Amazon, Walmart, UPS flood the roads with new delivery tech

Retailers are aggressively competing to bring new delivery technologies to market, ranging from autonomous vehicles to gig economy apps.

In just the past few days, Walmart detailed plans to double its online delivery footprint in the U.S., Estonian robotics startup Starship Technologies began delivering food orders at George Mason University in Virginia, and UPS added nearly a dozen U.S. metropolitan areas to its Latch mobile delivery service for people who aren’t at home.

On Wednesday, Amazon announced Amazon Scout, an internally developed autonomous vehicle that’s an attempt to get out in front of Starship Technologies. Walmart is also testing autonomous vehicle delivery in the Phoenix area in collaboration with autonomous vehicle startup Udelv.

Amazon’s last-mile logistic plans are driving some of the action—most of what Amazon does ripples through the merchant services and technology industry, and services such UPS Latch are clear responses to the Amazon Key home delivery service.

Wolfe, Daniel

But there’s also an addressable international market that’s on pace to expand 400% over a seven-year span. The global same-day delivery market that was about $2.7 billion in 2017, but it is on pace to reach $10 billion by 2025, according to Adroit Market Research.

High-tech delivery adds another incentive to a make-or-break online category. Walmart’s online sales jumped in 2018, but not enough to impress investors, as the retailer’s stock’s stayed stagnant. That’s pushed Walmart to open innovation labs in New York and Texas to develop new technology to marry online shopping with in-store innovation.

“In an era where Amazon has an endless aisle containing limitless products that can be delivered often as quickly as the same day, why would you ever leave your house to buy a product?” said Rick Oglesby, president of AZ Payments Group. “You’d leave for experiences like amusement parks, restaurants and movies, but if a retailer’s selling point is durable, shoppable products like Walmart, you have to compete with Amazon.”

Services such as Instacart, Google Express and proprietary delivery services are absolutely necessary, according to Oglesby. “Retailers with many stores and a wide distribution network may actually have an advantage over time, but they need to compete with Prime and Prime Now.”

Walmart, Amazon and Starship Technologies did not return requests for comment by deadline.

One of Walmart’s new delivery partners, Roadie founder and CEO Marc Gorlin, did discuss online delivery, suggesting that despite the wave of robots, drones and driverless vehicles, retailers and e-commerce companies still have a “goal line” problem. The emerging technology also lacks the flexibility of a contract car-ordering app, which can use Walmart staff, customers, or the same pool of workers that often staff ride-hailing apps, according to Gorlin.

The Atlanta-based Roadie is designed to optimize the unused space in people's cars by matching drivers with deliveries.

“I’m really indifferent to autonomous vehicles and we don’t feature them,” Gorlin said. “You may solve for the ‘last mile’ with a driverless vehicle but what about the last 10 feet?”

Roadie has also worked with Home Depot and with airlines, delivering lost bags from airports to travelers. This market has attracted ride-sharing apps such as Uber to incrementally add more delivery services; and a driverless concept car at Mercedes that automatically alters a car for use as a ride-sharing vehicle or delivery vehicle.

“With a gig economy model, you don’t have fixed assets, or a certain number of vehicles and drivers, so you can deliver over longer distances and add a larger territory," Gorlin said, noting most new delivery services are deployed in larger cities. “You shouldn’t have to have a city with an NFL franchise to expand online delivery.”