Drones and Dash – vanguards of new retail, or IoT gumpf?

Amazon has expanded its UK-based drone research center, creating 400 new positions to fill in a week that followed a ground-based delivery drone trial between courier firm Hermes and Starship Technologies. In the US, Walmart is apparently braced to follow Amazon’s lead in order-placing buttons, but are these new technologies just marketing gimmicks?

Well, as you’ll be able to tell by the slightly clickbaity opening, they do have their uses. Amazon’s Dash buttons are perhaps the least viable of this new crop of devices that are trying to remove any friction between a customer and their purchasing decisions, but faster or more convenient delivery is a sure-fire way to enable more compulsive online purchases.

Outside of the retail space, enterprises, operators, and utilities have huge potential opportunities from drones, as a means of reducing truck-roll and worker safety concerns. Last week, Riot looked at AES, a global energy provider, and Measure, a Drone-as-a-Service startup, after they announced a deal to use drones to monitor the state of electricity assets, with a potentially saving of some 30,000 hours of work.

This week, in a similar vein, AT&T Labs has announced a new drone-based video analysis system for keeping tabs on the state of its tower network – using an AI-based inspection system to spot corrosion and tower defects without having to send an engineer up the tower.

For AT&T, the drones will still require a human technician to visit the tower and launch the drone, but we are not far from a future where such inspections could be automated, and left in the hands of a roaming fleet of drones. The technology is ready, pending some sort of charging infrastructure, but the aviation regulatory environment is still a long way off from enabling such unsupervised drone operations.

Ground-based drones seem to have an easier path in terms of regulatory hurdles, but there will almost inevitably be some form of controversy when a sidewalk-crawler knocks someone over or runs over a dog. These machines have a lot of potential technological overlap with self-driving cars, and may have to get some form of regulatory exemption from the traffic laws that keep things like bicycles off of sidewalks in many countries.

So while the legal barrier to their commercial operation appears lower than their aerial counterparts, these drones still have to prove their commercial viability. Paired with a smartphone app, they stand to provide fast deliveries of all manner of items – both consumer retail and B2B goods.

In a regulatory environment that is becoming increasingly hostile to vehicle emissions, the delivery firms are going to have to find ways to adjust their operations – as collectively, they can account for up to 40% of peak inner-city traffic. Electrifying their fleets is a solid first step, but offloading smaller deliveries to lighter vehicles and using an app-based notification system to ensure delivery would be another way to reduce the distance traveled by those larger vehicles.

Hermes and Starship are trialing the system in London’s borough of Southwark, following a pilot in Hamburg. The six-wheeled vehicles measure 55cm tall and 70cm long, travel at 6.5km/h, and can operate within a 3.2km radius of their control center – where they are loaded with up to 10kg of goods. They can both deliver and collect, making them an interesting proposition for customer returns tasks.

Domino’s Pizza is another drone advocate, although its success in New Zealand of dropping off a pizza felt a lot more ‘markety’ – complete with photo-op and press release. Nonetheless, Flirtey’s drone delivery system seemed to go off without a hitch, and Domino’s says it is considering similar systems in Australia, Belgium, France, the Netherlands, Japan and Germany.

While we remain skeptical of the value of having a dedicated button to order more detergent or toilet paper, via Amazon’s Dash buttons or Walmart’s version, its Prime Air drone delivery looks much better positioned for success. Amazon already delivers a surprising amount of its purchases, via its own courier fleet, and its decision to triple its Prime Air R&D center is a strong indicator of its intent to use drones as a way to boost sales for its retail platform.