The pressure facing retailers to deliver products with speed and reliability is ever increasing. E-commerce reached all-time records in 2020 and 2021 and that put additional strain on traditional last-mile delivery solutions. To ease pressures, emerging technologies are needed to automate fulfillment and delivery processes.
Furthermore, supply chain delays this holiday season have already slowed orders and put consumer’s expectations in check. For a retailer to process and deliver a parcel in 2021, a lot has to go right. Goods must be sent to a distribution center, packaging must be efficient and cost-effective, and the whole fulfilment and delivery process must be tracked from end-to-end to ensure supply meets demand.
Companies across industry lines have put time and resources into making sure the first and middle miles of the supply chain go as planned, but these steps are inconsequential if last-mile deliveries aren’t made. Thankfully, improvements to automation are happening behind the scenes and retailers will be some of the first to reap the benefits of improved technologies.
Automation is already changing what’s possible in the retail space in a number of ways. Companies are investing in IOT devices to monitor warehouse operations, RFID chips to automate transportation tracking, and improved warehouse management systems that reduce planning efforts.
But to get the full value of these technological improvements, retailers will also need to invest in the last mile of the delivery process.
Last-mile delivery logistics will be solved with automation
No matter the retailer, last-mile delivery goals look very similar to the rest of the supply chain: boost efficiency, reduce costs, and limit manual efforts. All of these facets are targets for automation, but there’s one step in the delivery process that takes priority over all else, that is delivery routing.
Routing last-mile deliveries is incredibly complex and some would argue inefficient by nature. Just a few stops can become unmanageable due to permutations and that’s compounded by traffic conditions, vehicle types, drivers, and delivery preferences. Done by hand, this system is inefficient simply because of the time it takes to plan and optimize a multitude of deliveries.
Traditionally, outbound packages are sent through last-mile giants like FedEx and UPS, but retailers must consider automated solutions that include robotic fulfillment and sorting, driverless vehicles, and even drones.
Across the board, automation takes time and human error out of the equation. It optimizes costs, improves warehousing performance, and streamlines supply chain processes outside of just routing and dispatching.
To get an idea of where last-mile automation is in 2021, consumers will need to think about the three emerging technologies mentioned above (robots, driverless vehicles, and drones) as catalysts for a changing system.
Of the last-mile carriers we’re used to seeing on the road, FedEx recently announced a partnership with Nuro, an autonomous vehicle maker, in an attempt to incorporate driverless vehicles into their lineup. As announced, FedEx will work with Nuro on a multi-year, multi-phase collaborative effort designed to test Nuro’s next-gen autonomous vehicle technology for deliveries in Houston, Texas.
This partnership is largely indicative of a continuous operation to incorporate robotics and automation into FedEx’s last-mile strategy. For Nuro, this is the first time they will see their autonomous technologies used to drive operations at this scale. The company is also working with Domino’s Pizza, who’s Houston customers can now request deliveries made by Nuro’s R2 robot in select locations.
More than anything else, this is good news for retailers who want to capitalize on last-mile automation without having to do the leg work. When carriers like FedEx offer automation at scale, brands won’t need to go out of their way to find independent, potentially more expensive carriers who offer the similar services.
The last 12 months have proven to be consequential when it comes to robotic last-mile technologies. Starship Technologies is largely responsible for this innovation and their delivery numbers have more than quadrupled since the beginning of the pandemic—as they now serve more than a million people around the world.
Chartwells Higher Education, a leader in contract foodservice management, partnered with Starship Technologies this year to bring autonomous food delivery to the University of Nevada’s Reno campus. Moreover, we should expect these small but efficient delivery robots to become a staple on college campuses across the country within the next few years.
In Austin, Texas, the robotics company Refraction AI is using it’s REV-1 robots to deliver food orders from a local pizzeria chain. As of now, the program only consists of 10 REV-1 robots, but Refraction AI hopes to change that with the inclusion of more restaurants, groceries, and retail shops.
Lastly, last-mile automation is not complete without delivery drones. One of the most prominent leaders in the industry is Flytrex, who after getting approval from the Federal Aviation Administration, expanded their delivery program in Fayetteville, North Carolina.
The company made themselves available to local and national retailers as large as Walmart, and are currently able to make deliveries to homes within a mile of these businesses. This puts roughly 2,000 homes in Fayetteville within the service delivery area, but of course Flytrex would like to expand their radius in the coming months and years.
Walmart also partnered with a drone innovator named DroneUp in 2020 to deliver at-home COVID-19 self-collection kits. With more than 10,000 Federal Aviation Administration certified pilots on hand, the partnership demonstrated how deliveries could be made in minutes, not hours or days.
After completing hundreds of deliveries, Walmart has continued their partnership with DroneUp by making an undisclosed investment in the company. But this is just the tip of the iceberg, as it seems Walmart is going the extra mile to carve their way into the drone market while providing their customers with fast and efficient last-mile solutions.
Last-mile automation requires scalability
When retailers consider the perks each of these autonomous last-mile delivery solutions offer, scalability should be at the top of the list. Unlike traditional solutions, robotic systems move and store goods effortlessly.
Last-mile autonomous technologies are made from portale, modular components that can be rearranged or switched out instantaneously. When put to use, these technologies allow distribution and fulfillment centers to operate efficiently in a dynamic e-commerce landscape.
No doubt, the e-commerce boom of 2020 is here to stay and retailers will must find automated solutions that will handle an influx of orders. Companies can stand out against competition if they examine the gaps in their supply chain and make changes where possible.
When drones offer deliveries in minutes instead of days, retailers have a lot to consider when it comes to addressing the needs of their customers.
Retailers will need to learn how to manage automation
Managing all of these autonomous technologies is tricky and customers need to be informed in real-time every step of the delivery process. This is why it’s so important that retailers notify their customers if they’ve got their order in stock, when their parcel is out for delivery, and if the package has made it to their doorstep.
When customers aren’t cued into their parcel’s delivery time, they’re more willing to call customer support with frustration or worry. For retailers, this isn’t just a nuisance. Responding to uninformed customers is time consuming and can take human resources away from more pertinent tasks.
In order to walk customers through the parcel delivery process, autonomous last-mile delivery technologies will need to be tied to well-timed communication strategies. This means deciding which stages of the delivery process require an update, but it also requires retailers leverage their technological upgrades with heightened communication channels.
Last-mile technologies have a long road ahead
No matter how complex the supply chain is, final-mile deliveries are one of the most expensive and time consuming parts of a parcel’s journey. Furthermore, the last mile is key to satisfying the customer and should be a priority over other resource-intensive operations.
Customers rarely want to consider the costs or logistics that go into last-mile deliveries, so it’s up to retailers to maintain quick, accurate, and affordable deliveries across the board.
Automation in this sector may prove to be an effective solution for some, but retailers understand that there’s no one-size-fits-all approach to drone, robotic, or driverless vehicle technology.
Going forward, companies will need to listen to their customers and find scalable solutions suited to their individual needs.