By Gary Elinoff, contributing writer
Yes, the first big doings attributable to Amazon’s groundbreaking purchase of Whole Foods will take place in the warehouses. Gary Hawkins, CEO of the Center for Advancing Retail and Technology, told Bloomberg, “The easiest place for Amazon to bring its expertise to bear is in the warehouses because that’s where Amazon really excels.” The efficiency and cost reductions made possible by the warehouse robots should afford Whole Foods customers significant price reductions at the checkout counter, even though robots won’t be visible at retail outlets themselves — at least not at first.
What’s all this about robots, anyway?
The story might be said to have begun with Amazon purchasing warehouse automation company Kiva back in 2012. Right now, Amazon has deployed about 30,000 Kiva Robots around its warehouses globally, and according to an article in Bloomberg, Amazon’s Dave Clark has estimated that the bots have cut down operating expenses by about 20%.
Image source: CNET.
Amazon, in essence, has made a tremendous dent in the problem of choosing from a huge variety of items and selecting those chosen for inclusion into a package to be delivered to the homes of retail customers. You can see the Kiva Robots in action at an Amazon facility in this CNET YouTube Video.
In the near-term, expect to see Amazon opening up new automated warehouses capable of handling fresh food, something even rival Walmart hasn’t done. This will be a challenge even for Amazon because dealing with perishables is something never yet attempted to do in an automated setting.
So what about the retail locations?
A vision of the future might already be visible at its Seattle-based AmazonGo stores. Perhaps best described as high-tech bodegas, customers can pick up what they want at these small convenience stores, make contact with the store via smartphone, leave without any human contact at all, and then be billed online for what they “bought.” At this time, there are no plans to introduce this technology to Whole Foods itself, but it’s hard to imagine this clever strategy not eventually being adapted chain-wide.
The many hundreds of Whole Foods retail outlets are located in some the most desirable, upscale locations in the U.S. and Canada, areas just loaded with online shopping addicts. It’s hard to imagine each and every one of them not doubling as pickup hubs for online purchases — a great way for Amazon to save on delivery costs and for consumers to avoid the all-too-frequent theft of items waiting unguarded in busy high-rise lobbies.
Amazon already knows almost everything else about us, and now they’ll also know what we like to eat. The opportunity for cross-selling will be huge. Clearly, the future is now.
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