Amazon’s Kiva Acquisition Leaves Some Retailers Hanging
Did Amazon.com Inc.’s (NASDAQ:AMZN) acquisition of warehouse robotics company Kiva Systems leave the latter’s brick-and-mortar retailer customers hung out to dry? The Boston Globe reports that Kiva Systems’ efficient robotic warehouse system is currently used by several major retailers like Crate & Barrel, The Gap (NYSE:GPS), Office Depot (NYSE:ODP), Staples (NASDAQ:SPLS), and Walgreens (NYSE:WAG). Many of these companies were early supporters and adopters of Kiva’s revolutionary approach to moving merchandise in large warehouses.
According to Kiva Systems’ website, the warehouse system uses “hundreds of autonomous mobile robots and sophisticated control software” to “simplify operations and reduce costs while increasing strategic flexibility.” Kiva’s squat orange robots improve efficiency and reduce labor requirements for companies by delivering merchandise directly to human operators in warehouses.
However, Amazon bought Kiva Systems last year for $775 million. Since Amazon’s e-commerce business directly competes against many of Kiva’s longtime customers, retailers faced the prospect of abandoning Kiva’s technology or supporting a wholly owned subsidiary of Amazon, the Globe reports.