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Crowdsourcing, Drones and Why I’ll Never Buy a Bugatti

crowdsourcing

Crowdsourcing, Drones and Why I’ll Never Buy a Bugatti

Amazon has taught me I don’t have to wait for my next two-pack of ravioli cutter stamps, so if you can’t get them to me in under two hours, I know someone else who can. It’s 2019, and customers want what they want, when they want it. According to a recent report, the global last-mile market is now expected to hit $55.2 billion by 2025, up from $30.2 billion today – and it’s no wonder. Amazon’s deep investments in delivery continue to fuel a surge in e-commerce; meanwhile, customer expectations and the entire supply chain have been completely upended.

The good news is that the more retailers invest in delivery, the more their e-commerce revenue grows. For businesses who’ve made supply chain a top priority, it’s huge validation.

So where does that leave us in the race to the doorstep? Companies are throwing cash at everything, from drones to self-driving robots to crowdsourcing. Who’s got the best chance of success? How can each one lower costs, increase speed and mitigate risks? Can they disrupt the industry without being, well… disruptive?

Drones: The droids you’re looking for?

Drones entered the mainstream about five years ago as a cool photography gadget. Thanks to falling prices, they’re a hot item on every kid’s Christmas list this year, but they’ve also generated a lot of buzz about their potential applications for logistics.

In rural areas, drones have huge promise for parcel delivery. They’re already supplementing human workers in large warehouses – flying to far-flung corners to pick goods on high-up shelves. And they’re working out in the freight yard, too, helping to track and manage trucks, trailers and containers.

Companies like UPS, Amazon, Google and even Dominos are experimenting with drones in the last mile. One popular model uses a carrier van on the highway as a hub for an armada of drones that fly out of the back to deliver small parcels to nearby homes. It’s an impressive, futuristic version of hub and spoke. Can it work? At what cost?

Just like commercial aviation and the automobile, drones have major hurdles to navigate, especially when we think about how they’ll work at scale. We’ll need major regulatory oversight to address safety, noise and privacy concerns. We’ll need to build control towers, write better algorithms, improve GPS, and figure out what to do about the weather. But these challenges will likely all be worked out, given enough in time and investment.

Autonomous vehicles and robots: Bots with brains.

What about autonomous cars and robots? Are they more viable in the near term?

McKinsey predicts autonomous vehicles could slash last-mile delivery costs in urban areas by as much as 40 percent. And companies from FedEx to Bosch have made bets on sidewalk delivery bots, deploying prototypes in San Francisco office parks, where they’re tightly controlled.  Long-term, the potential is clear, and companies with the deep pockets to make early bets could save a lot of money in the long run.

Both autonomous cars and bots cost thousands of dollars per unit to manufacture, though, and depend heavily on human supervision and maintenance. When it comes to flexibility and scalability, is a sidewalk droid really that different from a truck? Both are rigid, asset-heavy systems that require a big capex investment upfront with even higher maintenance and upgrade costs over time.

Think of it this way: earlier this year, actor and comedian Tracy Morgan from Saturday Night Live and 30 Rock bought himself a sweet new supercar: a Bugatti. He forked out a cool $2 million for it. But later that day, he was sideswiped by a driver in a Honda CR-V. It was just a minor fender-bender, but it turns out fixing a scratch on a Bugatti costs more than the entire value of the car that hit him – somewhere to the tune of $32,000.

The truth is, even if I had the cash to buy a Bugatti, I could never afford to maintain it. Will a fleet of delivery droids be the same?

Whether it’s drones or robots or some other yet-to-emerge autonomous technology, asset-heavy logistics strategies will always suffer from the same Achilles heel: whether it’s changing wiper blades or switching from lithium batteries to solar – hardware is expensive. And if a new hardware solution can’t solve for the demands of flexibility in the last mile, there will still be a need for something that can.

This doesn’t even take into account all the regulatory hurdles, infrastructure dependencies and real-world obstacles from bikes to baby strollers, pranksters to potholes, larcenists to labor unions.

But what folks aren’t talking about, and what I find most interesting, is the inherent limitations that come with any fixed-asset system.

Drones and robots may well be efficient, and hopefully one day safer. But what happens when a last-minute order comes in and the customer needs delivery now? How do you adjust a pre-planned droid route at the last minute – when the droid has already left the store?

Crowdsourcing: Using an infrastructure that’s already there.

Robots may well be our future, but how do we solve the delivery challenges we have today? That’s where crowdsourcing comes in.

Crowdsourcing lets retailers leverage existing resources already on the road to make delivery faster, more efficient and more flexible. While others are making big bets on drones, our Roadie drivers are delivering gigantic garden gnomes. We’re delivering temperature-controlled medicine that won’t be ready for pickup until 9 p.m. We’re working with Walmart to save busy parents a trip to buy groceries. We’re returning your lost luggage from the airport, and bringing you the ladder you bought online at The Home Depot this morning.

