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Amazon keeps adding to its empire—both on the fulfillment side and on the renewable energy side.
The company keeps snapping up and building real estate throughout the U.S., a move that comes as other players—particularly Walmart—ramp up comeptition with the e-commerce juggernaut.
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According to Amazon CEO Andy Jassy’s April letter to shareholders, the company has been focusing heavily on faster delivery times, made possible in part by an increase in localized facilities.
“In 2023, Amazon delivered at the fastest speeds ever to Prime members,” he wrote. “In the U.S., this result is the combination of two things. One is the benefit of regionalization, where we re-architected the network to store items closer to customers. The other is the expansion of same-day facilities, where in 2023, we increased the number of items delivered same day or overnight by nearly 70 percent YoY.”
Jassy also said the company’s inbound fulfillment processes and how and where it places its inventory are in focus for 2024. Indeed, Amazon seems to be putting its money where its mouth is.
In 2024, Amazon has already—or has plans to—add more than 20 million more square feet of fulfillment center space to its real estate portfolio, according to MWPVL. New facilities have or will be popping up in California, Florida, Georgia, Massachusetts, Oregon and other states, the supply chain consultancy’s tracking documents show.
These more regionalized fulfillment centers, Jassy said, have helped to decrease the length of travel for orders, which decreases the company’s cost to serve. With the savings, Amazon can “invest in speed improvements and afford adding more selection at lower average selling prices,” Jassy said.
But fulfillment centers aren’t the only infrastructure Amazon has been investing in lately. The company announced Tuesday that its machine learning systems, powered by AWS, have been operationalized at a solar energy site in Baldy Mesa, California.
A machine learning algorithm will help a battery system determine how to store and subsequently distribute energy, particularly during times when it’s dark out. During the daytime, the grid runs on solar, so long as it’s not too cloudy for the sun’s rays to reach the solar panels effectively. Simultaneously, the battery energy storage system (BESS) charges, capturing energy to use for later.