Domino's Pizza and Pizza Hut are blazing a trail for other retailers in autonomous-vehicle delivery, says Ben Conwell, senior managing director of Cushman & Wakefield’s new-commerce advisory group.
“The uniformity of that item [pizza] makes it a worthwhile test bed,” Conwell said at RECon. The pizza chains are working with Ford, Toyota, FedEx and other companies on robotic vehicle development, he noted. “What we’re learning about that technology is going to be incorporated in the coming years for apparel, for home improvement, for a variety of different leaders.”
But the logistics are complex when it comes to creating a system that will meet customer expectations of reliability and speed. In urban areas, robotic vehicles must learn to work around vehicular and pedestrian traffic. The service will also call for distribution centers closer to urban centers, Conwell said.
Ben Conwell, senior managing director of Cushman & Wakefield’s new-commerce advisory group
“That final delivery to a customer’s home or to their office is the biggest share of the delivery cost," said Conwell. "In many markets with most SKUs, it’s greater than 50 percent of the total delivery cost. It’s extremely expensive, it’s very complex to do, and it’s risky.” And it had better be done right, he cautioned, because “it is the last opportunity for a retailer to create an engaging and successful experience with a customer.”
Development is still in the relative early stages, he notes. “As fast as innovation is moving, there are a lot of overly aggressive projections out there from different pundits about how quickly [the use of] autonomous vehicles for retail delivery will arrive,” he said. Flying drones are even more complex, he says. “Drones get all the sexy media; they get all the attention; but, frankly, the technology is so difficult — and [it] has regulatory challenges as well.”
Eventually, drones will be adopted, Conwell concedes, “but it’s just going to take longer.”
By Edmund Mander