New technologies are set to radically disrupt what retail deliveries currently look like (Photo by Scott Olson/Getty Images)
The last mile is often the most inefficient and costly part of getting online purchases into the hands of the consumers who ordered them. Once packages are off the plane, boat, train or truck, how do they get to the shopper’s home in the quickest and most effective way possible, especially at this holiday time of year? With e-commerce on the rise and expectations around such deliveries only increasing – from days, to hours, to minutes – retailers are exploring all sorts of new opportunities to ensure more seamless processes.
A recent report from real estate advisory firm, Colliers International, shows there’s growing need for delivery choices in order to satisfy consumers. It highlights that 33% of customers in the UK are now opting for in-store collection, followed by 13% in the US, though it expects these numbers to double by 2017. It also outlines that towns and cities are going to a need more intricate network of urban logistics to cope with demand.
There’s work accordingly being done around retail warehouses closer to cities, as well as skyscraper sheds like those already seen developed in Hong Kong, Singapore and Japan. Increasing focus is also being placed on bicycle couriers in order to help balance traffic congestion and manage CO2 emissions. And then there’s land robotics and drones – both somewhat further off, but relevant enough to be discussed at the Wired Retailconference in London this week, where three businesses outlined ways they’re disrupting what we traditionally expect retail delivery to look like.
UberRUSH
First up was Uber with a focus on its evolving role in the on-demand economy. Beyond just moving people, this is a company looking to also move things, said Jo Bertram, regional general manager for the UK, Ireland and Nordics at Uber. It’s done so in numerous cities already on a marketing stunt basis – i.e. delivering kittens and ice cream – but now its scaling that idea by using its same network of drivers to get consumers anything they want at the touch of a button.
UberRUSH, as the service is called, launched in New York, San Francisco and Chicago last month (a revamp of an original service introduced in NYC in early 2014). It allows small, local businesses like shops and restaurants to quickly send products at relatively low-cost.
In a blogpost at the time, Uber said: “Think about all the times you hop in the car to pick up groceries, house supplies, or Sunday night takeout. These little runs seem harmless but they add up. In fact, 20% of all trips in the US are just to move things from A to B (as reported by the National Highway Traffic Safety Administration Survey) and we’re wasting thousands of hours and gallons taking them.”
Bertram added: “Our mission is to make getting anything in your city [from a bunch of flowers to burritos] more convenient, affordable and reliable than picking it up yourself.” It negates the need for small businesses to afford and manage complex logistics infrastructures, she added, and ultimately helps reduce congestion in cities. Furthermore, with Uber’s bicycle courier option, the solution for retailers has the potential to not only be faster, but greener too, she said.
Starship Technologies
Starship Technologies
Starship Technologies
Starship Technologies is an Estonia-based business just launched by one of the original co-founders of Skype. Its aim is to do to delivery what Skype did to telecommunications – radically disrupt it. Its land-based delivery robots came out of stealth mode three months ago accordingly.
Based on cute shopping trolley-like, autonomous vehicles, this is essentially about putting wheels on your parcel, said Starship co-founder, CEO and CTO, Ahti Heinla. They will move on pavements alongside pedestrians at a comfortable 4mph (smart enough to know to stop when they detect something in front of them), and carry roughly two shopping bags. Optimized for up to a two-mile radius, they can deliver items to consumers in less than 30 minutes. Shoppers are sent a notification on their phone when the robot gets to their door, through which they gain unique and secure access to open the lid and collect their items.
The company is still seeking permissions from local government to launch the robots in the UK, but hopes to do so in test mode in 2016 before full commercial rollout in 2017. “Everybody in the delivery sector hates the last mile,” he said. “It takes about £3 to £7 to deliver the parcel,” Heinla explained. Starship hopes to reduce that cost to just £1 per item.
Flytrex
Flytrex Sky
Flytrex Sky
While Starship’s robots are likely to beat drones to market, Heinla believes unmanned aerial vehicles will also have their place. Enter then, Flytrex, a Tel Aviv-based business competing with numerous others in exploring the opportunities to deliver products to consumers by drone.
Founder Yariv Bash explained that today sees more than 25 million parcels being transported around the world everyday, the majority of which weigh less than 1kg. He imagines a world with drones delivering everything from groceries to books and pharmaceuticals to shoppers in just 10-15 minutes. With them connected to the cloud, they will also be able to intelligently store and react to information in real-time including weather changes and other drones flying around.
What stands in the way of course, are regulations first and foremost. Last year the European Commission, for instance, said it wanted further regulation on commercial drones in order to prevent issues with safety, privacy and data protection. Meanwhile, Amazon has been pushing ahead with gaining support in the US to do so, though that’s yet to become a reality. As the page dedicated to its ongoing Prime Air project reads: “We will deploy when and where we have the regulatory support needed to realize our vision. We’re excited about this technology and one day using it to deliver packages to customers around the world in 30 minutes or less.”
“With great challenge comes amazing opportunity,” insisted Bash during Wired Retail however. Drones are here to stay, he added, but explained that consumers shouldn’t expect to see them delivering items from a retail brand like Burberry for some time. “If I’m optimistic it’s 5 years. If I’m more realistic, then it’s more like 7-10 years,” he explained.