Amazon To Acquire Automated Fulfillment Developer Kiva Systems for $775 Million
Amazonâ€™s planned $775 million acquisition of Kiva Systems â€” a developer of robots for the automated handling of inventory at distribution centers â€” shows that there is plenty of efficiency yet to be wrung from physical goods fulfillment.
â€śAmazon has long used automation in its fulfillment centers, and Kivaâ€™s technology is another way to improve productivity by bringing the products directly to employees to pick, pack and stow,â€ť says Dave Clark, Amazon’s vice president of global customer fulfillment, in a statement.Â Kivaâ€™s robots already process orders at the fulfillment centers of Toys R Us, Staples, and other major retailers; Amazon-owned Quidsi also employs the Kiva technology for e-commerce sites such as Diapers.com.
Wall Street is responding positively to the acquisition agreement. â€śOne of the knocks on Amazon is that their fulfillment is an expensive, manual process,â€ť BGC Partners analyst Colin Gillis tells Bloomberg. â€śTheyâ€™re not getting the benefits of scale. So theyâ€™re taking some steps towards it.â€ť
Gillis adds that Amazonâ€™s outright purchase of Kiva Systems, as opposed to licensing its automated fulfillment technology, â€śpotentially removes the advantage for any competitor.â€ť