Amazon Australia's AI Integration: A Comprehensive Report

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E-BUSINESS APPLICATION
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TABLE OF CONTENTS
INTRODUCTION.......................................................................................................................................3
OVERVIEW OF AMAZON AUSTRALIA............................................................................................4
CURRENT OPERATIONS OF AMAZON AUSTRALIA.....................................................................5
IMPORTANCE OF AI FOR BUSINESS SURVIVAL...........................................................................6
HOW AMAZON USES ARTIFICIAL INTELLIGENCE......................................................................7
LITERATURE REVIEW........................................................................................................................9
DISCUSSION FROM REVIEW...........................................................................................................12
RECOMMENDATIONS...........................................................................................................................13
CONCLUSION.........................................................................................................................................14
REFERENCE............................................................................................................................................15
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INTRODUCTION
With the continuous technological revolution-taking place, companies to provide better services
to their customers with accuracy are incorporating more and more automation. Creative data
processing is the demand for high growth nowadays and artificial intelligence is a revolutionary
tool to achieve it (Crawford, 2016). Artificial intelligence pertains to the use of computer science
for developing an intelligence artificially demonstrated by machines. They are used to perform
cognitive tasks, which usually require human intelligence to perform. As stated by Tesler's
theorem, "AI is whatever hasn't been done yet." Computers perform such task by processing and
recognition of large scale data, understanding the pattern in it and making predictions. Artificial
intelligence is capable of getting more useful information out of the data and gets more and
better with time through progressive learning. It benefits the company in terms of speed,
accuracy, security and therefore the quality of the services. This report tells about how Amazon
Australia uses artificial intelligence to increase its productivity and quality of its services, from
its e-commerce websites to stores (known as pop up stores). There are various articles in this
report that discusses and compares insights of various authors and later gives some
recommendations about how the technology can be used more effectively by Amazon Australia.
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OVERVIEW OF AMAZON AUSTRALIA
Features provided by Amazon like Amazon Lex, Amazon Alexa and Amazon Go; the company
is using Artificial Intelligence very creatively and is, therefore, one of the leading companies in
terms of customer experience (Lo, 2019). Amazon Lex is a computer-operated conversation
interface and therefore acts as an assistant. Amazon Alexa is a virtual assistant too and uses the
same technology as Amazon Lex, it is capable in assisting its users through voice commands to
perform specific tasks and provide desired information (Smith and Linden, 2017). Amazon Go is a
revolutionary method of selling groceries through stores where customers can visit and purchase
without any cashier and therefore without the need for checkouts. The company uses an
approach called "flywheel" for its AI management. They use this approach to channelize traffic
to the right third party sellers based on customer reviews and choices and consecutively
improving its cost structure. This is how the flywheel rotates and improves continuously
(Agrawal et al. 2018).
Amazon has $20 billion market share in Australia and approximately 10% of it comes from e-
commerce. Amazon has received 1.7 million additional customers per 4 weeks since 2013.
Following statistical data depicts the number of Australians who shopped for each product
category between 2013 and 2016. Revenue of Amazon Australia has increased massively by
1500% in the recent fiscal year, it was $17.3 million in 2017 to $292.3 million in 2018
(Brynjolfsson and Mcafee, 2017). Following pie chart is the comparison of the share of Amazon
Retail Ecommerce sales between US and Non-US markets in the year 2018 and 2017.
Figure 1: Amazon Retail E-commerce
Source: Morgan (2017)
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Following data depicts revenues and profits of Amazon between (2014-2018) on a global scale.
Figure 2: Amazon Revenue Figures
Source: Morgan (2017)
CURRENT OPERATIONS OF AMAZON AUSTRALIA
Amazon Web Services (AWS) is a cloud-computing platform, which offers computing power,
storage for data, and other content, and services, which can be availed by any business to expand
and grow. It provides Infrastructure as a service (IaaS), packaged software as a service (SaaS)
and platform as a service (PaaS). Given below is the representation of AWS revenue growth
between 2014-2016 (Agrawal et al. 2017).
CLOUD COMPUTING MODELS BY AMAZON AUSTRALIA
The Infrastructure as a service (IaaS) provided by Amazon is also known as Amazon Elastic
Compute Cloud (EC2) is a service model which provides computer infrastructure through an
outsourced medium to give support to business accounting like billing, log access, monitoring,
backup, recovery and many more (Lo, 2019). Amazon handles the storage, networking, server
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while its user has to take care of runtime, middleware, OS (operating system), data and
application. Packaged software as a service (PaaS) is a set of computer software that performs
similar tasks. It omits the management of underlying infrastructure and allows the user to care
only about the management of the application (Welsh, 2019). It helps the business to grow more
efficiently and fast by omitting the time consumed in software maintenance, resource
management, patching or any such activities. In Software as a service (SaaS). In it, complete
software is provided in which the user does not have to worry about either of underlying
infrastructure and service maintenance, they only need to think about how to use that software.
