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ProdigyWorks: Delivery Disrupted

UPS, Fedex and the US postal service were working overtime this December, delivering over 60 million packages a day – a 50% increase over their normal delivery volume.  This surge in shipping is a direct result of the explosion in ecommerce orders.  Fueled by companies like Amazon that offer quick and free delivery, consumers are now turning online more than ever to buy household goods, furniture, personal items, groceries and of course, holiday presents.

According to Adobe Analytics, which tracks shopping trends, an estimated $107 billion was spent on online sales in 2017. With the increasing trend of online shopping not showing signs of slowing down anytime soon, what will be in store for the future of delivery in 2018, 2020 and beyond?


Futuring

Understanding how cultural trends, societal attitudes and technological advances come together to re-define and sometimes create entire industries is critical if your organization is going to stay in front of the competitive curve. These forces intersect at various time horizons and shape both competitive landscapes and market opportunities for companies willing to embrace an innovation mindset to look beyond their next quarter or two.

With a lens on both near-term and further out opportunities, here are some delivery innovations we see emerging from the world’s largest companies in preparation for the growing shift in the way we shop.

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Amazon Prime Air

Not too long ago, Amazon released news they were working on ways to deliver consumer merchandise using drones.  When first announced the idea of such a delivery system seemed outrageous.  However only a couple of years later, Amazon has completed its first drone delivery through Amazon Prime Air – a system designed to get packages to customers in 30 minutes or less using unmanned aerial vehicles.

 

Amazon is currently testing this delivery program in the UK, where the UK Civil Aviation Authority gave permission to test drone operations in rural and suburban areas, and the company has already successfully completed several deliveries to its Prime customers.

While this technology raises a lot of questions about the logistics of flying drones, especially in more congested areas, it is safe to say that Amazon is investing a lot of time and money in make this form of shipping a viable option.

Check out Amazon’s first package delivery here:  https://youtu.be/vNySOrI2Ny8

 

Walmart’s free shipping & delivery service

The rise in online spending has forced brick and mortar retailers to rethink their marketing and sales strategies as well.  A great example of a company innovating to keep up with the times is Walmart.  Walmart invested heavily in its online user experience.  With its acquisition of Jet.com and its new offering of free 2-day shipping on millions of items online, Walmart’s online sales for third quarter 2017 have jumped 50 percent over the same quarter in 2016.

 

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In addition to online shopping, Walmart has introduced grocery pick-up service at hundreds of stores nationwide and is testing same-day delivery at a handful of stores. Recently, the retailer also began testing “in-fridge delivery,” a service that stocks a customer’s refrigerator while he or she is away from home.

“Sam Walton (the founder of Walmart) said, ‘To succeed in this world, you have to change all the time,’” Mr. McMillon, the Walmart’s president and chief executive officer, said. “He wouldn’t have known that customers in the future would shop on their smart phones or with their voices, but he did know that retail would continue to change. He taught us that, and that for a company to succeed, it has to be agile and innovative.”  Walmart is one example of a company looking at retail’s future and coming up with new delivery solutions to stay ahead of the curve.

Check out this video explaining Walmart’s new home delivery program:  https://corporate.walmart.com/media-library/videos/why-the-future-could-mean-delivery-straight-into-your-fridge

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Google & Waymo

Google is noticing the changing of the tides and is throwing its hat into the delivery business ring as well. In 2016, the company was awarded a patent on self-driving delivery trucks that would bring packages straight to your door. The truck would have secure compartments that you can open with a pin number or credit card. Customers would request a delivery, choose the method they want for unlocking the secure compartment, and even be notified via text when the truck is nearby. And if it gets stuck in traffic, the truck will text to tell you it’s going to be late.

Waymo, the self-driving car unit owned by Google’s parent company, is also exploring how its self-driving know-how can transform the trucking industry as well, and the chief executive of Waymo, has said that self-driving trucks may emerge before self-drive taxis, signaling that autonomous delivery trucks might be closer in our future than we think.

Check out Waymo’s first autonomous car: https://www.youtube.com/watch?v=uHbMt6WDhQ8


The growth of e-commerce offers companies an opportunity to analyze how shipping is changing in the short and long-term and what that means for the future of delivery. Companies like Google, Walmart and Amazon are already spearheading this trend and are finding innovative shipping solutions to meet consumers’ growing needs and expectations. With the start to 2018 in full swing, how will companies continue to change and innovate the way we think about, understand and execute delivery today, tomorrow, and well into the future?

Learn more about LMCA’s innovation subsidiary ProdigyWorks – Originating as a partnership with Mensa more than 10 years ago, ProdigyWorks is a unique, high-IQ think tank that takes incredibly diverse combinations of the world’s smartest and most creative thinkers and unleashes them on brands’ toughest futuring, naming and product innovation challenges. Come see how rapid, high-level, outside thinking leads to smarter, more sustainable innovation that drives long-term in-market success for the world’s best-loved brands.

 

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