By many accounts, the 2019 holiday season was a record high for many online marketers, as systems established during the year, including robotics and automation, were able to fulfill more orders than in previous years.
Amazon, considered the e-commerce ringtone e-commerce company, announced yesterday that the 2019 holiday season had broken the company’s records, with customers ordering billions of items worldwide, along with tens of millions of Amazon devices. In its announcement, Amazon makes no special mention of robots, but focuses on its human employees, saying the company added more than 250,000 full-time and part-time season roles through its fulfillment network, and 150 U.S. delivery jobs it employed more than 90,000 Amazon Logistics associates.
New ways of shopping are coming
Mastercard reported that online sales were up 18.8% over 2018 and overall retail sales were up 3.4% (excluding car sales). Holiday e-commerce sales now account for 14.6% of total retail sales, the company announced. On certain days, e-commerce accounted for a larger share of total retail consumption – on Black Friday, 15.4% of all sales were made online, and on Cyber Monday, it rose to 24.5%.
“E-commerce sales have reached record growth this year as more and more people make holiday shopping online,” said Steve Sadove, senior advisor for Mastercard. “Due to the later usual Thanksgiving holiday, we have seen retailers offering omnichannel sales earlier in the season, meeting consumer demand for the best deals on all channels and devices.”
Although most sales increased in sectors, the report said department store sales declined 1.8%, while online sales increased 6.9%, indicating the importance of the omnichannel offering, Mastercard said. Many of the robotics companies we interviewed also emphasized the need to support robotics in completing multipurpose channels, not only for e-commerce orders, but also to support efforts to supplement physical stores.
As 2019 is almost in the rearview mirror, many companies are now focusing on 2020 efforts. ABI Research, for example, says it expects e-commerce revenue to reach $ 3.52 trillion in 2020, “an explosion that will force retailers in faster and more affordable ways to reach the final mile and yard.”
As part of the company’s “54 technology trends to follow by 2020,” ABI proposes that retailers trade their profits to continue investing in e-commerce, especially through optimized transportation and logistics methods. “That growth depends on faster and more affordable ways to reach the final mile and yard in the suburban and urban markets, as well as the share in rural areas,” said Susan Beardslee, Chief Commodity and Logistics Analyst at ABI Research. New ways include increasing one-day delivery and seven-day delivery per week in 2020 to reduce door-to-door and counteract the Amazon effect. “The convergence of online and in-store stores is increasing, with brick and mortar being set up as hubs closer to the customer, as well as e-commerce sites directing package delivery to retail outlets.” In addition, there is an increase in investment in Buy Online Pay. in-store (BOPIS) options, ABI Research said.
Focus on the last kilometer beyond self-driving trucks
To get most of the last-mile delivery, many are turning to self-driving vehicles and other “delivery methods for robots,” but ABI Research said self-driving trucks are still a long way off. “Despite successful primarily testing and early-revenue operations, there are no known regulatory approvals or fully autonomous first- and last-mile solutions for large heavy-duty devices through demanding urban and suburban locations,” Beardslee said. “Very little, if any, commercial use without driver is ongoing outside closed-circuit operations in the United States.”
The research firm quoted Alphabet’s Waymo, which has been testing since 2016, still uses manually-operated vehicles with trained drivers; Daimler Trucks’ (DTNA) 2020 Cascadia with Detroit Connect 5.0 will offer Level 2 partial automation features – initially with automated braking, steering and lateral forward control; and Walmart’s testing of Ford Transit self-driving vans, which are scheduled for mid-mile delivery, with drivers driving the vans.
“The journey from SAE Level 2, the early commercial deployment of OEMs this year, to the ubiquitous highly automated Level 4 and fully automated Level 5 is still a long way off, which does not attract attention or clicks on the Internet,” says the research firm. Instead, there will be opportunities for closed courses, such as airports, ports, mines, oil and gas operations, universities, and corporate campuses, with vehicles equipped with significant AI.
As companies focus on last-mile delivery networks, we expect to see some new technologies that include robotics and automation. For example, Amazon released a patent this week outlining a system in which autonomous land vehicles can transport packages to a customer’s neighborhood and then coordinate the delivery of a threshold with a drone (Read GeekWire story here). What’s interesting about this patent is the combination of robot technologies – an autonomous ground vehicle that works in coordination with an unmanned aerial vehicle – which continues to indicate that the ultimate delivery option for many companies will be technology convergence rather than a single system.