What is Drone Delivery?
Drone adoption is growing rapidly among both consumers and companies, and the retail industry is leading the way in that adoption. Drones could serve different purposes for retailers, but drone delivery (which is exactly what it sounds like: products delivered by drone) is the most well-known and readily apparent.
Drone delivery services show enough potential that Amazon, Alphabet, and other tech giants are hailing it as the future of e-commerce fulfillment. Many major retail and logistics companies around the world are testing drone delivery services and drone delivery systems to solve the problem of “last mile” deliveries.
And some companies have already taken the first step…
First Drone Delivery – A Domino’s Pizza
Drone delivery pizza became a reality in November 2016 when Domino’s, with its drone delivery partner Flirtey, dropped off an order at a customer’s door at 11:19 a.m. in Whangaparaoa, New Zealand, 25 km north of Auckland. (If you’re curious, the first pizza drone delivery was an order of a Peri-Peri Chicken Pizza and a Chicken and Cranberry Pizza.)
A team of drone experts and a pilot autonomously controlled Flirtey’s DRU Drone through GPS navigation to drop off the pizzas.
Amazon Experimenting with Drone Delivery
Pizza drone delivery is one thing, but when the largest e-commerce company in the world starts toying with the idea of using UAVs to fulfill orders, that’s another story entirely.
Amazon plans to deliver customers’ orders within 30 minutes through its Prime Air delivery program, which would blow away its two-day Prime shipping and two-hour Prime Now deliveries.
And the benefits would be tangible both for customers and for Amazon itself, which would reap the rewards of reduced drone delivery cost. A 2015 study by ARK Investing Group estimated that drone delivery would cost Amazon less than $1 per shipment. BI Intelligence, Business Insider’s premium research service, estimates that Amazon spent approximately $5.75 on shipping per package in 2016. This price reduction becomes even more beneficial considering Seeking Alpha’s prediction that Amazon drone delivery costs could hit $9.19 per delivery, which would eliminate any savings compared to FedEx or UPS ground shipping.
As a result, Amazon has been trying to get out ahead of the drone delivery market by launching its Prime Air program in 2013. The e-commerce giant tested its first drone deliveries in the U.K. in 2016 with just two customers who lived nearby an Amazon fulfillment center near Cambridge. Amazon has also dropped…