While the idea of drone delivery has often felt like a sci-fi fantasy, e-commerce and delivery companies are working hard to bring this technology to life as quickly as possible.
From Alphabet-owned Wing offering deliveries in the US, Finland, and Australia, to Amazon’s recent drone roll-out in California and Texas, drone delivery is already making its way across several states and countries.
But the question still remains: Could automated drone delivery really be the future of e-commerce?
If so, what obstacles could hinder its success? Will legislation be able to keep up with these rapid technological advancements? And most importantly, what does this mean for the e-commerce industry as a whole?
Here’s what we know so far.
The Future of Drone Delivery
- Common FAQs about drone delivery
- Pros and cons of drone delivery
- Ready to embrace the future of drone delivery?
Common FAQs About Drone Delivery
Let’s start by laying a foundation. In this section, we’re answering some of the most commonly asked questions about drone delivery.
First off, how much of a thing is drone delivery? Are drones the future?
As you might have guessed, drone delivery exists, but it hasn’t fully rolled out to the mainstream just yet.
In the meantime, suppliers are conducting rigorous testing and working hard to make sure their drones live up to Federal Aviation Administration (FAA) and consumer safety standards. As the FAA works to support suppliers by promoting advancement, and suppliers step in to make sure their devices live up to the hype, drones are expected to replace traditional delivery services, or at the very least, become part of hybrid delivery models.
Be on the lookout for brand use cases. Amazon, Walmart, DHL, Google/Wing, Domino’s, and UPS are making tremendous headway in the drone delivery space.
How big is the drone delivery market?
In the last three years, there have been over 660,000 commercial drone deliveries to consumers, according to a recent McKinsey report. The report also estimates that more than 2,000 drone deliveries are occurring every day worldwide.
As the growth rate accelerates each week, it’s estimated that there will be nearly 1.5 million deliveries by the end of the year. This is a staggering increase of over one million deliveries in the span of just one year.
Do consumers want drone delivery?
Consumers are always looking for the fastest, most efficient way to receive their packages.
If they know they can receive a package in 30 minutes or less, their answer to the above question (Do consumers want drone delivery?) is always yes, as long as it doesn’t compromise their values.
But there is some consumer resistance, specifically around safety and privacy issues. We’ll take a closer look at these concerns in the cons section below.
Pros and Cons of Drone Delivery
Though it’s been in the making for nearly a decade, drone delivery still sparks worries among consumers and brands alike. not to mention the additional legal and safety concerns some legislators have.
If you’re feeling skeptical too, you may be asking questions like…
Are we really ready for unmanned aviation to fill our skies? Is it safe and environmentally friendly? Is it practical to expect societal and government adaptation?
We’ll uncover some of the benefits and concerns of drone delivery below.
Pro: Drones provide lightning-fast last-mile deliveries.
As an e-commerce brand, you’re no stranger to the hair-pulling stress that comes from last-mile delivery complications.
In fact, experts like President of Alibaba Cloud Intelligence Jeff Zhang, believe last-mile delivery is currently the most expensive and inefficient part of the entire e-commerce supply chain.
To alleviate this pain point, Alibaba launched a logistics robot for last-mile deliveries back in 2020. And it’s not the only one to do so.
Walmart also swooped in to solve last-mile delivery woes when it partnered with Virginia-based drone startup, DroneUp, in 2021 and announced three delivery hubs in Arkansas.
Tom Walker, CEO of DroneUp said, “Teaming up with Walmart to launch three delivery hubs marks a significant leap forward in the broader use of UAS (unmanned aerial systems) to provide last-mile consumer delivery services and supply chain efficiency operations.”
The service is available from 8 AM to 8 PM daily and delivers items in as little as 30 minutes from the time of order. This is a true testament to the speed and convenience brands and consumers can one day look forward to embracing.
Pro: Drones are central to carbon-reduction strategies.
Could 100% emission-free delivery be the new e-commerce norm? With drones, the future looks promising.
