Amazon Closer to Perfecting Grocery's Last Mile

Amazon is acquiring Zoox, a California-based autonomous vehicle company, as it looks to cut the costs and complications still present in the last mile.

Amazon says Zoox is working to "imagine, invent and design a world-class autonomous ride-hailing experience," said Jeff Wilke, Amazon’s CEO, Worldwide Consumer. But the Zoox acquisition may mean big changes in the logistics and delivery business, which is core to Amazon. It is likely that Amazon will focus more on integrating the technology into its distribution network, including its grocery delivery business, than building a fleet of cars. 

David Somo, senior vice president at ON Semiconductor, told CNBC that the acquisition is likely more focused on bolstering distribution, as opposed to developing a fleet of autonomous passenger cars to compete with Uber and Lyft.

“This fits well into Amazon’s model for automating its distribution network spanning from warehouse robotics, to last mile delivery services,” Somo said. He added that the acquisition should “drive operational efficiencies, scale and eventually result in substantial cost savings across their distribution network.”

Zoox started in 2014 with the vision of purpose-built, zero-emissions vehicles designed for autonomous ride-hailing, along with an end-to-end autonomy software stack. Zoox's vehicle focuses on the ride-hailing customer, with integrated features designed to provide a better passenger experience. Zoox's approach to invention provides flexibility and the means to iterate rapidly to continuously deliver a superior experience for customers, according to Amazon.

"This acquisition solidifies Zoox's impact on the autonomous driving industry," said Aicha Evans, CEO of Zoox. "We have made great strides with our purpose-built approach to safe, autonomous mobility, and our exceptionally talented team working every day to realize that vision. We now have an even greater opportunity to realize a fully autonomous future."

Seattle-based Amazon is No. 2 on Progressive Grocer’s 2020 PG 100 list of the top grocers in the United States.