Why auto parts retailers are piloting autonomous delivery vehicles

We’re excited to announce that XL Parts, one of the nation’s largest aftermarket auto parts retailers, will launch up to 10 udelv autonomous delivery vehicles (ADVs) in 2019. This post explores the opportunity within the auto parts industry to take advantage of ADVs.

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By 2026, 80% of deliveries will be made by an autonomous vehicle.

In 2018, ADVs made their first deliveries.

This gap is going to be bridged retailer by retailer, industry by industry. And while some industries will be slower than others to take advantage of autonomous vehicles (just like with the internet, the app store, and digital recording technologies in the past) others are most incentivized to reap the benefits of ADVs.

The aftermarket auto parts industry may benefit sooner than any other.

That’s right. The industry that will be among the first to invest in and benefit from one of the largest commercial applications of artificial intelligence is selling brake pads and windshield wipers

This is true for 3 major reasons:

1. They already manage enormous delivery fleets
2. Deliveries are B2B
3. The opportunity for ‘super sandboxing’

Let’s dive deeper.

1. They already manage enormous delivery fleets

Because auto parts retailers have been making deliveries to their clients (mechanics and body shops) since long before the internet, their delivery system is one of the oldest and largest of any industry.

These companies have decades of experience with the challenges of managing delivery fleets. Plus, with the rise of modern, techy, VC-backed on-demand delivery services, traditional auto parts retailers are now competing more fiercely for the same labor. And, many times, they’re losing.

ADVs can help auto parts retailers continue to grow their delivery businesses by removing the bottleneck of reliable, affordable labor.

2. Deliveries are B2B

Before an ADV can actually drive itself, it needs to create HD Maps of an environment. Depending on the scope of the operating design domain (the “ODD” encompasses the geographic area and conditions in which the ADV is expected to deliver), this mapping process can get quite complex.

With a B2B delivery model, routes are more predictable. Instead of a delivery going to any random house in a 10-mile radius, deliveries are limited to just a few dozen or hundred potential delivery locations. This means an ADV can be trained in a relatively short time, bringing auto parts retailers the benefit of fully autonomous vehicles at an expedited rate.

Additionally, customers (whoever retrieves goods from an ADV) need to be taught about the autonomous delivery process. With a limited number of customers (known hundreds instead of unknown thousands), auto parts retailers can quickly convert their customers to the new process.

Customers will experience huge benefits from their aftermarket retailer utilizing ADVs. For example, they’ll receive exact ETAs for the arrival of their deliveries, meaning they can provide their customers with better information and can plan their workers' time accordingly.

With these benefits, auto parts retailers that implement ADVs early will improve the service for old customers and attract new ones.

3. The opportunity for ‘Super Sandboxing’

Sandboxing is the concept of limiting the ODD and building out a commercial ADV operation in a smaller delivery radius, limiting the scope of technical challenges and maximizing speed to commercial deployment.

Super Sandboxing is doing this same thing to the extreme. A short (<40 miles), repetitive (daily) route can be automated in just months.

With the hub and spoke model common in the auto parts industry (with DCs supplying stores and stores supplying clients), ‘super sandboxing’ is a reality.

This is the delivery model in which XL Parts will use ADVs. A 25-mile route in Houston, Texas is driven 8–10 times a day, delivering parts from the main XL Parts distribution center to two XL Parts stores. The udelv ADV will be trained along this route, and ‘customers’ (XL Parts store managers and employees) at both stores will be trained to retrieve restocking deliveries from the ADV.

I’m an auto parts retailer (or any other business relying on delivery, for that matter). Why should I bother with ADVs?

ADVs are going to make deliveries safer and cheaper. These benefits will allow for a huge cost reduction in operating a delivery fleet, provide a consistent level of customer service, and grow revenues as delivery speed and quality expectations continue to rise.

We’re excited that XL Parts, one of the largest auto parts retailers in America, will be launching udelv ADVs to start learning about how ADVs will revolutionize their industry.

If you want to learn more about how ADVs might work for your business, email sales@udelv.com!