Whether you’re receiving your pad thai or weekly groceries from a car or a drone, American demand for door-drop dinners is only getting stronger. A recent report from Capgemini found that 40% of shoppers rank delivery services as a must-have for food and groceries, and one in five say they’ll switch stores if delivery services aren’t available. Services like Instacart, Uber Eats, and Amazon Fresh are currently cleaning up in a huge, and growing, market. With the pandemic further heightening this demand, ffood delivery revenue hit $26.5 billion in 2020, an increase of more than 4x over its 2015 total.
Delivery services cut labor costs
The interest in meeting this consumer need with autonomous technology is driven largely by one very big expense: labor. Gómez says, “It’s a huge cost, and we’re facing pressure to increase minimum wage.” Luckily, grocery retailers have already been considering ways to save on the cost of salaries, he says. “Supermarkets are already looking to save on labor—they’re investing gradually in self-checkout, for example.” Gómez says that scarcity is also a factor. “Labor is not only expensive but hard to find, and people rotate out a lot—technology complements the efforts of the industry to rely less on labor.”
Of course, for all they may save on payroll, retailers will have significant investments to make in order to get their autonomous programs up and running—or flying. And it’s not yet clear how much of that cost can be reasonably passed on to consumers. Gómez cautions that retailers “have to do cost-benefit analysis very well, to analyze how much their customers are willing to pay for the convenience.”
Sellers will also have to find ways to tackle the logistics of storing and packing goods prior to delivery, of course. Some are turning to streamlined “microfulfillment” centers to handle this, particularly in urban areas where real estate can be costly. New “dark stores” dedicated to online order fulfillment could fulfill autonomous deliveries too. On a larger scale, Amazon has filed patents for drone fulfillment centers in skyscrapers, as well as airborne fulfillment centers permanently installed on floating airships—though for now, the latter option remains pie in the sky.
Driverless delivery
So far, Gómez says, the least-expensive way to make quick neighborhood deliveries has been by autonomous vehicles. These are being piloted in several markets, including lockable carts being used by Safeway in partnership with the robotics company Tortoise. They’re operated remotely and have a maximum speed of just 3 mph. Other vehicles, like those being piloted by Kroger, CVS, and Walmart, can travel up to 25 mph and look similar to scaled-down compact cars, though they don’t carry passengers. Developed by the California-based robotics company Nuro, the R2 autonomous vehicle isn’t required to meet traditional regulations for cars and trucks, thanks to a recent ruling.
Of course, autonomous deliveries can face serious potential problems that go far beyond broken eggs and spilled milk. Both drones and driverless vehicles can struggle with stormy weather, and landing or parking can be difficult or impossible in crowded urban environments. That’s why most of the pilot programs have taken place in suburban and rural areas, where there’s ample room to maneuver and drop deliveries.
Whether you’re receiving your pad thai or weekly groceries from a car or a drone, American demand for door-drop dinners is only getting stronger. A recent report from Capgemini found that 40% of shoppers rank delivery services as a must-have for food and groceries, and one in five say they’ll switch stores if delivery services aren’t available. Services like Instacart, Uber Eats, and Amazon Fresh are currently cleaning up in a huge, and growing, market. With the pandemic further heightening this demand, ffood delivery revenue hit $26.5 billion in 2020, an increase of more than 4x over its 2015 total.
Delivery services cut labor costs
The interest in meeting this consumer need with autonomous technology is driven largely by one very big expense: labor. Gómez says, “It’s a huge cost, and we’re facing pressure to increase minimum wage.” Luckily, grocery retailers have already been considering ways to save on the cost of salaries, he says. “Supermarkets are already looking to save on labor—they’re investing gradually in self-checkout, for example.” Gómez says that scarcity is also a factor. “Labor is not only expensive but hard to find, and people rotate out a lot—technology complements the efforts of the industry to rely less on labor.”
Of course, for all they may save on payroll, retailers will have significant investments to make in order to get their autonomous programs up and running—or flying. And it’s not yet clear how much of that cost can be reasonably passed on to consumers. Gómez cautions that retailers “have to do cost-benefit analysis very well, to analyze how much their customers are willing to pay for the convenience.”
Sellers will also have to find ways to tackle the logistics of storing and packing goods prior to delivery, of course. Some are turning to streamlined “microfulfillment” centers to handle this, particularly in urban areas where real estate can be costly. New “dark stores” dedicated to online order fulfillment could fulfill autonomous deliveries too. On a larger scale, Amazon has filed patents for drone fulfillment centers in skyscrapers, as well as airborne fulfillment centers permanently installed on floating airships—though for now, the latter option remains pie in the sky.
Driverless delivery
So far, Gómez says, the least-expensive way to make quick neighborhood deliveries has been by autonomous vehicles. These are being piloted in several markets, including lockable carts being used by Safeway in partnership with the robotics company Tortoise. They’re operated remotely and have a maximum speed of just 3 mph. Other vehicles, like those being piloted by Kroger, CVS, and Walmart, can travel up to 25 mph and look similar to scaled-down compact cars, though they don’t carry passengers. Developed by the California-based robotics company Nuro, the R2 autonomous vehicle isn’t required to meet traditional regulations for cars and trucks, thanks to a recent ruling.
Of course, autonomous deliveries can face serious potential problems that go far beyond broken eggs and spilled milk. Both drones and driverless vehicles can struggle with stormy weather, and landing or parking can be difficult or impossible in crowded urban environments. That’s why most of the pilot programs have taken place in suburban and rural areas, where there’s ample room to maneuver and drop deliveries.