Amazon prime is a service, which charges a subscription fee on monthly or yearly basis and
provides services like fast delivery through Prime Pantry and Prime Now, music and video
streaming on Amazon Prime Video and Twitch (a subsidiary of Amazon), unlimited storage,
kindle e-book rentals and many more (Glassman, 2019).
Figure 3: AWS Revenue Growth
Source: Morgan (2017)
IMPORTANCE OF AI FOR BUSINESS SURVIVAL
In today times, with the advancement of technologies, more and more companies are
incorporating various technologies to manage their data and provide better customer satisfaction
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(Brynjolfsson and Mcafee, 2017). AI intelligence is necessary for the management of big
companies like Amazon. Such a company's process large amount of data and processing these
large and complex data manually could be difficult and may often lead to mistakes. Some tasks
also require a large number of the workforce. With the use of Artificial Intelligence, processing
and managing these data with accuracy and efficiency becomes possible and therefore serves as a
great cost-cutting tool (Welsh, 2019). AI also increases speed and accuracy and therefore provides
better customer satisfaction because it saves times and is better in predicting the future demands
and requirements. Along with customers, it also makes easier for the workers to do their jobs
with speed and accuracy as well. In many industries, some jobs are risky to perform and lead to
injuries to the workers, with the use of machines and artificial intelligence, it becomes easier to
perform such task with ease and accuracy and therefore it opens new doors for market growth.
Although with so much work being done with AI easily, more and more companies are now
focusing on automation in their working, it also has a negative impact because it cuts the
requirement of human workers greatly and less availability of jobs (Brynjolfsson and Mcafee,
2017).
HOW AMAZON USES ARTIFICIAL INTELLIGENCE
Amazon has deployed a scientist who is working in collaboration with the researchers of the
University of Sheffield. The company uses an approach to use AI known as Flywheel. It pertains
to the interconnectivity within the company so that when any innovation around machine takes
place at one part of the company, it affects the efforts of the working of other parts as well. This
approach helps in maintaining a continuous flow of innovation and adaption within the company.
Given below is a representation of how the flow of information regarding any innovation takes
place and benefits the other parts (Daugherty et al.2019).
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Figure 4: Flywheel Approach
Source: Welsh (2019)
The deep lens is a great innovation, which has a machine vision, which is capable to some extent
in recognizing what the camera is capturing and giving details about it to the user. Amazon's
Alexa voice is a voice command assistant, which uses AI to learn more, and more with time by
predicting the choice of its user based on data collected by it (Agrawal et al. 2018). Inside the
Amazon's premises in Kent, Washington, the company has deployed a bunch of robots upon
which there are nine rows with packed products. The robot moves automatically whenever a
product is purchased from Amazon in the Pacific Northwest and moves towards the edge of their
field of motion from where a worker picks up the product and sends it towards another worker
through a conveyer belt for boxing it up. This is a creative way incorporated by the company to
process their orders because they process a very huge amount of orders and efficiency in it is
very necessary. In the Amazon's long-standing stowing process, AI is being used which enables
the workers to store items arrived from the distributors at any shelf of the warehouse and scans
the box as well as the shelf through a barcode scanner (Crawford, 2016). A computer records the
location of that item to be easily found later. The dual scanning associates thee box with its
location. With the help of AI, the worker can simply slide any product under a nearby scanner
and put it inside a bin without scanning it, the system recognizes where the product belongs to
and keeps a record of it for future. This technology played a huge role in saving effort and time
for the workers.
Another revolutionary application of AI by Amazon is Amazon go. It is an anticipated grocery
store in which the customers are allowed to pick up the products and leave without checking out
(Crawford, 2016). These stores are partially automated, working on the same type of technology
as in self-driven cars. It has deep learning algorithms and sensor fusions associated with each
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product in the store which senses when and what products are picked up or returned and add the
value in the virtual cart of the buyer. As soon as the customer leaves the store after picking up
their desired products, the amount is charged from the amazon accounts of the customer. The
customer has to use a free app called "Amazon Go". By holding the supported smartphone to a
scanning device at the entry, the computer records their entry after which they can continue
shopping (Smith and Linden,2017).
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LITERATURE REVIEW
According to Morgan(2018), amazon reorganized their artificial intelligence and machine
learning to reduce human efforts, enhance the capability to store data and information and
provide various services in a different field. The management strategies of Amazon are moving
innovatively in the field of technology which helps them to provide success on increase the
working efficiency (Prasad, 2019). Amazon Australia provides effective customer experience
and builds its structure for taking crucial decisions like the execution of artificial intelligence and
machine learning process. The author said that amazon uses flywheel approach to expand their
business, in this approach organization is completely focusing on one goal and there are no any
other objectives (Bertorello et al. 2018; Morgan, 2018). Central Amazon applies Artificial
Intelligence management strategy for the implementation of business strategies which helps them
to improve their business efforts in the global market. This approach is bringing new ideas and
thought process which reflects the operations of the company and makes positive changes and
innovations (Morgan, 2018).
