As e-commerce growth accelerates, a new focus is being placed on developing faster and more affordable and sustainable last-mile deliveries.
Although many hurdles remain, urban delivery robots are increasingly viewed as a potential option for last-mile deliveries over the next five to 10 years. Many vendors continue to draw significant funding as pilots, with limited deployments emerging globally.
Gartner’s 2019 CIO Survey reveals only 1% of retailers have deployed urban delivery robots. However, an uptick to 5% is expected by the end of 2019, signaling the beginning of what could be a strong growth period for alternative last-mile delivery solutions. Although deployments will expand in 2019, many economic, technologic and regulatory hurdles must be resolved for broader adoption.
Here are some of the most recent developments:
- This summer, United States home improvement store Lowe’s will trial robot deliveries in several unnamed markets. Lowe’s will use the delivery robot unveiled by FedEx in February.
- Casino’s Franprix supermarket chain is testing three delivery robots on the streets of Paris. The first trial will focus on delivering food to people with limited mobility or elderly consumers.
- At the International Motor Show in Hanover, Germany, Renault unveiled a last-mile delivery concept called Ez-Pro. It uses self-driving, electric pods. The French manufacturer says that last-mile delivery services are one of the biggest opportunities for disruption. It is driven by a desire from consumers for quicker delivery, the need of retailers to manage delivery costs, and the need for cities to look for new ways of managing congestion and cutting pollution.
- During the fourth quarter of 2018, Starship Technologies announced the world’s first commercial rollout of autonomous package deliveries on the ground, with robots delivering packages to consumers in Milton Keynes, a suburb of London. Milk, eggs, bread, bananas and orange juice are among the most popular items ordered. Consumers pay a delivery fee of about $1.25. Deliveries are made in 60 minutes or less. Starship intends to roll out a similar program in the U.S. soon.
- Backed by $92 million in venture funding, Nuro is partnering with grocery chain Kroger for autonomous delivery service in Scottsdale, Arizona. Nuro founders believe that autonomous delivery is a service consumers will pay a premium for, and will be commonplace within three to five years. Kroger sees delivery robots as a way to reach more consumers at affordable rates.
- Major brands are getting involved. Toyota AI Ventures has invested in Boxbot, a startup that hopes to bring self-driving vehicles to last-mile delivery. Daimler has invested in Starship Technologies.
Aside from saving money, some retailers and restaurants view last-mile delivery robots as a way to improve customer service and differentiate themselves from their competition. For example, robots could enable new consumer-facing services, such as deliveries on-demand, at a fraction of the cost, while limiting delivery issues for customers.
College and corporate campuses are emerging as ideal testing grounds for robot deliveries. In Germany, Daimler uses robots from Starship Technologies to deliver parcels internally at its Mercedes-Benz plant. Starship Technologies is partnering with U.S. universities to deliver takeout cafeteria food in as quick as 15 minutes.
Because of the high number of units per order, picking and packing is sometimes more expensive than last-mile delivery for online grocery orders. However, robots seem to be a solution for both areas. Kroger has partnered with Ocado to build 20 automated warehouses in the U.S. to improve fulfillment for online grocery orders. At one of Ocado’s warehouses in the United Kingdom, thousands of robots process 65,000 online orders a week. In making this investment, it is understandable why Kroger is taking the next step of testing mobile delivery robots in Arizona.
Legislation has passed to make self-driving robots legal on the sidewalks in the District of Columbia and Virginia, and similar laws are in the works in Florida and Idaho. Eight U.S. states have approved their use. The city of Dallas has approved a pilot project for sidewalk delivery robots. Other states also have expressed interest. However, some cities, including San Francisco, have banned the testing of sidewalk robots.
Robots are an ideal delivery solution for cities that have fully or partially banned cars and trucks, such as the Spanish city of Pontevedra and Oslo, Norway, which will ban all cars from its city center in 2019. Madrid plans to ban cars from 500 acres of its city center by 2020, with urban planners redesigning 24 of the city’s busiest streets for walking rather than driving.
That strategy will be required for large rollouts of urban delivery robots, which face major infrastructure problems when it comes to delivering to apartment complexes, for example. There still appears to be no clear way to get packages the last 50 feet. However, mobile robots could actually change how deliveries occur.
Some vendors report that consumers actually prefer to drop a pin of their location, be it at work or at a park, as opposed to receiving deliveries at home. One delivery model calls for consumers to come outside to unlock and remove their products from the robot, eliminating the threat of package theft.
John Johnson, Senior Writer, Supply Chain Industries and Programs, Gartner