How soon do you need a refill box or a new head for your electric toothbrush? How about an hour from now, or maybe 30 minutes?
Using space or drones, the retail industry is spending a lot of money on last-minute trips, even if the prospect of a return on investment seems bleak.
The latest development comes from Amazon, which has two-day delivery and next-day delivery for Prime subscribers. Now the company plans to aggressively expand its new, same-day delivery service. Over the past three years, Amazon has been building a network of small warehouses designed to fulfill orders for immediate delivery. According to a recent report in the Wall Street Journalabout 45 smaller sites are active, and another 100 or so are planned.
Target also made news recently, saying it plans to invest $100 million over the next three years to expand its next-day delivery capabilities. Unlike Amazon, Target (like its brick-and-mortar competitor) has thousands of stores that it has been using as a distribution center.
The target has been getting high marks for click-and-collect. The company told analysts in November that online ordering now makes up a large portion of Target’s sales (20% in the third quarter of 2022), with stores handling about 95% of fulfillment.
Similarly, Walmart told analysts last month that its store sales nearly tripled over the past two years to $1 billion a month. Over 3,900 US locations offer same day delivery.
All of this is good for consumers. For retailers, however, the last mile is proving to be the longest and most expensive. A is often mentioned learning based on a survey of retailers in 2018 found that last mile shipping costs about $ 10.10 per package, while the customer only takes $ 8.08.
Bringg, a business solutions provider, reported that their survey of 500 US and related managers found that nearly 90% “are struggling with their end-to-end tasks.”
Ten years ago, Amazon’s Jeff Bezos made the world laugh 60 minutes talking about an interesting solution – a group of delivery drones that can fly packages to customers’ homes in half an hour. Bezos has confidently predicted that deliveries will be made by drone by 2018 or so. Critics said that the predictions were false.
A Bloomberg research report a year ago concluded that after throwing $2 billion into the project with a team of more than 1,000 people, “Amazon is a long way from launching a drone delivery service.” It was finally launched in January this year. In the first month, it served at least 10 homes, according to detailed report on TheVerge.com.
Walmart has been improving its drone program, which offers 20,000 items that can be flown from 36 of its US stores. The company report soon that it delivered more than 6,000 drone deliveries last year, with favorite items including cookies, rotisserie chicken, energy drinks, and paper towels.
The barriers to the proliferation of consumer goods and drones strike an average person like me as insurmountable. There are spiders of authority from the FAA to your local hall. There are security issues. What about privacy? They didn’t even mention how your neighbors might feel about the noise in your neighborhood.
So, what do consumers think? According to Morning Consult research, 57% of adults said they had little or no confidence in delivery drones. The cost of drone work is, at this stage of development, incredible.
McKinsey & Co. in the near future that “laws in many countries and territories state that people can operate and monitor one drone at a time.” McKinsey estimates that one drone delivery package (with a weight limit of 10 pounds) has an operating cost of about $13.50… per box of cookies?
Will we be talking about same-day delivery in 10 years? Will the sky be black on Thanksgiving with drones delivering ingredients we forgot to pick up for dinner? Who knows? What about ice bunnies falling from the sky?
What I am confident in saying is that people still love to go shopping. As Kamau Witherspoon, CEO of Target-owned Shipt, recently saidwhen it comes to successful resale, you need a wide range of options, including “store brands.”