Market pressures incentivize adding more automation to online shopping. Drone deliveries could be the next frontier.
Santa Claus flies around on Christmas Eve, landing on rooftops to deliver packages to good girls and boys. Soon, drones may fly around on Christmas Eve, landing on front yards to deliver packages to parents who forgot to buy presents.
In 2016, Amazon Prime Air was developed as an autonomous drone delivery service. For orders weighing less than 5 lbs and customers within 10 miles of a participating fulfillment centre, a drone could fly a package direct to the customer within 30 minutes.
This ambitious new program has yet to be launched on a large scale, but could represent the frontier of the online shopping space. A product’s “last mile” from manufacturer to customer is often the most expensive part of the journey, accounting for up to 41% of overall transportation costs. The potential to automate this “last mile” is a big deal.
For retailers, incorporating drones for the last mile could bypass 3rd party logistics companies, reduce delivery times, avoid traffic delays and potentially cut costs in the long term. It also offers the opportunity for a more customizable delivery time window.
Single-delivery drones can be dispatched at any time of day, unencumbered by rush hour traffic or a driver’s drop-off schedule. A 2019 survey suggested 73% of people prefer deliveries at convenient times rather than the fastest time. Autonomous drones could be the solution for both.
For this growing space, companies like Flirtey, TeleRetail and Refraction AI have developed drones for the air, road or sidewalks. Boston Dynamics’ creations are some of the most recognizable robots, able to carry boxes and navigate through doorways, rough terrain and stairs just like real-life humans or dogs. On top of the drone revolution is the advent of self-driving cars and trucks, themselves able to transport autonomous drones around town. The more autonomous robots that enter the market, the more possibilities emerge for automated supply chains and deliveries.
So what would a drone delivery economy look like?
- Distribution centres dispatching products within minutes of receiving orders
- Autonomous drones traveling via air, roads or sidewalks depending on the product, timeframe, weather and traffic
- Packages being dropped-off at front doors, backyards, curbsides, building rooftops, convenience stores, or locker depots
- Digital marketplaces of autonomous robots’ services being used to pick up and drop off packages, anywhere, anytime
In preparation for this possible future, Amazon patented a beehive-like structure that would allow for multiple delivery drones to take off and land at once. A handful of “beehives” in an urban area could add new possibilities to supply chains, thereby reducing traffic and emissions.
This drone-oriented economy could extend well-beyond online shopping. Food delivery services from GrubHub, to Uber Eats to an average pizza delivery person could be switched to drones. Idle retail delivery drones could be dispatched to pick up and drop off pizzas in between routes. Restaurants that have recently integrated with food delivery apps may soon integrate with drone services to bypass human drivers.
From there, what next? Mail? Groceries? Laundry?
A world of abundant automated deliveries drones has significant cost and time savings benefits, but could also carry big downsides as well.
Aside from constant buzzing noises above our heads, drone deliveries could mean job losses. The retail apocalypse that has been brought on by online shopping has only been accelerated by Covid-19. As each shopping mall closes, jobs in sales, inventory, transportation, janitorial work and food service abruptly disappear. It takes fewer people to run a fulfillment centre than it does a shopping mall.
The bankruptcies of Sears, Toys R Us, JC Penny, and many more illustrate the changing retail landscape, towards e-commerce and fewer humans. The same economic incentives and market pressures that led people to shop online could very well be the same that drive people to click “Drone Delivery” at checkout. If it can be done faster, cheaper and more conveniently, the market will choose drones over humans.
The company that can leverage emerging autonomous drone technology into their last mile, with touchless, customizable delivery times will have an advantage.
As for the reasons to shop at a physical store, they are few and dwindling. This is a big problem for anyone in the retail or delivery space.
Santa being replaced by drones will spread Christmas cheer to good boys and girls, but will probably be bad news for his elves.
Below is the video I created for this article.
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