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Drones to drive the future of retail?

Domino's droneAnd we danced, on the brink of an unknown future, to an echo from a vanished past.”
― John Wyndham, The Day of the Triffids

Last month, Domino’s unveiled its new drone delivery trial to the pizza consumers of New Zealand. While still subject to approval by aviation authorities, the drones are predicted to dramatically slash Domino’s’ delivery times, and offer the retailer a far greater market reach than other current options.

While New Zealand was chosen as the launch market because its regulations allow easier trials of drones by businesses, Australia is one the cards to be one of Domino’s next trial locations alongside Belgium, France, The Netherlands, Japan and Germany.

The thought of this technology finally ‘taking off’ in retail got us thinking about the many other uses for drones within retail. While drone delivery is certainly the hot topic of the moment, there are many other areas of retail where drones could have a huge impact on the efficiency of retailing. Here are a few.

Distribution centres and inventory management facilities

With consumer expectations rapidly evolving, and competition for slick supply chain solutions heating up, competitive advantage is up for grabs by tightening up inventory and category management systems. Working from one inventory pool for all channels, technology is the great enabler in this goal for a seamless offline/online experience.

The adoption of drones in warehouses and storage facilities allows for a reduction of the number of employees needed at each location, significantly cutting costs for retailers. And the speed of this technology could result in an automated, more efficient supply chain. For a company such as Walmart in the US, with over 150 distribution centres and numerous super centres, drones could dramatically influence the efficiency of each centre and facility. However, in Germany this idea has already become a reality for logistics giant, DHL, which has already integrated drones into its model.

Retail security, to patrol properties

Security is also an area being explored by drone technology, with drones allowing parking lots, shopping centres and/or store interiors be monitored at any time of day by individuals working off-site.

Site selection and facility planning

Drones are already being used in the construction and site management industries, allowing developers to explore vast build sites from the air and build more precise planning maps. Bringing this into retail, drones could be used to select sites, plan store or shopping centre design, and to better monitor all aspects of the development of a retail location.

Consumer insights

Research demonstrates the ‘fittest’ retail strategies are those built on a strong foundation of consumer insights, and while not a widely discussed topic, drones could change the way retailers gather consumer insights to allow them to build ‘fitter’ retail businesses. Retailers have been tracking footfall into their stores for decades, but drones would allow traffic and flow to be measured beyond the store. How do vehicles move towards stores or shopping centres? Are some customers put off by traffic outside a shopping centre or car park and therefore avoid city centre retail destinations?

Flying above a retail location a drone could collect data to measure the effectiveness of signage, the positioning of entrances and the impact of traffic or other impacts in the surrounding area. In the world of omnichannel and ecosystem retailing, pre-sale is just as important as during-sale. Therefore, this data could have a dramatic impact on the bottom line of many retail businesses.

Energy efficiency

Thermal cameras on drones could assist retailers, shopping centres and other retail facilities to increase their energy efficiency, opening up the option of saving money, while supporting and promoting a greener retail sector.

Drone acceptance on the rise

The fear factor around drones still looms over their adoption by the masses. However, much like any technology, acceptance will eventually come from education, awareness and time to fully integrate the concept into society. The adoption of drones could move quite a lot faster than other areas of new technology, with many consumers such as photographers and hobbyists, already buying drones as products to own themselves, heightening their exposure within society.

While the use of drones in retail and wholesale distribution is currently minimal, it is expected to increase rapidly over the next decade and could be a new piece of the puzzle for gaining and retaining competitive advantage.

Brian Walker is founder and CEO of Retail Doctor Group and can be contacted on (02) 9460 2882 or brian@retaildoctor.com.auVikki Weston, co-author of this column, is part of Retail Doctor Group’s Retail Insights team and can be contacted via email at vikki@retaildoctor.com.au.

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