By Drone ... Robot ... Driverless Car

In April, the Federal Aviation Administration (FAA) cleared Google’s Project Wing to begin operating in the United States, awarding the autonomous drone delivery service with an “Air Carrier Certification.” It’s a major step for the use of drones but also for the legitimization of autonomous delivery as a whole – as the retail industry continues to explore meaningful tests around drones, last-mile robots and autonomous cars.A 2016 study by McKinsey & Co. on the future of delivery predicts a world where nearly 80% of global deliveries will be automated. The report sees governments continuing to approve and adopt regulations around autonomous vehicles in the next 10 years, and public sentiment is increasing. (At the time of the report, 60% of consumers surveyed were already in favor.)“Autonomous delivery is one of the core emerging technologies in retail today,” according to Bryce Paden, co-founder of i2i Labs, an agency that researches and commercializes tech for consumer goods clients. “The entire retail ecosystem revolves around the supply chain, and delivery tech is changing the way that chain functions.”Sterling Hawkins, co-founder of CART, the Center for Advancing Retail & Technology, a platform that connects brands and retailers with emerging technology solutions, says that automated delivery could be transformational for the industry, reducing delivery costs by 80% to 90% compared to a human doing it, depending on the vehicle and the platform.Various tests are underway in the United States, but despite the optimism, retailers seem to be in a learning period and far from rolling out autonomous delivery vehicles at scale. Nick Jones, Geometry’s chief growth officer, goes as far as to say that the industry’s “at the experimental stage, with most of the activity very much in the ‘publicity stunt’ phase.”Ethan Goodman, senior vice president of innovation at The Mars Agency, echoes that it’s the early days, saying they’re gaining a foundational understanding of autonomous delivery for clients, but the conversation will ramp up soon because CPGs need to adjust packaging, pack sizes and assortment for different delivery vehicles.“I think what it really boils down to is whether or not these new delivery mechanisms can make online grocery or online product delivery better, faster, cheaper, more reliable,” he says. “If it’s drones, great. Self-driving cars, great. Bots, great. But if it happens to be the same guy delivering their groceries today, and the retailers and these third parties figure out how to do that really cheap, then that’s what’s going to matter.”Last-Mile BotsTo categorize the delivery options, the simplest way is to look at them in three parts: drones delivering packages by air, last-mile robots that roam sidewalks and deliver to homes or apartments during that “last mile,” and autonomous cars for the road (including standard self-driving cars by the likes of Toyota, BMW, Ford, Chevrolet and others, as well as unique bot-like vans and prototypes from companies such as Nuro and Robomart).A few of the lead retailer examples include Walmart testing autonomous car delivery with Ford, Waymo and Udelv; Kroger testing autonomous car delivery with Nuro; Ahold’s Stop & Shop working with Robomart on an autonomous convenience store on wheels; and FedEx testing a sidewalk, last-mile robot for same-day deliveries with AutoZone, Lowe’s, Pizza Hut, Target, Walgreens and Walmart. (See sidebar on page 71 for a larger list of notable autonomous tests.)According to Brian Philips, president and CEO of FedEx Office, the FedEx SameDay Bot, as it’s named, is currently a prototype that is being tested and refined. It is designed to deliver goods that FedEx traditionally doesn’t deliver, such as pizzas, auto parts and prescriptions. It will be in test this summer in Memphis and parts of Texas.Hawkins of CART says a last-mile bot is limited by distance and how much it can carry. Delivering in tough weather could be an issue, too, but Philips says the battery-powered bot “is built to negotiate curbs, unpaved surfaces, tight turns, even small flights of steps to the front porch, operate in inclement weather conditions, and features gyroscopic technology to keep cargo level at all times.”Amazon is testing a last-mile bot called Scout, and Postmates has a roving bot called Serve. Starship, a leading bot company, partnered with Sodexo and has been delivering food on college campuses such as Northern Arizona University and George Mason University.Goodman of The Mars Agency likes the idea of the last-mile rover to work as an assistant to a human delivery driver. For example, as a driver looks to park his truck, the driver can put the bot on the sidewalk to begin deliveries. Or, while he delivers packages to one house, the bot can roam and deliver to others.Paden says i2i Labs sees last-mile robots, or “ground drones” as he refers to them, as having the most potential in the short term. “Many municipalities are already adapting regulation for ground drones. While the technology is not widespread yet, it is real, today.” Paden has viewed Starship in test at