Some of the biggest brands in retail are investing in crowdsourcing. Today, we’re partnering with SMBs and Fortune 100 retailers to deliver everything from makeup to mattresses, paint to puppy food. Businesses across virtually every industry are solving today’s delivery challenges with an asset-light strategy that allows them to experiment and learn. They’re addressing delivery demand today, without making new capital investments or locking themselves into a futures bet with complex hardware systems. And most importantly, they’re not disrupting their existing supply chain in a way that can’t be undone without a huge cost if and when the autonomous tech winners begin to emerge over the next decade or two.

And that’s really the point. Retailers need optionality. Customers want to personalize their delivery for each and every purchase at the point of sale. A great customer experience means having a delivery solution for every customer delivery problem, whether you’re scheduling a sofa delivery on Sunday or sending a rescue inhaler right now. Making that work in the real world means having an arsenal of tools in your delivery toolkit.

We’re solving the problems retailers are having today, at scale – not iterating on solutions that may work at a required scale years in the future. Crowdsourcing is a sustainable solution that ensures we’ll all be around to see what delivery looks like in the future.

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Marc Gorlin is the Founder and CEO of Roadie, a crowdsourced delivery service that works with consumers, small businesses and national companies across virtually every industry to provide a faster, cheaper, more scalable solution for scheduled, same-day and urgent delivery. With over 150,000 verified drivers, Roadie covers 89% of U.S. households — the largest local same-day delivery footprint in the nation.

delivery

The Advent of Smart Vehicles & Drones in Delivery

Consumers will almost always pick the company that delivers faster. Having the most efficient supply chain is now, more than ever, the key differentiator that sets companies apart from their competitors. But more than this, companies that can predict behavior are the ones that will stand out ahead of the pack.

Since the early 2000s, logistics, freight, delivery and service companies have been outfitting their fleets with GPS tracking systems to monitor the location, movement and status of their fleets. For many companies, GPS tracking is where logistics technology begins and ends, with businesses investing thousands of dollars into monitoring their vehicles and reacting to ‘what happened’. But companies that are positioning themselves for the future recognize that the real value lies not in just determining what happened, but rather in using data obtained through intelligent logistics solutions to predict future scenarios, mitigate risks and avoid adverse outcomes altogether.

By accessing data in real-time through internet of things (IoT) technology, businesses can anticipate their customers’ needs and desires before they do, enabling them to deploy resources more strategically and sharpening their competitive edge. Using the real-time data collected, which helps identify where to trim the fat or drop what’s not working, companies are now able to make quicker, bolder and more informed business decisions. And beyond helping companies streamline their logistical processes and distribution networks, IoT technology is also driving their expansion into new untapped markets with the advent of smart vehicles and drones.

Using smart vehicles and drones to expedite delivery

One of the key – and arguably most important – innovations in intelligent logistics is the development of the delivery drone. The immediate and obvious benefit of drones is faster delivery, enabling consumers to speedily receive products from vendors like Amazon, Sam’s Club and Whole Foods. Drones allow for expedited deployments; waiting for trucks to dispatch takes significantly longer. However, even more important is the impact drones are making on reaching developing societies that, up to now, have missed out on decades of infrastructure development.

Drones using IoT technology are connecting developing countries with limited infrastructure to the global village, thus enabling them to participate in the global economy. This is opening new markets for business that were previously closed to them in the past.

Smart logistics in vehicle fleet management

Delivery vehicles that get caught in traffic or take convoluted routes to their locations can cost businesses hours of lost productivity. But by using Real-Time Location System (RTLS) technology, IoT devices allow businesses to easily and precisely track driver locations.

Smart trucks that implement IoT tech do more than ensuring the driver is on task, on time and performing safely at optimum levels. IoT devices are also enabling businesses and their delivery fleets to gather even more valuable data, such as identifying the fastest route to avoid traffic, knowing when the trailer is unhitched or when the recipient has opened a dispatched package. Companies like McDonald’s are experimenting with delivery trucks that can map the fastest and most efficient routes on their own, thereby reducing emissions and speeding up delivery.

Drivers, too, benefit from IoT tech in their vehicles. Smart logistics tech can also monitor the environment on all four sides of a vehicle, which helps prevent costly mistakes and accidents.

By leveraging IoT technology, companies can now execute every step of the delivery process on-site. For a happy ending, wireless sensors notify companies when the order was opened, allowing company representatives to ‘wow’ customers with a text alert saying, “did you enjoy the product?”

Driverless vehicles: how can they help me?

Back in 2017, an English online grocery chain named Ocado released a self-driving delivery truck into the backstreets of London. The little truck was accompanied by two human monitors and delivered goods to London residents over the course of ten days, all by using its onboard IoT mapping software.

Ocado’s mini-truck was unable to carry as much cargo as its bigger, 18-wheeler brothers, but it did arrive at customer houses faster and with less hassle than larger vehicles could have. Online buyers, meanwhile, could use Ocado’s smartphone app to track their delivery and receive updates right as the Ocado van pulled up to their place of residence.

