- - LS-E-Commerce for a concise digital Shopping-Experience
- - Reliability, cost and speed are key drivers for the last mile
- - R2 robot from Nuro approved for commercial delivery
Growth in the e-commerce sector has declined from plus 20% in recent years to an estimated growth of 5-8% in the next few years. However, the structural growth story is still intact. But competition will intensify as e-commerce companies fight for limited resources. In this economic climate, two "fundamental" trends will become more important: innovative technologies to attract and retain customers, and more efficient delivery of goods.
In recent years, a new way of shopping online has emerged due to the introduction of high-speed Internet and powerful mobile devices. LS-E-Commerce, which stands for Live and Streaming, - is increasingly being used as a factor to analyze online shopping and the future of digital advertising. LS-E-Commerce was developed in China by Taobao (Alibaba) in 2016 and has expanded beyond the country to the rest of the world in recent years. LS e-commerce content includes streams of merchants and marketers engaging with users to promote various products in real time. Through livestreaming, e-commerce companies are able to introduce a product in detail allowing potential buyers to familiarize themselves with the products. In addition, sellers can answer consumer inquiries live. Companies such as Google, Amazon and Meta are currently investing a lot of time and resources in developing LS e-commerce. These are the first steps on the road to a fully digital shopping experience for customers. In addition to LS e-commerce, we are seeing the use of virtual reality headsets and platforms such as Roblox and Meta.
"Gig" delivery services compete with UPS and FedEx
The second "fundamental" trend in e-commerce concerns the ecosystem of goods delivery to customers. The "last mile" is the shipping of goods from the warehouse to the customer's destination. The standard practice is a cost of USD 8-10 per delivery. This is a bottleneck for the e-commerce industry and is often referred to as the Holy Grail. "Gig" delivery services compete with UPS and FedEx
The second "fundamental" trend in e-commerce concerns the ecosystem of goods delivery to customers. The "last mile" is the shipping of goods from the warehouse to the customer's destination. The standard practice is a cost of USD 8-10 per delivery. This is a bottleneck for the e-commerce industry and is often referred to as the Holy Grail. However, there are some emerging trends from the US. An emerging trend in retail is the use of "gig" delivery services, e.g. DoorDash, Uber, Lyft, Instacart, for last-mile package delivery. The cost of delivery, at around $5 per order, is lower than the fees charged by established national carriers such as UPS and FedEx. In addition, the delivery process is significantly faster and allows for same-day deliveries. In this way, smaller retailers are able to optimize their existing store equipment and inventory. The shift in last-mile delivery from hospitality to consumer goods is a good example, as the vast network of "gig" operators has built the same capability as Amazon, UPS and FedEx. DoorDash had about 100 million non-restaurant deliveries and 1300 million restaurant deliveries in 2021. Gig delivery networks like DoorDash can benefit from increased package volume and route density, with the trend toward lower costs and higher speeds. These solutions have already established themselves at this stage.
The Last Mile has always been about reliability, cost and speed. Additionally, the near future will see automation in the air. Several urban area sare witnessing initiatives of driverless delivery drones that utilize roads and/or pavements as part of the delivery process. Rural areas and the suburbs, with a lower density of houses and flats, have seen a similar trend of developing delivery drones. Both delivery technologies are in the stage of late piloting or early commercialization.
First approval for commercial delivery in California
An autonomous vehicle is capable of driving autonomously from its starting point (warehouse) to a predetermined destination (customer). These vehicles have a map of their surroundings and rely on a variety of sensors, radars and video cameras. Nuro is a small company based in California that aims to improve daily life through robotics, specifically by reducing driving. The solution proposed by Nuro is the R2 robot. It is the first fully autonomous vehicle without occupants to be approved for commercial delivery by the U.S. Department of Transportation. In April 2021, the company partnered with Domino's to autonomously deliver pizza to customers in Houston. Two months later, Nuro launched a partnership with FedEx. Fedex will use the R2 as its new vehicle for last-mile delivery. Nuro is currently mapping Los Angeles as part of a test for autonomous vehicles in the LA region, using its fleet of Prius vehicles. Will 2023 already be the year of the launch in the aforementioned region?
Another well-known delivery company is Starship Technologies. It has partnerships with companies like Mercedes, but is best known for delivering food to university areas. Starship Technologies has already made tens of thousands of autonomous deliveries on university campuses in the U.S. and EU.
Amazon's Zoox family is also among the companies betting on autonomous driving. At the heart of Zoox's autonomous solution is the company's autonomous vehicle for transporting people (Robotaxi). Amazon plans to apply Zoox's findings to the autonomous robots in its warehouses known as Amazon Scout - a self-driving delivery robot.
Emission-free and cheaper deliveries
As one would expect, there are several issues associated with these technological innovations - regulation, privacy, security, noise, etc. However, these services are capable of operating with zero emissions and lowering per-unit delivery costs. In addition, fast deliveries provide a more efficient service to customers. The core definition of disruption is that you will always find lower costs and higher efficiency. In e-retail, contact with customers is becoming more "accessible" as LS technology evolves. This also applies to deliveries, which will experience shorter delivery times and a decisive trend towards automation in the future.