In brief: If you live close to one of Amazon's warehouses, you could find your deliveries start arriving even faster, thanks to the company's new focus on AI. The system may rank items higher in Amazon's search results if they are located close to a user, meaning they're delivered faster and encourage repeat business.
Speaking to the Wall Street Journal, Amazon Vice President of Transportation Udit Madan said that when faster delivery speeds are on offer, customers are more likely to buy something and come back to shop with Amazon.
Amazon used to ship items to US customers across the country, even when it cost more than using regional warehouses. But cost-cutting and an increase in the number of warehouses have seen Amazon divide the US into eight regions, storing the more commonly ordered items in each region to keep shipping as local as possible.
The system could result in items showing higher in customers' searches if they're located closer to their homes, cutting down on delivery times and costs. Amazon said about 76% of products customers order are now from facilities within their region, whereas the figure stood at 62% one year ago.
AI is utilized in this regionalization effort by analyzing data and patterns to predict what products are likely to be in high demand and where.
"This isn't something we could have easily done in 2019 because we had a much more sparse network," Madan told the Journal. "The doubling of footprint really allowed us to have a lot more facilities that were closer placed to customers."
The WSJ writes that despite Amazon's focus on speedy shipping, some smaller merchants have reported experiencing delays when they send their items to the company's warehouses.
Amazon has long used forms of automation in its business. It continues to pack robots into its warehouses – about three-quarters of Amazon customer orders are handled by robotics. Amazon says the machines are collaborative and help with heavy, repetitive tasks, but using robots and AI at a company that is laying off 27,000 workers does little to alleviate fears of machines taking human jobs.
In another cost-cutting exercise, we recently heard that Amazon is offering some Prime members $10 if they pick up an item themselves rather than having it delivered to their home.