The Ocado van was the first in a continuing development of vehicles that can deliver goods quicker than traditional freighters, with more cost savings. Additionally, autonomous delivery vehicles can be scaled up more quickly; it’s easier to fit 20 small vans on the streets versus 20 diesel trucks.

IoT technology is future-proofing businesses for long-term returns

To today’s businesses, with the advent of smart vehicles and drones integrating IoT tech into supply chains may seem costly or even risky. But its striking long-term benefits and savings far outweigh the initial costs. Companies deploying intelligent logistics technologies within their fleets have fewer safety concerns, less staff compensation claims and more satisfied customers. With an eye on the long game, smart companies are employing IoT solutions to go beyond merely being ‘good’ at logistics: by mining IoT data, they’re investing in long-term returns for their businesses.

Gregg Abbate is the iLogistics key account manager of Advantech.

Giving Customers Choice: The Power of Personalized Delivery in the Age of Amazon

The past five years have paved the way for a new age of retail — where stores have become omnichannel-driven showrooms, checkout has become as simple as a flick of the phone, and teeming competition has driven retailers to create curated experiences for their customers. 

Most fingers point at the e-commerce giants, Amazon in particular, for putting pressure on brick-and-mortar stores to compete on convenience and personalization. Particularly around delivery, Amazon changed the game with two-day shipping for Prime members. As retailers have fought back by leveraging their physical footprints to improve fulfillment times with offerings like click and collect, Amazon upped the ante with one-day delivery. 

There’s no doubt about one thing: increasing consumer demand for convenience is as important as it’s ever been. The focus has been on enabling same- and next-day delivery, but that’s also been putting retailers under enormous strain and compressing already thin margins. 

If you’re solely focused on matching Amazon’s one-day shipping promise, you’re missing the bigger picture. Consumers want more than same-day, next-day, or scheduled deliveries – they want the freedom to choose

There’s no one-size-fits-all solution. Capgemini found that 73% of consumers think receiving a delivery in a convenient time slot is more important than receiving it quickly. It ultimately comes down to a question of time vs. money. Sometimes customers are willing to pay for something to be delivered in a few hours, and sometimes they’d rather save money and receive it in a week.

Instead of focusing on keeping up with Amazon’s expedited shipping, retailers need to focus on building better customer experiences. From a delivery standpoint, this means creating a logistics infrastructure that can reliably deliver orders when buyers want them delivered. This is accomplished by leveraging multiple delivery models and creating a reliable set of options that includes urgent, same-day, next-day, and more. 

For retailers determined to stay competitive, partnering with innovative providers for home delivery and last-mile logistics can add optionality while avoiding the challenges of building out owned asset networks or expanding service with traditional parcel networks.  

The bottom line is this: consumers want what they want, when they want it. The maturation of e-commerce has ushered in an era of personalization at scale and growing customer demand for convenient, flexible shopping experiences. Next-day and same-day delivery sit at the center, but customers are ultimately focused on choosing the right fulfillment option for each and every order.

Otherwise, they’ll leave and find the retailer who can. 

Will Walker is the Enterprise Manager at Roadie, the first on-the-way delivery service that connects people and businesses that have items to send with drivers already heading in the right direction. Roadie works with top retailers, airlines, and grocers for a faster, more efficient, and more scalable solution for same-day and last-mile deliveries nationwide. With over 120,000 drivers, the company has delivered to more than 11,000 cities and towns nationwide — a larger footprint than Amazon Prime.

ENTREPRENEURS

ENTREPRENEURS ALLEGE AMAZON’S “UNSCRUPULOUS BUSINESS PRACTICES” FORCED CLOSED BUSINESSES

A group of companies in Los Angeles and surrounding areas that were part of Amazon’s Delivery Service Partner Program are suing the e-commerce giant, it was announced Aug. 5. 

Plaintiffs the Hubper Group Companies and their affiliates allege Breach of the Covenant of Good Faith and Fair Dealing, Breach of Implied Contract, Estoppel, Fraudulent Concealment, Unfair Business Practices and Intentional Interference with Business Relationship in the complaint filed in the Superior Court of Los Angeles by the Newport Beach, California-based law firm WHGC, P.L.C. 

They seek an unspecified amount in compensatory damages, disgorgement, plus exemplary and punitive damages from Amazon Logistics, which is accused of “wrongfully and without cause” terminating the plaintiffs’ Delivery Service Partner relationship this past April. That was after the Hubper Group Companies claims to have invested about $4.5 million into continuing its exclusive operations for Amazon, which included employing about 600 people to deliver good from nine stations covering 300 routes. 

Further, once Hubper Group Companies was put out of business, Amazon contacted the plaintiffs’ former drivers, offering employment as independent contractors utilizing the same delivery routes, according to the lawsuit.

“This is a clear-cut story of a corporate giant knowingly and deceitfully putting a group of local entrepreneurs out of business,” says a member of the plaintiffs’ legal team. “Amazon Logistics convinced these hard-working entrepreneurs to invest in a business that they knew would soon render worthless, a practice that is immoral, unethical, oppressive, unscrupulous and substantially injurious to consumers overall.”