Sainsda, conversational commerce, and the rise of the delivery robots
By Maia on Thursday, May 10th, 2018
Sainsbury’s and Asda are shacking up – and it’s ruffling some really big feathers
The second and third largest grocers in the UK are joining forces in a £13bn deal that’s sending shockwaves through the entire retail industry.
It’s almost a year since Amazon’s acquisition of Whole Foods, and the merger highlights the fact that the grocery market in the UK has never been more competitive – and that even the largest players in the market aren’t immune to the threat of e-commerce giants. This deal is essentially an Amazon-protection program.
The battleground will be rooted in the last-mile. Alongside the merger, both companies announced a strategic focus on fast local deliveries; Sainsbury’s already offers same day delivery to 40% of the UK population and “Chop Chop” same-hour delivery out of 7 stores in London. We’re going to be watching how Tesco reacts with its Tesco Now proposition; our sense is this is one battle that’s just getting started. Time, perhaps, to sit back, grab some grocery bought popcorn, and watch it unfold.
Drone deliveries are here! For real…
Well, in China at least. Chinese authorities have officially granted the first license for commercial drone deliveries to SF Express, one of the largest couriers in China – second only to China Post.
SF Express plans to use drones to make delivering to rural areas more timely and efficient. Planes transport goods nationwide, large drones deposit them in local warehouses and small drones deliver the last mile. Now that SF Express have done it, we can be sure that JD.com and Cainiao (Alibaba’s logistics arm) will be hot on its tail.
In the UK, Amazon partnered with the government to trial drone delivery back in 2016 and has since opened Prime Air development labs in Cambridge to make 30-minute deliveries via unmanned aerial vehicles (UAV) a reality. Meanwhile, the company filed a patent for their delivery drone beehives – multilevel urban fulfilment centres that accommodate drone take-offs and landings just last year.
So while our Chinese friends receive deliveries via drone today, it’ll be interesting to see if Amazon can pull it off in a city (without parcels falling out of the sky) tomorrow.
Delivery robots are roaming the streets of London
Starship Technologies, a robotics startup based out of London, is making walking on the pavement in south London that much more exciting, and revolutionising last mile delivery in the process. Out of its headquarters in Borough, Starship is stopping pedestrians in their tracks by trialling a fleet of about a dozen robots that carry parcels in their plastic underbellies and deliver to customers within a two to three-mile radius.
Currently, these autonomous ground vehicles (or AGVs for short) are chaperoned by what the company calls “ambassadors.” Despite being fitted with ultrasonic sensors, nine cameras, radar, and GPS, they still aren’t allowed to navigate the streets without a human handler. Southwark borough council (and the City of London in general) has yet to give the green light to AGVs trudging around on their own.
Meanwhile, up in Milton Keynes, a city that aims to establish itself as a tech haven, Starship AGVs run free (at a brisk 4mph). In fact, the company is partnering with the Co-op to deliver groceries there, where customers receive a text message with a link to unlock the robot upon delivery.
What these sightings in Borough suggest is that while a future of fully autonomous deliveries isn’t in the cards for London just yet, it may not too far out either. And if you’re really itching to receive a delivery via AGV now, just head one hour up north. We hear Milton Keynes is lovely this time of year.
Can we discuss conversational commerce?
“Alexa, buy me a new electric can opener!” Vicki Cantrell, Retail Transformation Officer at APTOS, recounted her experience with Alexa while hosting a dinner party in her home at last week’s RBTE conference in London. The next day, a brand new can opener showed up on her doorstep and she didn’t have to browse through a litany of can openers to make a choice. Based on Amazon’s top ratings, Alexa did all the work for her.
Think about that for second, because this is huge. Conversational commerce just flipped e-commerce on its head.
Vicki took no part in choosing which brand of can opener she bought – Alexa did. According to Professor Scott Galloway from NYU’s Stern School of Business, this has become a pattern – he’s seen a significant reduction in the use of brand names to make orders online. So from now on, Google Home or Amazon Alexa will be making purchasing choices on behalf of the consumer.
This has major implications for brands and retailers alike. Brands lose the ability to distinguish themselves through their visual identity; you’re unlikely to specify Lurpak when all you need is butter. And retailers will need to completely rethink their operating models – in the not too distant future, it could be Tesco’s seamless voice-enabled delivery experience driving shareholder value rather than its physical footprint. An interesting thought…
Podcast: Moving Urban Logistics Forward
This three-part podcast series explores how forward-looking businesses are reimagining the movement of goods in a city. And while at first, you may think that it’s not a really big deal, think again.
New forms of delivery not only will change the way interact with the goods we buy and the businesses we buy them from, but it’ll also change how we pay for things, how businesses provide value to the customers, and how we live our everyday lives.