The Covid-19 pandemic seemed ripe for drones to come to the fore.  Not only did e-commerce sales grow considerably, but social distancing requirements meant deploying robot helpers would have been highly desirable.  That our orders were not fulfilled by robotic delivery devices highlights how far we have to go before such a future is realized.

New research from the University of Texas at Dallas suggests there is still considerable potential for the technology however.  Their confidence is based upon the ability for drones to provide short delivery lead times and customizable delivery times.

The researchers focused their attention on the use of customer-facing delivery centers, or the last-mile aspect of logistics.  It’s a step in the chain that they believe drones could transform as retailers strive for ever faster delivery.

The analysis found that both the delivery speed of drones, and the number of last-mile warehouses could increase as drone technology matures.  It’s a process of decentralization that is fundamentally underpinned by progress in the capabilities of the technology.  It also showed that whilst perfect customization of delivery times is likely to be more profitable, retailers can capture a large chunk of this profit by partitioning their customer market into time zones and offering best-possible delivery guarantees within each zone.

“If a retailer promises each customer a different delivery time based on the customer’s location, that would be perfect customization,” the researchers say. “For example, a retailer could give any customer who is one mile away a delivery-time guarantee of five minutes and a customer 1.5 miles away a delivery-time guarantee of seven minutes. While perfect customization is theoretically best for the retailer, it is impractical. Instead, the retailer might offer all customers less than five miles away a guaranteed delivery time of 15 minutes.  In other words, limited customization is good enough.”

Profitable delivery

The researchers argue that faster deliveries mean more profits, because it implies that there is greater demand.  For instance, the faster the delivery, the more likely consumers are to want to order, and this is something they’re confident drones can significantly help with.

This is only likely to occur if it is also accompanied by growth in the number of last-mile warehouses, however.  The researchers explain that in crowded markets where this capacity cannot be realistically expanded, it might mean that retailers have to buffer speeds below capacity.

Another barrier to adoption are the privacy and safety concerns that the nascent technology has still to overcome.  Regulations are still at a very early stage, and public acceptance of a large network of drones flying above busy streets remains largely untested.

“It would be reasonable to assume that drone technology is maturing quickly, and we should see a commercial rollout on a larger scale in the not-too-distant future. The COVID-19 pandemic will perhaps hasten this process,” the researchers argue.

Companies such as Amazon have been exploring drone-based deliveries for a little while, yet even with the clear advantages of this approach during Covid, they have instead been on an enormous recruitment drive of human delivery drivers to meet the growth in demand rather than turn to robotic assistance.

So while the authors believe that that a large scale rollout is imminent, the fact that the perfect conditions for such mass adoption has not heralded such a rollout perhaps hints at the problems for the technology to still overcome.