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The Rise of Autonomous Delivery

By STCR Staff 

With an increasing number of people embracing the convenience and immediacy of grocery delivery, many technology companies are exploring new solutions for fulfilling orders and delivering them to customers’ homes safely and expediently. Enter autonomous delivery: a very futuristic-seeming concept that is actually in practice in selected markets across the country. Autonomous delivery is the practice of transporting and delivering groceries and other goods with robots instead of the delivery personnel. While the concept is still in its beginning stages, many robotics companies are working with their local municipalities to get testing and preliminary permits for the self-driving vehicles off the ground. 

In late December 2019, it was announced that regulations approved by the California Office of Administrative Law will allow self-driving minivans, pickup trucks, and other small vehicles to begin testing on the road. Thus far, Waymo, an Alphabet subsidiary, is the only company that has received a permit to fully test autonomous vehicles in California, but this recent advancement signaled that municipalities across the country are seriously considering the prospect of autonomous delivery as a solution to the growing demand for convenient and quickly delivered goods.

For grocers, this development signals that the demand for delivery has staying power, and retailers will have to get on board with the changing priorities of their shoppers. While this may seem daunting, the promise of autonomous delivery implies that there are technological solutions to hiring a full delivery staff and fleet of vehicles to accommodate a large volume of deliveries. In fact, industry leader Kroger has already started delivering groceries in a partnership with self-driving car company Nuro in select zip codes in Houston. Customers in the selected Houston ZIP codes can place orders for same- or next-day delivery through the Kroger website or app, and for a flat $5.95 fee, the order will be delivered by a self-driving Nuro vehicle. Walmart is also testing the Nuro model in Houston, expanding its existing grocery delivery service to operate more efficiently utilizing Nuro’s custom-built delivery robot.

As more big-box stores move toward pilot testing these high-tech solutions, it signals to smaller retailers that delivery is a priority for many customers and they are willing to pay for the convenience. While it’s not feasible for small retailers to be early adopters of autonomous delivery services now, the fact that it is a service that large retailers are seriously bringing to fruition indicates that delivery is an integral part of the future of the grocery industry.

For smaller grocers looking to incorporate this concept into their business model, implementing the following steps is a good start to getting in on the high-tech delivery action:

  • Online ordering: Grocers who don’t already offer online ordering may want to consider the benefits it could offer. A 2019 survey from Coresight Research revealed that 36.8 percent of shoppers in the United States purchased groceries online last year, a number that is up 23.1 percent from 2018. Whether or not you can support delivery, customers have demonstrated that they value the convenience of shopping online and picking up their groceries curbside. 

  • Delivery: The next logical step after online ordering is to offer delivery services. While it may seem like a large investment, many grocers have adopted different strategies to ensure that the costs associated with providing delivery services are recouped. For example, Walmart offers a subscription service, with which customers can receive unlimited grocery deliveries from Walmart for a rate of $98 per year or $12.95 per month.

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