Amazon's increasingly fast delivery service is completely changing the way customers expect their online orders to be fulfilled, while retailers are struggling to keep up. But can fulfilment get any quicker? And how long until we see drones zooming over cities, delivering to customers in minutes, not hours?
Amazon now offers its one-hour "ultra-fast" delivery service to 30% of the UK population, including London, Manchester, Leeds and Portsmouth. Prime members willing to spend a premium of £6.99 can receive their goods in less than 60 minutes, while those willing to wait slightly longer can receive delivery on selected Prime Now items within a two-hour window included in their yearly Prime membership fee. But what do customers need delivered within 60 minutes? Calpol for a house-bound parent looking after a sick child, perhaps? Clearly customers are regularly using this service for more than just medicine. And in offering ultra-fast delivery when you've run out of beer or want to get your hands on the latest video game, Amazon is completely changing consumer expectations when it comes to fulfilment.
The e-tailer's regular next-day delivery isn't half bad either. Last week, I ordered a pack of eight AAA Amazon-branded batteries for a mere £3.39 at 10pm, only to receive them the next morning before I'd taken a bite of my breakfast cereal.
Nearly 3 years ago, Amazon filed a patent for an ‘anticipatory shipping’ system, which allows the ecommerce giant to use the billions of data points Amazon collects on its customers – order history, wish lists and even the length of time you hover over the buy button – to predict purchases before they happen, so products can be moved closer to a shopper’s whereabouts to speed up delivery. Whether Amazon uses this technology effectively today is not confirmed, but you have to admire the company for attempting to shave off those precious delivery minutes.
In recent years, Amazon has created a mentality where customers ask for next-day delivery even when they don't need it, just because they can. The e-tailer does make some attempts to alleviate the burden on its supply chain by offering credits to Prime members who select the slower delivery option, but it doesn't make a song and dance out of this option because it isn't part of the slick Amazon machine millions of customers have come to love.
In practice, Amazon has created an ecosystem where customers expect super-fast delivery "for free" – even if it is actually part of the annual £79 membership which comes with other benefits like TV and music streaming. But how can other retailers expect to keep up with this demand for almost instantaneous delivery?
It's amazing to think how far fulfilment has come; not so long ago if you wanted something delivered the next day you would pay a premium of around £10 for the privilege – covering the cost of the retailer couriering the item to you. Nowadays, next day delivery is closer to a fiver, and customers spend around £10 for same-day delivery: Net-a-Porter charges £12 for same-day delivery for orders placed by 10am, while House of Fraser impressively offers same-day delivery on orders placed before noon at £6.
And while customers may only pay the higher same-day delivery charges if they have to – perhaps you're off to a posh dinner after work, only to go and spill mustard down yourself at lunchtime – but as these fulfilment timescales and prices continue to shrink, customer demand for the service will only increase.
Now enter drones. The notion of autonomous aircraft flying across towns and cities may seem ridiculous, but Amazon is testing out the technology in the English countryside and aviation laws are being evaluated to cater for this new fulfilment offering, which is not as futuristic as you may think.
Over the summer, 7-Eleven successfully completed the first fully autonomous drone delivery service to a shopper's home in the US. The trial, which was in line with Federal Aviation Administration (FAA) approval, delivered hot and cold food items to the customer's back garden in Nevada within minutes.
There's also Starship, a little robot with enough battery power to service local deliveries within 30 minutes from a retail outlet. Sadly, my faith in humanity doesn't stretch far enough to see a gang of delinquents on the street allowing the cute robot to wheel on by without intrigue and potentially damage.
But what about the damage the machines could do to humans? It's clear autonomous machines need to meet strict laws and guidelines going forward. No one wants the repeat of TGI Friday's bloody Valentine disaster two years ago where its "mistletoe drone" circling couples enjoying a romantic dinner, managed to clip off a bit of a customer's nose.