When you envision the future of autonomous delivery, do you imagine an army of drones for every supermarket and corner store, waiting to be deployed to customers’ homes? Noted futurist Oliver Schlake sees a better way.
He sees a future where everyone has a drone.
Schlake, Ph.D. and clinical professor of management and organization at the University of Maryland’s Robert H. Smith School of Business, says homeowners and apartment dwellers will install landing docks at home for their personal drones, and retailers will install corresponding docks. Customers will send their drones to nearby stores, to fetch their orders and bring them back in mere minutes.
Baupost's investment process involves "never-ending" gleaning of facts to help support investment ideas Seth Klarman writes in his end-of-year letter to investors. In the letter, a copy of which ValueWalk has been able to review, the value investor describes the Baupost Group's process to identify ideas and answer the most critical questions about its potential Read More
It’s an evolution that will transform the small-store industry, Schlake told NACS, a convenience-store and fuel-retailing industry group, at a recent gathering. He explained his vision for drone delivery, for the future of the post office, and the development of bespoke gas-station advertising.
“Imagine,” he says in a recent interview, “you pull out your phone and you say ‘I want to have one can of Monster Energy Drink because I’m feeling really tired.’ ”
Amazon offers one-hour delivery service in some urban areas for some items, but it’s not likely that a customer can buy a single energy drink under that service. And, anyway, you don’t want to wait an hour; you want this drink in the next five minutes.
There are 154,000 convenience stores and gas-station stores in the U.S., and most Americans live within a mile of one. For a drone that can travel at 30 miles per hour, it’s a 2-minute journey to the nearest one. So, you place an order with your phone, someone in the store picks up the order, confirms to the drone that the order is ready at a specific landing dock.
The drone lands, clicks into the delivery system and then flies the drink home to its own landing dock, sending a message to your phone to let you know it has arrived. Five minutes, one energy drink.
“Everything I am telling you is possible with current technology,” he says in recent interview. “This isn’t the future. This is the here and now – except the Federal Aviation Administration’s permission for autonomous flight of unmanned aerial vehicles.”
Though, he adds, the Federal Aviation Administration must yet grant permission for autonomous flights of unmanned aerial vehicles.
Schlake says much of what we imagine when we consider drone delivery is probably wrong. Even the big names in the space – Amazon, 7-Eleven and Domino’s Pizza, for example – haven’t hit on the right delivery model, he says. Mercedes Benz is engaged in a research project in which local delivery robots emerge from a Mercedes Benz delivery van that’s parked in a particular neighborhood. And those smaller robots deliver goods to each doorstep. “It’s absolutely crazy. It’s almost like little ants come out of the big ant,” Schlake says.
But the concept doesn’t make financial sense. “They are just born out of ‘Cute, we can do this,’ ” he says. “To deliver to a home is a very special service. This is not how we evolve.”
The evolution, he says, is that consumer drones go to a store and pick it up. “That’s why we have stores,” he says. Drones are expensive. The capital investment involved in amassing, insuring and maintaining a drone delivery army would be untenable for most retailers. And the return on investment would be weak. “How many Monster drinks do you need to deliver before you pay off that drone?” Schlake asks.
“Plus, how does the store drop it off at the houses? Somebody has to just sit there outside? Or you drop it on the lawn like a newspaper on a weekend?”
The next stage in drone development may be the creation of a universal container system, to enable parcels of various sizes to be transported. Meanwhile, at-home docking stations will proliferate as retailers embrace drone delivery.
“It’s like the fax machine. If only one person has a fax machine, it’s useless. As soon as a player emerges and says we are going to deploy this on a large scale, the whole thing becomes interesting,” Schlake says. Pretty soon, real-estate listings will boast about homes that are drone-enabled.
Among the other trends he envisions for the convenience store industry, are these:
A new post office: As the struggling U.S. Postal Service looks to shutter post offices to save money, Schlake says there’s an opportunity for c-stores. Post office services and maybe an Amazon pickup locker in a convenience store could draw new profitable foot traffic.
“I tell people that the next opportunity is never in your industry, it’s outside of your industry,” Schlake says. “And for the convenience industry, well the most inconvenient thing in the world is to have to run to a post office that is about to close.”
Intuitive snacks: Schlake envisions automated gas-station camera systems that would scan customers and their vehicles for physical clues, and, using predictive analytical tools such as IBM’s Watson, display a customized ad on the gas-pump video screen in “eight seconds or less.” Bumper stickers, vanity license plates, even the clothes a person wears would help predict the type of drinks, snacks or sandwiches they’d likely go for.
“Bumper stickers might give away that you have kids, that you are a teacher, that you have cats, that you run marathons, that you don’t run marathons,” Schlake says. “People are very vocal with their bumper stickers.”
Article by Smith Brain Trust