Is it a bird? Is it a plane? No, it’s the cycling shoes you ordered. The barriers to mainstream drone delivery are lowering.
Once upon a time, the thought of autonomous drones delivering products was confined to sci-fi. But not any more.
Delivery drone trials are taking place right now around the world. It’s no longer a question of if but when drones will change the face of fulfilment for everyone.
The barriers to mainstream drone delivery are coming down. Aviation regulators around the world are succumbing to pressure from some of the world’s leading tech companies.
In the US, the Federal Aviation Authority has stated it will publish rules for widespread commercial use within the next 12 months – much earlier than previously anticipated.
These changes are taking place against a backdrop of innovative drone trials in the US, Australia and China by companies such as Amazon, Google and Alibaba.
Others are not just looking to the skies – land-based drones, such as Starship, are being developed.
These ground dwellers appear to be ‘flying’ under the radar as their airborne counterparts hit the headlines. However, it’s these driving drones that are likely to be seen in built-up areas where drone flight carries a high risk.
For the UK, drone delivery brings many exciting opportunities for retailers and customers.
So far, it’s only been those who live in large cities that have been able to enjoy the benefits of one-hour delivery.
Drones will mean people who live in less populated areas can enjoy the same luxury.
“Drones will mean people who live in less populated areas can enjoy the same luxury”
Retailers will be able to expand their national delivery coverage. They’ll be able to improve their services for more remote communities via a hub-and-spoke-type model.
The drone could deliver from a central distribution hub to a regional spoke location that was too expensive to service before. DHL has recently tested ‘Parcelcopter’ to deliver emergency medications to a remote North Sea island.
But this doesn’t mean people need to install landing pads at home to receive deliveries.
In the US, WalMart wants to take click-and-collect to the next level. It is looking at testing drones for a grocery pick-up point in its car parks. Despite such exciting prospects, it is likely that the first wave of actual drone deliveries will be small, mailable items.
Alibaba showed that by using flying drones in China to deliver ginger tea packets to its customers within the hour. Certain product groups, such as cosmetics and medicines, will be particularly well suited to delivery by drone.
But big questions remain unanswered. What impact will these flying and driving delights have on UK retailers?
And how will they implement the technology they need to make drone delivery real?
Retailers will need to carefully consider the impact across their entire operating model:
- Customer experience: How will they integrate drone delivery into existing channels? How will they ensure it’s easy for customers to book? And what will they charge for the luxury of drone delivery to home or store?
- Fulfilment: How will introducing drones impact the cost of serving their customers from different geographies and segments?
- Operations: How will they verify receipt? How will they protect their drones and the packages they contain? How will loss, theft and vandalism be monitored and controlled?
- Research and development: How will retailers fund the technology innovation and implementation? Who will be the retailers that pioneer that technology? Who will follow? And who will do nothing at all?
Whatever you think about drones entering our everyday lives, retailers cannot afford to ignore them.
They must start formulating their business case and closely monitoring customer and competitor trends now. Only then will they be able to assess the potential impact on the cost-benefit assumptions and decide when the time is right to act.
Whether it’s by air or on land, autonomously delivered online orders will become a reality. Retailers better get ready.
- Brian Kalms is a partner at Elixirr