought to them by a robot; others pack items into empty pods, to be whirred away and stored. Whenever they pick or place an item, they scan the product and the relevant shelf with a bar-code reader, so that the software can keep track.
AI & algorithms work relentlessly to optimize the delays and efficiencies of product movement using the combination of Robots, Pods and Associates towards the goal of speedier product delivery. It was a pioneer in using robotics for its warehouses when it acquired Kiva back in 2012.
Amazon Web Services (AWS): Recently AWS has made a huge push (this on-demand conference is worth reviewing) in offering machine learning tools, solutions and services to its customers. AWS is using machine learning primarily to forecast demand for computation.
“We can’t say we’re out of stock,” says Andy Jassy, AWS’s boss. To ensure they never have to, Mr Jassy’s team crunches customer data. Amazon cannot see what is hosted on its servers, but it can monitor how much traffic each of its customers gets, how long the connections last and how solid they are. As in its fulfilment centres, these metadata feed machine- learning models which predict when and where aws is going to see demand.
Amazon Go: Go is Amazon’s cashierless grocery and it’s latest algorithmic venture. To figure out what items the shopper is picking up they are relying a bank of video cameras (an alternative may have been to use barcodes, RFID on items to figure out what is being shopped) — to build a profile (3D). This helps in tracking arms and hands as they are being used to handle and pick products from the shelves, and bill customers when they walk with their selections from the store.
This technology is being also leveraged by fulfillment centers in lieu of using barcode readers to identify products by the Associates.
It won’t be surprising, in future, that just like AWS, some of these use cases may be offered as products & solutions in the future. Amazon will continue to leverage technology to diversify its market presence and improve the customer experience.
