Key Points:
- The global drone market is currently worth US$14 billion; this figure is estimated to grow to US$43 billion by 2024
- Drone deliveries are expected to increase retail sales by 22% by 2030
- Drones are an environmentally-friendly delivery choice
In its early years, drone technology was mainly used in the fields of security, research, photography, and communication. As this technology advances, more uses come to light. Perhaps the most important new use is in retail delivery. For online retailers, drone package delivery means it has become far easier and faster to deliver orders right to a customer’s doorstep.
In case you didn’t already know, drones are unmanned, autonomous aerial vehicles. For example, you may have heard about the use of drones to deliver medical items in combat zones. Now, as drones become available for the general public, these unmanned aircraft are becoming a very popular commercial delivery method.
The global drone market is currently worth US$14 billion; this figure is estimated to grow to US$43 billion by 2024. The biggest factor in this growth is the adoption of drones in commercial deliveries. Since 2012, more than US$300 million has been invested in drone deliveries. Because of this, drone deliveries are expected to increase retail sales by 22% by 2030.
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What is a Drone Delivery Service?
This involves delivering packages with a UAV (unmanned aerial vehicle) that is remotely controlled. This delivery method is especially useful for small packages. Things like books, documents, medicine, and food items can be delivered with no problem.
As of the publication of this article, there are more than one million drones registered in the US alone. A large number of these are privately owned and flown by photography enthusiasts as well as other hobbyists. Recently, drones have been adopted for deliveries by companies like UPS, Amazon, FedEx, and DHL. The UPS drone delivery service is pretty popular, while those offered by Amazon, FedEx and DHL are taking off.
Currently, small packages being delivered within a small area can be delivered faster, quicker, and at lower costs by using drones instead of trucks. For last-mile fulfillment of packages between 0.5kgs to 8kgs that are being delivered within a 5km radius, the drone is the most effective method of delivery.
How Does Drone Delivery Work?
It’s clear that drones will be a big part of the eCommerce fulfillment process in the future. Many countries are already experiencing the practicality of this method. Over 3,000 packages have already been delivered by drones in Australia. In addition, remote health centers in Ghana have received more than 200 deliveries of medical supplies by drones from an organization in San Francisco.
However, like any new technology, drone-aided delivery systems have challenges as well as great benefits. Much research is being performed to eliminate or minimize problems with deliveries by drone, though it may be some time before all the kinks are ironed out.
Initially, drones were flown by humans via remote control (especially those being used by the military), but pioneers in airborne delivery are aiming for total automation. Automating the process would mitigate the chances of human error. Amazon is an example of this as they are working on a human-free system where the machines are programmed to pick up packages and fly to predefined destinations to make deliveries.
What Are the Benefits of a Drone Delivery Service?
- The biggest advantage is the speed at which packages are delivered. Since drones don’t have to face road traffic and long land routes, drone deliveries are huge time-savers.
- Drones are an environmentally-friendly delivery choice. They run on Li-Po batteries and eliminate the use of degenerative fuels and the creation of carbon emissions. Research is even being done to use hydrogen cells to power drones, which will be even better for the environment.
- You can make significant savings by delivering by drone as it’s often far cheaper than conventional delivery methods. According to Amazon, 86% of the packages they deliver are less than 5lbs; Walmart claims that 70% of American orders are located within a five-mile radius. Put these two facts together, and you quickly create a scenario where drones are the most efficient and affordable delivery options.
- Because delivery is quick and affordable, drones can decrease cart abandonment rates and improve sales figures.
- As drones become a more popular method of local delivery, traffic congestion will be reduced as there will be fewer cars and trucks needed on the road.
What Are the Disadvantages of Drones?
- The biggest drawback of drones is their weight and distance limitations. This type of delivery can only be used for smaller, lighter packages that are delivered over small areas.
- Noise pollution can be an issue. This isn’t a huge issue right now because there aren’t that many drones in use in any given area. But, as drone delivery becomes more common, noise may become a problem that needs to be resolved.
- With this growing delivery method comes new consumer rights issues. At the moment, there are no processes in place for customers to complain about theft or damage with deliveries by drone, a problem that will need to be addressed going forward.
- Local brick and mortar stores may be significantly impacted. If customers know they can order small, everyday items easily and have it quickly delivered to their doorstep, they’re less likely to make trips to their local stores to pick up these products.
- Drones are expensive machines, so building a fleet for deliveries can be an expensive proposition. However, there are now service providers that cater to small businesses wishing to reach local customers.
How Drones Affect Businesses: An eCommerce Gamechanger
Drones are destined to change the future of logistics and eCommerce. Drones give online retailers a fast, affordable, and simple delivery solution that also benefits customers. In fact, drones are expected to increase eCommerce revenue by almost 25% over the next decade and save online retailers some US$50 million in delivery costs.
With deliveries costing less than US$1 and being received in 30 minutes, it’s clear that drones will have a huge impact on eCommerce deliveries. Buyers can feel confident in placing higher-value orders while retailers can take advantage of cheaper delivery rates. As a result, drones can increase impulse purchases. Buyers will love being able to order an item and receive it in less than an hour.
In addition, the growing demand for drone-assisted delivery in eCommerce is forcing significant advancements in technology. Companies that have a stake in the industry are working hard to improve the distance and weight a drone can take in order to make drone deliveries more viable.
What Companies are Already Using Drones for Delivery?
Many companies have already jumped on the bandwagon. In fact, Amazon has been offering drone package delivery for some time now. Others, such as Google, DHL, and UPS have only just started offering dropoff by drones and only in certain countries. To compete with other courier services, an intricate, worldwide network of drones is needed; that, of course, will take a lot of time and effort.
Many companies offer quick deliveries by drones for their eCommerce platforms. However, there are also services that deliver other things - like food and medical supplies - in countries like the US, Australia, New Zealand, China, and the UAE. Some companies that currently deliver with drones are:
- Amazon
- UPS
- FedEx
- Domino’s Pizza
- Ukraine Postal Service
- Flirtey
- Workhorse
- Zomato
- Alibaba
How to Use a Drone Delivery System with Your Online Store
To implement a useful drone-aided delivery system, you’ll have to make sure your eCommerce business has the necessary infrastructure in place. This includes:
- Integrating the customer ordering system with the warehouse ERP.
- Making sure the ERP and drone server are integrated.
- Allow external notifications with the server.
Once you have all these processes in place, your system will work like this:
- The customer places an order on the website.
- The order is transferred to the main server and ERP system.
- The order is packed and dispatched through the drone. Your employee will do this with the help of the drone system and server integration system.
- The ERM system sends this information through the platform to the buyer as the order status.
Drones have GPS and flight computers installed in their software. With this, the drone communicates its location to the server with a timestamp. When the server receives this information, it is passed to the external notification system to send updates to the customer. This way, you and your customer will always know where your delivery is.
The Future of Drone Delivery: Challenges and Opportunities
Airborne delivery is the way forward for the eCommerce industry, especially with the success of the UPS drone delivery service. Although it faces many challenges right now, there are huge opportunities for growth. By allowing for increased orders and lower shipping costs, this method of delivery can lead to significant growth in revenue for online businesses.
If you want to implement this in your small business, you can hire a drone service or invest in your own fleet of drones. Either way, you’ll first need to fulfill the requirements of a proper online retail system that integrates the fulfillment process with the drone system. Should you be able to do this well, you can offer your customers an upgraded, futuristic shopping experience! Check out Easyship to find couriers that can help you with your sky-high delivery aspirations!
