Amazon innovation and the desire to dominate retail

Friday was an eventful day on the stocks, as, for a brief time, Amazon climbed up the market cap valuation chart to beat Exxon Mobil and claim a spot amongst the top five most valuable companies. The retail giant beat analyst expectations for the second quarter and its stock is now up more than 40% over last year. Amazon pointed to the strength of the North American retail arm, while its global retail business is also making great strides, with the launch of Amazon Prime in India; and AmazonFresh in London, its first grocery operations outside the United States.

All of this success has led to Amazon’s founder, Jeff Bezos, being named the world’s third richest person. But, it seems, his ambition isn’t going to stop here. As an article in Saturday’s Irish Examiner exclaims: “Amazon boss Jeff Bezos has cornered online retail, jumped ahead in artificial intelligence with voice activated speaker, Echo, carved out a powerful spot in the media industry and is even dabbling in spaceflight.”

Spaceflight is not the only area in which Amazon is aiming for the skies. As its second quarter press release statement explains: “Amazon Prime Air and the UK government announced a partnership to advance the safe use of drones for small parcel delivery, providing Amazon with permission to trial new methods, including beyond line-of-sight operation.” Previously, aviation rules have prevented drones from flying within a certain distance of people, vehicles or buildings and regulators have insisted that drones remain within line of sight. These rules will be relaxed for some small scale trials, which will commence with drones carrying packages up to around 2kg or so in weight.

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Although it is not yet clear whether drones will become the preferred delivery mechanism of choice for retailers, any retailer that wishes to take the number one crown in such an intensely competitive market has to be ready for all future eventualities, and certainly does not want to be caught out. This puts innovation front and foremost for survival.

And a review of the latest patenting activity from Amazon shows full commitment to ‘owning’ cutting edge technologies relating to drones. For example, what happens when there is bad weather, or if a drone should become damaged or the flight cannot be completed for any reason? Well, a glimpse of a possible solution comes in one of Amazon’s latest patents, “Multi-Use UAV docking station systems and methods,” which shows drones sitting on top of lamp posts like pigeons, as it explains: “The docking stations may incorporate a number of features to enable UAVs to fly longer routes, to fly routes more accurately, and to provide shelter during adverse conditions.”

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With the UK leading the way for providing a suitable legal framework for tests to be carried out, could London be the first city to see such sights? Whether we ever see installations like these in our smart cities of the future, this commitment to new technologies is vital if Amazon wants to protect itself against rivals in a future competitive landscape - and cement itself as unequivocal leader. And beyond product and service offerings, the knowledge and know-how that Amazon amasses also creates a level of esteem and prestige. Indeed, its founder, Jeff Bezos, now counts among the latest of the tech leaders to be appointed to the Pentagon’s Defense Innovation Advisory Board, a board headed up by Eric Schmidt of Alphabet.

Of course, it’s not just in retail where drones are making a big impact. Organizations in fields as diverse as agriculture, industrial surveillance, logistics, traffic monitoring, pollution observation, mapping, tourism and real-estate are all investing heavily in drone technology.