Amazon drone delivery will be winging its way to you soon… but it still faces limitations - August 2016

Amazon’s announcement that it is working with the British government to test deliveries via drones represents the beginning of an exciting new era for the way people receive goods, but ultimately it won’t revolutionise the retail industry just yet. This is according to Nick Miller, head of FMCG at global supply chain consultancy Crimson & Co.

With the UK at the forefront of drone technology, Amazon has won special permission from the government to look at the best way to allow hundreds of robotic aircraft to safely navigate British skies. The company claims it’ll eventually mean small parcels can be delivered within 30 minutes of an order being placed.

Nick states that this latest news is further evidence that Amazon is shaking up and driving change amongst the retail industry, but it will take time to recognise its real impact:

‘Amazon has always been about ease of service for the consumer. Clicking on an item online and then having it delivered to your front door took the hassle out of having to leave the house and trudge across the shops on a busy, wet Saturday afternoon. Amazon Prime Now evolved that service to take delivery times down from days to minutes with a one-hour delivery service. The launch of drone deliveries will arguably do the same. One of the biggest bugbears for consumers is stopping in and waiting for a delivery or dealing with the consequences of a missed order. Drone deliveries look to take that pain-point away.

‘From Amazon’s perspective this could prove extreme lucrative – a reliable, affordable and quick means of delivering goods which does away the need of delivery drivers and trucks will be incredibly appealing. From a consumer offering all it will require is a space in your garden to place a landing mat which can receive the goods – it has the potential to be incredibly easy, but it will have limitations.

‘Drone deliveries will have restrictions placed upon it – perishable goods will be unavailable which could prove advantageous to Amazon as it may deter competing technologies from the big supermarket retailers. Also, products over a certain weight, size and value might not be suitable, resulting in the need to still retain traditional delivery services for certain goods. We will likely need to wait 18 months or so before we can truly gauge the success of Amazon’s drones, but this still represents an exciting innovation for both retailers and consumers with potential spin offs for other business ventures.

‘Click & collect is still very prominent amongst both consumers and retailers – with the invention of drone delivery technology it could lead to outdoor space in heavily built up areas and cities becoming a premium. This might lend itself to the Uber model whereby the man on the street can now operate as a licensed taxi – this might take the form of a person renting out a space in their garden for a fee. A garden would then act as a drop off point for people in the street or surrounding areas, which don’t have access to outdoor space in order to collect goods – essentially it is a pop-up distribution centre. Ultimately, this is really encouraging to see a technology discussed so widely start to come to fruition – the next 18 months will be really telling for the retail industry,’ Nick concluded.

 

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