Amazon is betting $25 billion on AI and robotics, hoping to automate warehouses and cut costs. But startups like Relay are already reshaping ecommerce logistics with machine-learning-powered deliveries, expanding faster than traditional players can react.

In this issue, we explore Amazon’s AI gamble, Relay’s tech-driven disruption, and what these shifts mean for online retailers. Will Amazon’s investment be enough, or is the future of ecommerce moving elsewhere? 

Read on to find out. 🚀📦

AI & AUTOMATION

Amazon Invests $25 Billion in AI and Robotics to Enhance Retail Operations

Amazon is ramping up its automation efforts by investing up to $25 billion in robotics and AI-driven warehouse operations. The company aims to enhance supply chain efficiency, reduce human labor costs, and streamline fulfillment center processes. Its latest Shreveport facility is already showing a 25% cost reduction, proving the impact of AI-powered logistics. Additionally, Amazon is aggressively hiring AI and robotics experts to further advance automation technologies. These moves signal Amazon’s ambition to set new standards in ecommerce logistics and customer fulfillment.

Mastercard will integrate Feedzai’s AI-driven fraud detection platform into its Consumer Fraud Risk (CFR) solution. This tool helps banks detect and prevent scams in real time, particularly in account-to-account transactions. Since launching in the U.K. in 2023, APP scam losses have dropped by 12%.

Key insights:

AI-Powered Warehouses: Robotics and machine learning are driving fulfillment speed and cost efficiency.

Operational Cost Savings: Facilities with high automation have already reduced operational costs by 25%.

Talent Acquisition: Amazon is hiring top AI talent to push automation beyond traditional fulfillment strategies.

Retailers and ecommerce businesses observing Amazon’s transformation may need to rethink their supply chain strategies to stay competitive. Increased automation in fulfillment centers is expected to reshape logistics, reduce delivery times, and set new industry benchmarks.

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DELIVERY INNOVATIONS

Relay Secures $35M to Disrupt Home Delivery Market

London-based delivery startup Relay has secured $35 million in funding to challenge traditional home delivery giants. The company aims to expand into eight new distribution hubs across the UK, focusing on efficiency and affordability. Its machine-learning technology optimizes delivery routes in real-time, ensuring drivers take the fastest and most cost-effective paths.

Key Findings:

AI-Optimized Delivery Routes: Machine-learning algorithms ensure faster, more cost-effective deliveries.

Expansion Plans: Relay is opening eight new hubs to handle rising ecommerce demand.

Gig-Economy Model: Competitive driver pay and flexible work structures fuel business growth.

As same-day and rapid deliveries become consumer expectations, ecommerce businesses must consider how emerging AI-driven logistics services can enhance their customer fulfillment strategy. The use of AI to optimize last-mile delivery costs could provide small and mid-sized retailers with a competitive edge over traditional shipping providers

DELIVERY INNOVATIONS

Surge in Parcel Lockers as Delivery Demand Increases

Parcel delivery companies are rapidly expanding their networks of parcel lockers to meet the rising demand for convenient online shopping solutions. Companies like Geopost and DHL reported significant growth in locker locations, with increases of 63% and nearly 50%, respectively, in 2024. Parcel lockers offer consumers flexible collection times and lower costs compared to home deliveries, while also helping delivery companies reduce labor expenses amid rising wages.​

Key Insights:

Network Expansion: Significant growth in parcel locker installations by major delivery companies.​

Consumer Convenience: Flexible and cost-effective alternatives to traditional home deliveries.​

Operational Efficiency: Reduction in labor costs for delivery companies through automated solutions.

The rapid expansion of parcel locker networks indicates a shift towards more flexible and efficient delivery options in the ecommerce industry. This trend could influence retailers to integrate such solutions to enhance customer satisfaction and streamline operations.

GLOBAL SUPPLY CHAIN

Chinese Exporters Seek Alternatives Amid US Tariff Changes

Chinese small exporters are reevaluating their business strategies following the announcement by the US to end the de minimis rule, which exempts shipments under $800 from tariffs and customs checks. This exemption has been crucial for many Chinese ecommerce suppliers. The policy change has prompted exporters to consider expanding production in the US, exploring alternative markets, or passing costs onto consumers.​

Key Findings:

Policy Shift: The de minimis rule, exempting shipments under $800 from tariffs, is set to end.​

Strategic Responses: Exporters consider expanding production in the US, exploring new markets, or adjusting consumer prices.​

Ecommerce Impact: Potential decline in US market share for Chinese ecommerce suppliers.

Signing off,

The Merchant @CartHustle