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Amazon's New Robots to Aid Automation at Fulfillment Centers

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Amazon (AMZN - Free Report) is leaving no stone unturned to bolster distribution strength by capitalizing on robotics.

This is evident from the company’s latest move to introduce two new kinds of robots — Xanthus and Pegasus, which are likely to accelerate and smoothen operations at its warehouses and fulfillment centers.

We note that Xanthus is the modified version of Amazon’s drive robots which the company has been focusing since the Kiva Systems buyout in 2012. Moreover, the company is gearing up to unveil two more versions – Xanthus Sort Bot and Xanthus Tote Mover.

Meanwhile, Pegasus is well-equipped to sort and move individual packages. It also helps in minimizing damages and reducing delivery times. Further, Pegasus features same level of capacity as Kiva robotic drives. Amazon has already deployed 800 units of this robot at few of its fulfillment centers.

We believe the new robots are likely to aid automation at Amazon fulfillment centers, which in turn will boost its retail and e-commerce strength.

Retail Robots Space Holds Promise

Robotics that utilizes AI and ML techniques are becoming mainstream in retail industry. Per a report from Bekryl, global market for retail robots is expected to witness a CAGR of 30% between 2017 and 2028.

Further, a Research and Markets report indicates that worldwide inventory robot market is expected to witness a CAGR of 13% between 2019 and 2023.

Amazon is well-poised to reap benefits from this booming market with its growing robotics initiatives.

Apart from the latest move, the e-commerce giant acquired Canvas Technology, a Boulder, CO-based robotics startup, which is best known for its fully autonomous cart system that leverages 3D imaging techniques. Notably, these cart type robots are of great use in fulfillment centers as they aid in shifting goods around warehouses.

This buyout is likely to bolster Amazon’s capabilities in robotics. Moreover, the move bodes well for the company’s sustained focus toward reinforcing operations in fulfillment centers and warehouses with the aid of robotics technology.

Additionally, Amazon launched a self-driving delivery robot, Scout, which is capable of delivering packages safely at the doorsteps. It is currently available in Snohomish County, WA.


Strengthening Competition

Apart from Amazon, retailers like Walmart (WMT - Free Report) , Target (TGT - Free Report) and Kroger (KR - Free Report) have also realized the need of retail robots in this fast-paced world.

Walmart has deployed moving shelf-scanning robots which are capable of detecting any shelving error at its 50 stores across the United States. Further, the company revealed its plans to introduce 360 floor scrubbing robots to its 1,500 stores. Additionally, Walmart is testing a bot that aids in unloading boxes from delivery trucks and automatically scan them across its 500 stores.

Meanwhile, Target has been experimenting with a robot store clerk at its stores. Notably, the robot is capable of tracking inventory and also acts as an autonomous shelf auditing robot.

Further, Kroger is gathering steam to build an automated robot warehouse in Monroe, OH in collaboration with Ocado.

Nevertheless, Amazon has already deployed 100,000 robots across 25 fulfillment centers in the United States and 200,000 drive robots worldwide.

Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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