Levy, (2018) mention in their article a conversation of SrikanthThirumalai with Amazon CEO
Jeff Bezos that discussing the new plan which has been introducing by Thirumalai that
organization needs to make an essential step to construct Amazon to AI powerhouse. Amazon
uses various AI practices at their workplace to improve performance and the process of robots
zipping is effective response and contributing to boosting the motivation of the organization. The
author provides the information about the competitors of the company is in a row such as
Facebook, Apple, Google and Microsoft (Love and Hartland, 2018). As per the information
provided by David Limp who is the VP of devices and services of Amazon that Bezos introduces
the new idea for the machine learning process in the organization but it might be the risky
decision to rebuild the existing system (Prasad, 2019). Now after a certain period, machine-
learning techniques are very much successful for managing various activities like a field in
images and voice recognition. The author characterizes the role of different personalities to build
such effective structure to improve the quality of Amazon’s business and also expand business in
various fields with the help of machine-learning techniques (Levy, 2018).
According to the article of BBC by Johnston (2018), Amazon opens a supermarket with no
checkouts which have been the revolutionary step for the growth and development of
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AmazonAustralia.The author indicates that amazon uses various technological ladders to build a
new structure which is entirely followed by artificial intelligence. Amazon establishes their first
AI store for the customer to shop grocery products without and customer services executives and
cashier which is called Amazon Go (Wurmanand Romano, 2016; Johnston, 2018). This store has
hundreds of ceiling-mounted cameras and different sensors to identify and recognize every
customer and their behaviour. In this store of Amazon, there is no need to take trolley or basket
to carry products, people just need to install Amazon Go application and add-on the selected
products and AI automatically make the whole process including billing and invoice generation
and also make payment through plastic money. It has been pretty amazing that there is no any
personal support to the customers in their grocery shopping but the artificial intelligence is
amazingly working to provide much better services to every customer (Johnston, 2018). All the
work is done by a computer which is collect different types of information in their system to
assemble in a group for the decision-making process by AI. That kind of store was recently
introduced in Washington DC and Amazon is planning to open such store in different nations to
expanding business through the innovative idea of artificial intelligence (Wurmanand Romano,
2016).
Wingfield, et al. (2018)states that in this modern generation, various organizations and start-ups
are in the mode of completing competition to accomplishing more advanced technology for the
improvement of organizational operational activities through artificial intelligence (AlBadawy et
al. 2019). They said that various amendments and upgrades are continuously increasing the
response of artificial intelligence and also bring innovative and creative ideas to achieve more
output. The Global Race is the advancement of AI with the help for different tools and
techniques which helps the organization to achieve its desired objectives. As per the information
provided by these authors that Amazon Australia is providing various facilitates and services to
their customers like online shopping, E-commerce, Amazon Go store, Cloud and data storage
services (Prasad, 2019). recently Amazon takes crucial steps to make their facilitates in online
payments in different modes to anyone with the help of this services Amazon is one of the
biggest organization which provides these facilities to their customers in different regions. But,
the concern of increasing the use of technology reduces manpower and employment (Wingfield
et al. 2018). It reduces employment by replacing potential, multitasking employees by machines
and gadgets. The ignorance of this factor is making a more negative impact on the business, the
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lack of personal touch of the employee to provide effective customer services is more essential
for any organization (Schulte and Lee, 2019). The authors said that the employees are the assets
of the organization and Amazon is depleting their assets by applying such machine learning
processes.
Figure 5: Artificial Intelligence Ignoring Employment
Source: Herbrich (2017)
According to Grewal, et al. (2017) the Artificial intelligence is an arena of supercomputer and
technological structure which focuses on the impersonator of human believed assumed
processes, learning ability, knowledge storage and others. Amazon is one of the largest
organizations in the world who provides the data and information storage facilities to the
customers. Artificial Intelligence is the future of relating business and which is more effectively
work when machine learning processes and other technical tools inbuilt in the structure (Prasad,
2019). With the help of self-generated data and information, the organization can forecaster
future activities and make proper plans to achieve its desired objectives. Some gadgets and
techniques are branding by own Amazon and this improves the decision-making process for the
growth and development of the organization. Amazon Australia builds its structure for future
growth and it was more effective when they structured it by the help of artificial intelligence
(Grewalet l. 2017). But anywhere in the positive outcome, there is negativity which reduces the
overall performance of the company, AI replacing employees with machines and other
equipment’s. The author wants to tell that Amazon is a self-constructed organization which takes
the support of AI to expand their business across the nation's boundaries and the use of different
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