How Robots and Drones Will Change Retail Forever

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From The Wall Street Journal:

Amazon’s one-million-square-foot distribution center in Baltimore is a massive fulfillment machine. Stand at one end of the warehouse, and its titanium-white scaffolding and seemingly endless conveyor belts disappear at a vanishing point that is, somehow, within the building. The machine is a dazzling combination of chutes, ladders, rollers and 11 miles’ worth of conveyor belts. Customers’ orders move from shelving into bins and from bins into boxes as they travel via the machine straight into delivery vans, passing by stationary workers at various points along the way. Humans are rarely required to move around here. It’s much faster, and cheaper, to have stuff brought to them.

This is where robots come in. Resembling oversize Roombas topped with Ikea shelving, these Kiva robots can carry up to 750 pounds of goods in their 40-odd cubbies. After a customer places an order, a robot carrying the desired item scoots over to a worker, who reads on a screen what item to pick and what cubby it’s located in, scans a bar code and places the item in a bright-yellow bin that travels by conveyor belt to a packing station. AI suggests an appropriate box size; a worker places the item in the box, which a robot tapes shut and, after applying a shipping label, sends on its way. Humans are needed mostly for grasping and placing, tasks that robots haven’t mastered yet.

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Amazon’s robots signal a sea change in how the things we buy will be aggregated, stored and delivered. The company requires one minute of human labor to get a package onto a truck, but that number is headed to zero. Autonomous warehouses will merge with autonomous manufacturing and delivery to form a fully automated supply chain.

We are in the early days of what might be called the “physical cloud,” an e-commerce ecosystem that functions like the internet itself. Netflix caches the movies you stream at a data center physically close to you; Amazon is building warehouse after warehouse to store goods closer to consumers. And the storage systems at those warehouses are looking more like the data-storage systems in the cloud. Instead of storing similar items in the same place—a helpful practice when humans were fetching the goods—Amazon’s warehouses store multiples of the same item at random locations, known only to the robots. Trying to find an Instapot at one of Amazon’s warehouses would be like trying to find where in the cloud one of your emails is stored. Of course, you don’t have to. You just tap your screen and the email appears. No humans are involved.

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Delivery is about to change drastically too. Amazon, Google, Uber and many startups are working on autonomous delivery drones that will one day connect us to the physical cloud. Remember the days before ride-sharing apps, when we hailed cabs with our hands or a phone call? Uber and Lyft made it easier. Now imagine summoning power tools or appliances delivered by drones. We may someday store objects we own in the physical cloud the same we way store photos in the digital one.

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A fully automated warehouse is just the beginning. Amazon and Walmart have patented blimplike warehouses that will float 1,000 feet in the air, armed with drones ready to deliver toothpaste and toilet paper to your doorstep as if they were files. Welcome to the physical cloud.

Before we get there, robots need to be able to perform every warehouse task on their own. While no other retailer comes close to Amazon in terms of scale, Ocado , an online-only grocer in England, has more sophisticated automation by far. In a brightly lighted warehouse an hour north of London, a swarm of Ocado’s R2-D2-size robots scurry about on an elevated grid of squares, crisscrossing and coming close to crashing into one another without ever doing so.

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More impressive than the robots is the software behind them. Ocado’s system requires an AI of unholy complexity. The AI is trying to optimize every aspect of Ocado’s fulfillment: where to store its tens of thousands of items, which of those should be packed first and into which bags, which items should go on which trucks, which delivery route to take so that ice cream doesn’t melt on the way. The optimal solutions for different factors don’t always agree with one another: The fastest way to load a truck may not be the most efficient use of its space. As a result, adding just one more variable to the system increases the difficulty exponentially. And Ocado is optimizing for millions of variables.

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Ocado’s system takes a fundamentally human and Byzantine process—receiving shipments from food manufacturers, stocking and restocking a warehouse, assembling customers’ orders and placing them into baskets, scanning them and packing them into bags—and automates it to an unprecedented degree.

It took 18 years and many iterations to create this system, which has enabled Ocado to quickly deliver groceries to a customer’s front door for about the same price as they would cost at the store.

Selling groceries may be just the beginning for Ocado. The company also has patents related to using its system in indoor, vertical-farming operations. One day, food might be grown in the same facility that stores and delivers it. Companies like AeroFarms are growing greens in giant warehouses on the outskirts of major cities. In the future, a robotic hand could pluck a pint of strawberries from the bin they were grown in and then pass them to a delivery drone.

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After warehouses, delivery vehicles are the next target for automation. Amazon and Walmart are working on how to get packages from a self-driving van to you, whether that’s by deploying an even smaller autonomous vehicle or by delivering to a locker in your neighborhood.

Link to the rest at The Wall Street Journal