There has been a lot of talk over the past couple of years about the potential for robotics and drones to transform the digital commerce industry. Earlier this year, the UK government unveiled plans to build the world’s first drone superhighway by 2024, enabling deliveries and mail to be transported across a span of 164 miles. Drones and robots have even infiltrated the food delivery space, with Uber Eats piloting deliveries by autonomous vehicles. The demand for super-fast fulfilment has also seen the rise of dark warehouses, made up of an ecosystem of automated equipment, including robot arms, shuttles, sorters, and conveyors.
It’s undeniable that robotics play a useful role in many of today’s digital commerce experiences – particularly in the warehouse. But the digital commerce industry can’t just throw robots and drones at all of its problems – and one of the biggest challenges facing businesses today is delivery. Delivery processes are typically inefficient, resource intensive, and costly. Drones are often touted as a ‘catch-all’ solution – and they might work for the behemoths of the digital commerce world. But, for the vast majority of businesses, large-scale investments in robots and drones would be one of the biggest mistakes they can make right now. Here’s why.
A high price to pay
Drones and robots have the potential to cut down delivery times and facilitate autonomous deliveries or drop offs to rural and suburban destinations. They can also be useful in manufacturing industries, where drones can help carry out inventory checks or streamline mobility across sites.
But these solutions are a huge money-guzzler. For instance, take Amazon’s drone delivery service, Prime Air. The service will rely upon small drones, capable of carrying up to five pounds of cargo – to be delivered to a customer’s door in 30 minutes or less. But this speed will come at a cost. One package is predicted to cost the marketplace $63 to deliver by 2025.
These overheads can be absorbed by the big players of the digital commerce world, or simply be passed on to their large customer base. But, for most digital commerce businesses, drones and robotics won’t be a necessary part of their strategy. With talk of a recession around the corner, cash reserves are key. Digital commerce businesses should be doing everything they can to arm themselves against economic uncertainty – and this means avoiding unnecessary investments that aren’t likely to offer much payoff for the business.
Turning the problem on its head
Instead of throwing (already limited) resources into drones and robotics, small businesses and new players in the digital commerce industry should turn the delivery problem on its head. It’s not about how the parcel comes to your customer: it’s about how your customer comes to the parcel.
We’re already seeing some retailers taking advantage of collections, saving on delivery costs, and reaping the benefits of the extra footfall into shops. For example, fashion retailer Primark is soon launching its click and collect trial in the run-up to Christmas. The brand has famously eschewed home deliveries completely, so it’s interesting to see them choose collections as an alternative.
Click and collect is already a smart strategy for businesses, but there are ways to make it even smarter. With customisable software, businesses can create click and collect solutions that are tailored to their business and their customers’ needs. For instance, they can group orders into fewer deliveries. Or – in suburban and rural areas – they can deliver multiple packages to a local pickup stop, like a petrol station or library. There are also smarter alternatives to conventional parcel deliveries. For instance, businesses can design software solutions to enable them to rent space in another brand’s delivery van.
However, businesses can only take advantage of these software solutions if they already have a smart commerce platform and a composable approach. To create innovative delivery and collection offerings, businesses must have an up-to-date tech stack that’s agile enough to keep up with new updates and meet the ever-evolving demands of customers.
Back to the future of commerce
Robots and drones will no doubt have a part to play in the future of some digital commerce. These technologies offer unique advantages for fulfilment and manufacturing, and they’ll also be key to the future of IoT and personal shopping devices. But as it stands, robotics and drones simply aren’t accessible enough to be the ‘next big thing’ for digital commerce. They might work for the big names like Amazon and Uber Eats, who can afford to absorb the extortionate cost of drone deliveries in return for speedy deliveries and attention-grabbing headlines. However, smaller players who try to follow in their footsteps will be sabotaging their bottom lines. Instead of throwing resources at robots and drones, innovative businesses should turn the delivery problem on its head and embrace smart software.
Boris Lokschin is co-founder and CEO of Spryker