Digital Transformation on Retail Deliveries

By Chris Cunnane

Technology Trends

Digital transformation is the process of using digital technologies to create new and/or modify existing processes and experiences in order to meet the ever-changing market and business requirements.  At this year’s ARC Industry Forum in Orlando, Ed O’Brien, the Director of Research at ARC, joined ARC’s Chris Cunnane for an interview on digital transformation.  Watch the full video here and/or on YouTube.

The Role of Digital Transformation on Retail Deliveries Today and in the Future

Mr. O’Brien says, “In many ways digital transformation is the cornerstone of what's occurring throughout the supply chain, not only through the manufacturing and planning phase but also into the actual delivery to the warehouses.  The next step is the last-mile delivery, and in many cases between the various phases of both semi-autonomous and autonomous vehicles, they're starting to be tested, and in some cases, being put into production.  Not without some challenges, but there'll be some great opportunities for being able to use the digital transformation, be able to plan, to be able to route, and it's also kind of a cool factor that the end users are enjoying in the pilots.”

Delivery by Drones

“They’re central to it,” says Mr. O’Brien.  He continues, “There is a wide range of issues to contend with.  Safety, for not only people that are being delivered to, but also navigating through the streets, navigating to homes in the case of a pizza delivery example, but even to the point of having semi-autonomous or autonomous packages through the companies like Amazon and others that are trying to get approval, in some cases having approval. But it's central to know what's needed, what are the barriers on the way.”

He also states that, “In the cases of drones for example, when and whether beyond visual line of sight will be able to be used, whether over populated areas, and in the case of sometimes the cute little delivery robots, the idea of what happens if children are in the way, what happens if pets are in the way in urban centers.  That's why they're probably going to more visible in less populated suburbs. But there are a number of issues that are not insurmountable, but it may take quite a while to convince the public that they'll feel safe no matter what.”

Headwinds for Machines Such as Drones

Mr. O’Brien thinks that regulatory is the headwinds for machines, such as drones.  He says, “I think getting the right business case for investments as well, because they're not cheap, and you're delivering low cost in the case of pizzas, and whatnot.  Looking at packages, whether you're looking at tests at Amazon, UPS, FedEx, or others, or even other services, they're working on getting past the regulatory issues, the issues of—in drones for example, in addition to beyond visual line of sight, and being able to fly over populated areas, that's the biggest issue for drones.  Also, the area that they could fly there are a number of those regulations.  But also, what happens if you have a failure?  So, if the rotors fail, there has to be a failsafe, an audible alarm, maybe a parachute, and maybe some other feel safe way for it to land without hurting anyone.  So regulatory probably, but also the business case is going to be critical, because the ones that we may see on YouTube now aren't necessarily that big, so you can't really have a large payload to be able to pay for it.”

There are interesting things happening in this field of digital transformation, and Mr. O’Brien has clearly stated that although there are certain “headwinds”, it is still a major step toward the future.

Engage with ARC Advisory Group