Amazon has shared that the company is using Artificial Intelligence (AI) to determine where products will be in demand to increase delivery speed.
AI will help Amazon plan delivery routes and determine stops based on unforeseen variables, such as weather, and will improve online shopping to help customers better find what they are looking for.
However, the big push for AI for Amazon is, according to the company, what it calls “regionalization,” that is, using AI to figure out where to put inventory to reduce delivery times.* 100006*
“I’m pretty sure you’re familiar with the vast selection we offer our customers,” said Stefano Perego, Amazon’s vice president of global operations.
“Imagine how complex the problem is of deciding where to put that unit of inventory. And position it so that we reduce the distance to meet customers, and increase the speed of delivery.”
To compress delivery times with the regionalization strategy, Amazon needs to quickly analyze data and patterns from hundreds of thousands, if not millions, of products to determine where—and potentially why—certain items are in demand in certain areas geographic.
These items will then be shipped to warehouses located in areas of highest demand. Perego stated that the plan is working, and that 74% of the products shipped to customers come from warehouses in his region.