Ever-speedier deliveries and home deliveries are the disruptive factor for competition in the retail sector. Well, it all seems pretty clear so far. But then the consequences for everyday life and on cities need to be considered. And these are still not that clear yet.
The delivery war in America is charging ahead, especially now that retailers are snapping up logistics firms. And this is where the current panorama gets interesting and full of clues for the short- or long-term future of the global market.
According to KPMG, a million delivery robots could invade the streets of America by 2040. The lower cost of delivery brought about by autonomous delivery vehicles could halve the number of shopping trips made by consumers.
Would they really reduce traffic or merely change the type of vehicles on the road? We shouldn’t underestimate the possibility of a new type of congestion caused by on-demand deliveries.
According to Gary Silberg, KPMG's Automotive sector leader, “The number of bots needed to service such deliveries will be impressively large. There may well be vehicles that pool such orders, but to meet that level of urgency, they will not carry many packages to many customers.”
Timing and quantities
Bots must travel from the store or delivery centre to the consumer and return, and they will likely not move fast since they will need to unload at homes, perhaps navigating obstacles on pavements.
As a result, only a significant number of these vehicles can meet the totality of consumer demand for the same-hour delivery market. The rise of these on-demand delivery methods will become standard for consumers in the near future.
Most of the bots will be used for these type of deliveries, but the number of items in each order needs to be managed. So more deliveries with different response times for same-day or next-day delivery.
Slower delivery times
Retailer will focus on policies to disincentivise the “all and now” phenomenon with more flexible delivery options. Amazon already offers Prime Now credit to customers who choose no-rush shipping for their purchases. A pivotal factor in managing the on-demand service is how well the physical shipping points are organised.
KPMG predicts we will have “islands” at strategic points throughout the local area. These are needed to ensure the demanded delivery times and costs of the digital support infrastructure are met. Therefore the places need to be locations with a sufficiently higher enough population density to justify the service.