Move over Allen wrenches and cryptic assembly instructions—there’s a new innovation in town, and it comes with propellers and cutting-edge algorithms. Swedish furniture behemoth IKEA is soaring into the future with a fleet of AI-powered drones designed to streamline inventory management within its sprawling warehouses.
After a year-long pilot at its Winterslag distribution center in Belgium, IKEA is gearing up to roll out these high-tech marvels to more locations within the next year. This initiative stands to drastically alter how retailers handle stock and, ultimately, how consumers experience shopping.
“Drones equipped with RFID and barcode scanners are significantly improving inventory accuracy and reducing the time needed for stock checks,” remarked Robert Khachatryan, founder and CEO of Freight Right Global Logistics, in a conversation with PYMNTS. “For instance, Gather AI’s drones collect data at a rate 15 times quicker than humans for specific tasks and can read 95% of the barcodes and labels in warehouses. This allows managers to reassign human cycle counters to more critical tasks.”
What began as a lone drone in Switzerland in 2021 has rapidly expanded into a fleet of over 250, buzzing around 73 locations spread across nine countries. This robust expansion indicates IKEA’s strong commitment to leveraging airborne inventory solutions.
“The IKEA drones utilize an AI-based algorithm to identify and photograph product storage locations,” explained Parag Parekh, Global CDO for IKEA Retail, in a recent news release. These mechanical overseers navigate towering shelves using a custom indoor positioning system, deftly avoiding obstacles to ensure accurate and efficient inventory tracking.
The Rise of the Warehouse Drone
Warehouse drones are not a phenomenon isolated to IKEA. The 2023 Drone Market Report from Drone Industry Insights reveals that drone usage in warehouses is growing by 15.7% annually, a trend poised to revolutionize retail operations.
This surge in efficiency extends beyond retail. “In the manufacturing industry, drones significantly expedite tasks like barcode scanning and stock tracking, while reducing the risk of human error,” said Shaun Wong, managing director of SLG Logistics, an international freight forwarder, to PYMNTS. “Consequently, warehouses are witnessing increased operational efficiency.”
For IKEA’s workforce, the integration of robotic colleagues promises transformative changes in warehouse duties. Gone are the days of scaling ladders to reach high shelves. Instead, employees can now concentrate on roles requiring human skills, such as customer service or intricate problem-solving.
This technological shift is noticeable across the retail landscape. Amazon has been testing delivery drones for years, while Walmart began exploring inventory drones in 2016. In China, eCommerce giants JD.com and Alibaba have been pushing the boundaries of drone applications within their supply chains.
The Economic Equation: Efficiency vs Employment
The financial ramifications of drone adoption could be significant. “The use of drones in warehouses can drastically cut labor costs by automating routine tasks like inventory checks,” mentioned Khachatryan. He also highlighted an unexpected environmental advantage: “According to the World Economic Forum, drones could cut energy use by up to 94% compared to traditional vehicles.”
However, the drone revolution comes with its own set of challenges. “Although drones are faster than humans at tasks like inventory scanning, which reduces labor costs, the initial investment is considerable,” Wong cautioned. He warned of potential job displacement, emphasizing the need for companies to perhaps retrain employees for other roles or operate with a smaller workforce.
Nevertheless, the industry is moving ahead resolutely. Khachatryan referenced a Gartner report predicting that “by 2027, 75% of organizations plan to deploy various forms of robotic automation in their warehouse operations.” This transition has already begun at IKEA, with its drone program set to expand to the Distribution Center in Perryville, Maryland.
The scope of drone applications is broadening rapidly. “As drone technology advances, new uses are emerging, like autonomous package delivery within large warehouses, monitoring conditions like temperature and humidity, and performing minor maintenance tasks,” noted Khachatryan. Wong envisioned even more possibilities: “Drones could be utilized for security patrols, transporting small items within the warehouse, or inspecting equipment, further streamlining warehouse operations and enhancing productivity.”
The environmental benefits are noteworthy as well. Khachatryan pointed out that “electric drones and various warehouse robotics are key components of Amazon’s strategy to achieve net-zero carbon emissions for all shipments, with a goal of hitting 50% of this target by 2030.”
As IKEA and other retail giants advocate for drone technology, the retail landscape is on the cusp of a significant transformation, powered by tiny propellers and sophisticated algorithms.