CeMAT Insider

Amazon is serious about drone delivery, so how will it change retail?

Posted by CeMAT Team on 16-Aug-2016 17:01:07


It’s not new that highways in the sky will soon be an incredible force in our automated logistics future, but as with everything, the devil is in the detail.

This is a story of the not too distant future, when transformative modern technology converges with the winding roads of dense major cities, and for now it’s brought to us by Amazon.

CeMAT-Insider-quote-17.pngThe logisitics giant recently showed off their prototype delivery drone, and it’s since made international headlines in major publications including the New York Times, the Telegraph in the UK, Popular Science, and even Geek Wire.

The coverage isn’t much adieu about nothing, Amazon is serious about leading the world and it’s starting to plump up it’s delivery capacity. The US based retailer is used to kicking down goal posts when it comes to improving the efficiency of their supply chain but it’s latest target is perfecting the drone.



Jeremy Clarkson refers to the Prime Air as “a miracle of modern technology” and it really is quite spectacular.

The state of the art drone can rise vertically to nearly 400 feet, and then readjust it’s route to horizontal air travel. The in-built software helps the drone navigate the sky and to avoid obstacles (i.e. other Prime Airs), and it has an in-built camera to scan the landing area for potential hazards.

CeMAT-Insider-quote-18.pngIn time there will be a whole range of drones with different kinds for different purposes. 90% of Amazon’s inventory weighs below 2.25kg, so they won’t have any issues when it comes to the speedy delivery of customers impulse purchases.

No one can really say for certain what the drone creating retailer plans for the future, but it could easily be said that drones aren’t intended to be a replacement for 3rd party logistics providers. It’s most likely that they will have a deep logistics network to cater to the varying needs of customers and their location.

Or they might be planning on combining their robot-manned warehouses and driverless cars with drones, so that they have a fully automated supply chain in the air and on the road. The point is though, drone delivery, once properly regulated, will save Amazon time and money while also increasing their capacity and efficiency. 

According to the New York Times, the successful deployment of the Prime Air will have serious implications to the retail sector and its competitors. Writer Farhad Manjoo states:

“A decade from now, drones would reduce the unit cost of each Amazon delivery by about half, analysts at Deutsche Bank projected in a recent research report. If that happens, the economic threat to competitors would be punishing — “retail stores would cease to exist,” Deutsche’s analysts suggested, and we would live in a world more like that of “The Jetsons” than our own.“

CeMAT-Insider-quote-19.pngSo will drone technology really overtake retail? Playing into the modern era of instant gratification, they will soon be offering customer order fulfilment within half an hour. That saves the time traveling to and from a location to buy it.

Analysts have stated that the ease with which consumers can purchase and receive their goods will render retail stores redundant. However, drones can also be used within the warehouse to speed up the picking and packing process.

The retail great hasn’t stated very much about how they intend to use the drones but they’ve opened international discussion about regulating drone delivery, and the UK in particular is keen to implement the technology.

Australia Post is also keen on using drone technology to help support eCommerce, however, with a lag in regulation and the technology still being in a trial phase, we’re not sure how long it will be until Australian businesses can benefit from these changes.

Do you think drone delivery will be the end of the brick-and-mortar store? Or is drone delivery just another piece in the supply chain and logistics puzzle? Comment below to let us know your thoughts.

Topics: Supply Chain Management, Logistics Automation