In fact, Smithsonian Magazine found that when drones delivered small packages over short distances, emissions were 23% to 54% lower than that of trucks.
“Delivery bots, RDVs, and drones are set to displace millions of truck and van deliveries over the next decade, as they are far smaller, more flexible, lower in cost, and naturally suitable for automation and electrification.” —Ryan Citron, Senior Research Analyst at Navigant Research
Since they’re fully electric, drones have the potential to be powered by renewable energy, creating emission-free deliveries.
Pro: Drones can deliver medical supplies in rural areas.
With challenging geographical locations, delivering medical supplies in rural areas used to be snail-like or impossible, resulting in devastating consequences.
DHL and other players are moving the needle forward by making rural delivery fast and efficient.
With its Parcelcopter 4.0, DHL has created a life-changing revolution. Tested over a period of six months in eastern Africa, the Parcelcopter delivered medical supplies and pertinent medical results to isolated areas in as little as 40 minutes.
But DHL isn’t stopping there.
“We’re more than convinced that the Parcelcopter has allowed us to create real added value in the field of logistics. In the future, this could take the shape of deliveries of emergency medical supplies or deliveries to regions situated in challenging geographical locations. The parcelcopter arguably allows us to offer people in such areas a new kind of access to the flexible and, most importantly, rapid dispatch and delivery of goods.” —Jürgen Gerdes, former Member of the Management Board of Deutsche Post DHL Group
Con: Drones are not without safety concerns.
Drones have been linked to a few safety concerns due to technical failures during test flights.
According to an FAA incident report obtained by Bloomberg, Amazon’s rigorous drone testing led to five crashes that occurred over four months at its testing site in Pendleton, Oregon, last year.
In June 2021, a drone flipped upside down and dropped 160 feet in the air. This resulted in a fire that spread over 25 acres of land and required assistance from local fire services.
Although Amazon has implemented sense-and-avoid technology, there could still be the risk of failure since its drones have to land when making a delivery.
Wing’s drones, on the other hand, don’t have to land when delivering goods. After arriving at the destination, they slowly drop to a height of seven meters and lower packages down to the ground.
Con: Drones are vulnerable when it comes to privacy and package security issues.
From cyberattack risks to weather complications to unauthorized parcel access, when a machine is in charge of delivering a package, we have concerns about consumer privacy and package security.
Are drone-delivered packages more vulnerable to thieves? Are they damaged more often than regular deliveries? Misdelivered more often?
Drone manufacturers are working to alleviate as many of these concerns as possible by:
- Using smartphone technology to access a package upon delivery
- Designing specific flight missions so drones know exactly where to go
- Restricting flights during inclement weather
While there’s still a risk of cyberattacks or a package ending up in the wrong hands, drone delivery is too new for us to tell how far these risks will go.
Con: Regulation doesn’t always keep up with technology.
Rapidly evolving drone technology coupled with the sheer number of government regulations for commercial flights currently limits drone delivery possibilities.
The biggest question of all is:
Will the FAA be able to keep up with the rate at which drone technology is accelerating?
Without regulatory frameworks in place to support that growth, making drone delivery the new norm will pose a challenge.
To position for success, drone manufacturers should focus on addressing privacy issues, safety concerns, and consumer resistance. From there, they should work to find creative solutions to extend the electric range of delivery drones.
Finding some common ground between the FAA and suppliers can help encourage the drone delivery market to scale safely and sustainably.
Is E-commerce Ready to Embrace the Future of Drone Delivery? Are Merchants?
What used to be fantasy has officially become a reality. Drone delivery technology will continue to expand quickly as brands look for creative ways to solve supply chain challenges.
If you’re ready to embrace the future of drone delivery, consider how you can become part of this new venture. What partnerships could help bring your vision to life? What specific ways could drone delivery help your brand reach new heights?
And when you’re ready, reach out to our team at SellersFunding to learn more about how we can help you profitably scale your brand. With our flexible working capital solutions, even your most audacious growth plans can become totally doable.