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This week I ran into the perfect example of a problem only AI can solve.
I was in Las Vegas for Amazon's first re:MARS conference, an event dedicated to machine learning, automation, robotics and space. There I interviewed Amazon CEO of Worldwide Consumer, Jeff Wilke, who leads efforts including e-commerce, physical stores and Whole Foods. One of the things I wanted to ask him about was delivery. Now that Amazon has said it aims to deliver Prime packages in one day instead of two, how much point is there in pushing further?
To put a finer point on it: Is it worth it for Amazon to spend hundreds of millions of dollars to get me packages in six hours? What if I'm not even home? Do I need delivery that fast?
"Well, some stuff you might," Wilke said. "I mean, if you're out of baby diapers, you might need them fast. Faster than one day."
It was an interesting point; my youngest child is 8 years old now, so I'd forgotten those desperate moments.
"There are a bunch of services that are actually faster than one day," Wilke continued, "and we think we'll add more over time."
This struck me as news. Amazon is so tuned to efficiency, so focused on doing things faster, that even one-day delivery isn't good enough. It will keep spending to get faster.
At first this obsession didn't feel right to me, though. The problem is cost. To guarantee delivery within one day, you have to get a staggering variety of products – hundreds of thousands – close to the customer before she even orders. That requires sophisticated artificial intelligence to predict demand in a given metropolitan area. But to deliver in less than a day? That would require an army of delivery vehicles and people, fighting unpredictable traffic. Given today's tight labor market, I couldn't see how it would work, even with AI.
And then Wilke updated re:MARS attendees on Amazon's Prime Air Drone. The company has been saying for years that it plans to one day deliver packages by drone – but this week Wilke announced that Amazon is ready to start within months (not years). The company's drone technology relies on AI for safety, and the drone can theoretically deliver 5-lb packages in a 15-mile radius under an hour.
I had considered the potential of AI to predict demand, and allow Amazon to get the right packages within the right metropolitan area for one-day delivery. I hadn't considered the possibility that AI on a drone could further streamline things in the near-term. If Amazon doesn't have to worry about traffic or unpredictable drivers, then yes, I can see how the company could promise to deliver diapers to my backyard within two hours.
Is it still ambitious? Sure. But with AI-driven drone delivery, Amazon could expand the universe of problems that are even worth thinking about.
Senior finance pros and CFOs: we're hitting Chicago for our second @Work Human Capital + Finance event on July 16, featuring Chicago Fed President Charles Evans the CFOs of Adobe and Hyatt, among other great speakers. Apply now to join us to talk strategies about maximizing the ROI of new technologies, and growing your bottom line.
Until next week, |
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