Amazon.com Inc. has doubled the number of robots that it uses in warehouses, but it is still adding 100,000 workers for the coming holiday season.
The Seattle-based online retailer had already hired 25,000 people for permanent positions, and it hired 80,000 seasonal workers last year. Unlike most brick-and-mortar stores, Amazon is hiring more people because of e-commerce demand, reported Challenger, Gray & Christmas.
“It used to be that the bulk of holiday hires would be in customer-facing positions on the sales floor and behind the cash register,” said CEO John Challenger. “These extra workers would also help pick up the slack in the backroom, helping to receive and stock increased deliveries. Now, as more and more shopping is completed online, the holiday hiring is shifting away from stores and into the warehouses.”
As part of that ongoing shift, Macy’s, Target, and Wal-Mart are among the major retailers that are adding order-fulfillment centers to compete with online retailers. Many of these companies are also investing in logistics robots.
Amazon, which acquired Kiva Systems for $775 million in 2012 and renamed it Amazon Robotics, has doubled the number of robots it is using to 30,000. The company is using warehouse automation at 13 facilities, up from 10 last year.
“We think it [Kiva’s technology] makes our warehouses more productive,” said Phil Hardin, Amazon’s director of investor relations, during an earnings call last week.
The fact that Amazon is still hiring tens of thousands of human workers suggests that there’s still a lot of room for the logistics automation to grow. Picking, sorting, and packing items is tedious work, and online retailers are racing to meet consumer expectations for instant gratification through speedy shipping. This is also why Amazon and Wal-Mart are pursuing possible drone deliveries.
‘A big hole’
And since Amazon uses Kiva’s robots exclusively, other robotics providers are offering their wares to competing retailers.
“When Amazon drops nearly $1 billion on something just to keep it out of the hands of competitors, it sends a really strong message to the market,” said Bryce Roberts, managing director at O’Reilly AlphaTech Ventures. “It left a big hole that’s still wide open.”
Fetch Robotics Inc. and Harvest Automation Inc. are among the companies whose robots are poised to take advantage of the growing demand. According to BloombergBusiness, they’re also both offering their robots for rent.
Fetch is working on “three pilots with really big customers in warehousing and manufactguring,” CEO Melonee Wise told Forbes, but she declined to identify which ones. She also said that there’s still more than enough work for humans.
“There’s a 600,000-person job gap right now for logistics and manufacturing,” Wise said. “They just don’t have enough people right now. Turnover is really bad. They also want to increase performance, and people have a rate limit. They get injured. There?s shrinkage. When you pile all these things up, there’s a great case for robots.”
“There has been no job loss associated with the use of robotics in our buildings and in fact due to increased efficiencies, some of our buildings utilizing robotics have the highest headcounts in our network,” Amazon claimed in a statement.
More on Logistics Automation:
- Packaging, Mobile Robots Must Keep Up With Product Lifespans
- Warehouse Automator GreyOrange Gets $30 Million to Expand
- Mobile Robots Become Essential to Competitive Logistics
- Amazon Picks a Robotics Challenge Winner
- Bubble Wrap Maker Buys Packaging Company
- Productivity Chasing Humans Out of Warehouses
- Fetch Robotics Raises $20 Million to Meet Warehouse Demand
“While the revenue growth in this market isn’t obvious because most suppliers are privately held companies that do not report their revenues, our research indicates that the warehouse automation market will see significant growth over the five-year forecast period,” said Clint Reiser, a researcher at ARC Advisory Group.
He credited the e-commerce boom, supply chain automation, and warehouse control software as major contributors to that growth.
Target plans to work with startup accelerator Techstars on small companies supporting the retail industry. It also plans to launch a concept store in 2016 that could be a test bed for robotics, since San Diego-based Techstars supports robotics startups.