Interesting Delivery Method But How Do You Tip a Drone?

It is not very often a story about product distribution is a big story.  In fact, this story is not only the biggest business story of the day, it seems to have captured a prize for being one of the biggest news story.  By now, most people have heard about how Amazon is testing distribution using drone aircraft.  The delivery drones would operate within a 10 mile radius of an Amazon distribution center and could fly an order that weighs up to five pounds and get it to the customer within 30 minutes.  Amazon’s experimentation with improving product distribution is part of an e-commerce industry trend to reduce delivery time to enable customers to enjoy rapid product satisfaction in the same way store-based retailers can.

Certainly the futuristic nature of product delivery by “octocoper” is a fun concept.  But what is a little unclear is whether this type of shipping mode can be more efficient than fielding a human delivery force.  Sure the 30-minute delivery guarantee is a key selling point, but pizza shops have been doing that for years.  Additionally, a human can deliver much more than five pounds.  

But human delivery does not do well in congested areas.  And as Amazon’s Jeff Bezos notes, this will be a prime target for this service.  So apart from issues the FAA may have with hundreds of small flying machines, what may actually be the key to this concept is landing space.  For this to work in cities, drones may need to maneuver and land in very tight spots, such as on the balcony of a high-rise apartment building.  If that can be done, then drones may provide some distribution advantages.

If there is one thing to take away from this story it is not to underestimate what Amazon can do.  It is a fair bet they will introduce this service, but it likely will not be part of a free shipping option.  It is more realistic, given the supporting infrastructure required to deploy a drone delivery force, that Amazon will need to generate additional revenue either by charging a stiff delivery fee or offering it as part of a “membership” plan similar to their Amazon Prime service.

 

What to Consider When Trying to Be Creative With Advertising
After 72 Years Loss Leader Pricing Returns to Oklahoma