the University of Arkansas.Autonomous CarsAs for self-driving cars and autonomous road vehicles, these machines can go longer distances and carry larger loads, but they have challenges of their own, notably risk. “The industry has realized that autonomous vehicle technology development was more difficult than planned and, combined with high-profile crashes by Uber and Tesla, that meant significant market launch plans were pushed later into the 2020 decade,” says Kevin Jost, editorial director of Autonomous Vehicle Technology, a print and digital publication that debuted March 2017.Paden says “autonomous cars and trucks will have a definite place in our future, but they are further out simply due to the number of factors that go into the adoption of the technology – things like government regulation, infrastructure changes, public perception and more.”Walmart’s tests currently include human drivers for safety reasons but also to get an understanding and learning of how the technology works. Udelv, a partner of Walmart’s, won a startup pitch event held by CART and is running a small test with the retailer in Surprise, Arizona. The cargo vans tote up to 32 different customer orders and top out at 60 miles per hour. Kroger has completed a larger test with the company Nuro in Scottsdale, Arizona, and is expanding to Houston. That vehicle includes safety drivers and drives only as fast as 25 mph.Jennifer Brogan, director of external communications and community relations at Stop & Shop, says the test with Robomart is unique because it isn’t a delivery service but a service that brings the Stop & Shop store to the customers’ doorsteps. “Customers get to shop, not just receive a delivery.”The Robomart vehicle is expected to test in Boston but Brogan says details are still being worked out. The vehicle from San Francisco-based Robomart never carries a driver or passenger, is low speed and electric, and never goes on the highway, only operating in neighborhoods. There are no drivers in the vehicle but it is “remotely piloted from a facility to ensure safety for pedestrians and other drivers while the vehicle is on the road,” Brogan says.Consumers use a corresponding Robomart mobile app to summon a vehicle to a location, use the app to unlock the vehicle, select their products inside and then close the doors. The vehicle then goes on its way. When shopping inside the vehicle, RFID and computer vision technology record what a shopper chooses and automatically charges the credit card linked to the mobile app.Goodman says using self-driving cars to transport people as opposed to product seems further out because of the regulatory and safety hurdles to get over. Nevertheless, Daimler, Fiat-Chrysler, BMW, GM, Ford, Toyota, Honda, Renault-Nissan, Volvo, Hyundai and Tesla all have self-driving cars in the works.DronesGoogle’s breakthrough as the first to gain approval from the FAA sets it up nicely to lead the way in the drones category, but the logistics of drone delivery limit items in weight (5 pounds or less) and distance (around 13 miles or less), as well as how to land items safely. Paden is most enthused by the idea of drones delivering medication or medical supplies to remote areas, such as what a company called Zipline is doing, and UPS recently delivered blood samples via its drone service.Domino’s first tested pizza delivery by drone back in 2016 in New Zealand, and Amazon expects to deliver packages via its Prime Air drone within the next few years. The vehicles cannot fly above 400 feet and expect to excel at delivering goods to rural areas or tough-to-get places, enabling them to fill a distinct delivery role.Jones believes, in the next five years, autonomous delivery will focus on two exiting distribution challenges at either end of the spectrum: delivery to remote locations and delivery to densely populated locations. “The succeeding five years after that will see these technologies gradually become more and more mainstream and for general delivery.”In the short term, there are roadblocks to overcome, from government regulation, to gaining consumer trust, to cost and logistics of deploying the services, to further advances in technology. “We need nationwide 5G access to handle the on-vehicle data transfer, and we need continued sensor refinement as there is industry disagreement on which sensors are needed and safest,” Paden says.Hawkins says the various autonomous delivery vehicles will evolve alongside the changing face of brick-and-mortar stores that are becoming more experiential. “They start to shape each other,” he says. “It will be really cool to see.”Paden says, ultimately, autonomous delivery vehicles will work in tandem throughout the supply chain. Robotic totes moving product in distribution centers, for example, autonomous trucks transporting goods, short-haul road-based autonomous vehicles delivering regionally, drones delivering to rural areas, and last-mile bots delivering to dorms or apartments.“Our future is filled with deliveries coming via multiple form factors,” he says.

By Drone ... Robot ... Driverless Car

P2PI MEMBERS

JOIN P2PI

Company

Market Segment