Amazon is leveraging AI to match inventory with regional demand

According to Amazon, 74 percent of products shipped to customers are from warehouses in the customer's region


Amazon is using artificial intelligence to optimize its online commerce and delivery operations. The company is leveraging AI to predict where customers are most likely to buy certain products and place them in nearby warehouses for faster delivery.

In a statement given to CNBC News, Stefano Perego, Amazon’s vice president of customer fulfillment and global ops services, explained the strategy. He said that AI helps Amazon plan efficient delivery routes and stops, considering factors like weather and online shopping behaviour. He also said that AI enhances the online shopping experience by helping customers find what they want more quickly.

“So now, I’m pretty sure you’re familiar with the vast selection we offer to our customers. Imagine how complex is the problem of deciding where to place that unit of inventory. And to place it in a way that we reduce distance to fulfill to customers, and we increase speed of delivery,” he said. According to him, the key to Amazon’s success, according to Perego, is “regionalization,” or using AI to match the inventory with demand across different regions.

Perego claimed that the regionalization strategy is working well, and that 74 percent of products shipped to customers are from warehouses in their region, which allows Amazon to keep its same-day and next-day Prime delivery promise.

In addition to AI, the company is also using robots in its fulfilment centers. The company said that 75 percent of Amazon customer orders are handled in part by robotics.

Amazon is not the only company that is adopting AI for its business. Wendy’s is testing out a new ordering system that would see artificial intelligence chatbots take your order, while the Toronto Pearson Airport is using AI to reduce wait times for baggage.

Source: CNBC News