28Nov

How Self Driving Cars will disrupt Retail


Self Driving Cars may impact physical retail stores, especially if they are combined with other new advancing technology such as automated warehouses, drones and 3D printing. This will allow products to be delivered to wherever you want, whenever you want and much quicker and cheaper than currently possible, creating a new level of convenience that some brick and mortar stores may struggle to compete with.

Transport Industry

Self Driving Electric Cars will happily work 24/7, every day of the year with no breaks, holidays, sick days, lateness, distractions, tiredness, hangovers, complaints, strikes, wage rises, overtime pay, training or retraining, compensation, severance pay, contract negotiations, bonuses, maternity leave, require pensions and only demand a ‘salary’ equal to the cost of energy. They will be reliable, constantly alert and behave rationally without emotion eliminating human error and bias thus reducing risk of crashes meaning fewer law suits or insurance costs. They won’t procrastinate, talk back or unionise and they they won’t commit occupational fraud or harassment to customers.

Vehicles transporting goods wouldn’t need heat or air conditioning for the driver, saving on energy. Vehicles in general will have more free space for extra stock or passengers as driver space is not required. The car is becoming a computer technology, it can be easily improved with new software updates, the on-board computers and sensors will continually become cheaper, more powerful, more energy efficient allowing a much safer and cheaper transportation experience, increasing the rate of adoption over time.

The general public may be slow to adopt but businesses and start-ups will utilise autonomous vehicles instantly as they will see the potential to out-compete rivals and increase profits by being able to deliver items and people safely at much lower costs. The robot capital may be expensive at first but should eventually pay off if the cost of employing a human is higher than a machine or software bot, over time. Uber is already experimenting transporting goods to people with Cornerstore, a delivery service to compete with Amazon and Google Express. With Uber’s almost $50bn valuation stockholders will be expecting Uber to grow so it will have to enter every sector of the transport industry, it will aim to revolutionise the transportation of everything, not just people, and with it’s $10bn funding Uber has the resources to create the fleets of self driving cars needed to do so.

Uber recently poached 40 of the best scientific minds working at Carnegie Mellon’s National Robotics Engineering Center. If Tesla can build a fully-autonomous car by 2020, Uber CEO Travis Kalanick says his company would buy it. In fact, he’d buy every one Tesla builds. Nearly every car manufacture, Google, Uber and Apple are all working on driverless cars. As of CES 2015, predictions for an on-sale self-driving car are on the order of two to five years away, or 2017 to 2020. People see this and think about taxi drivers or truck drivers being disrupted but one major occupation is often neglected, which is retail staff which I will discuss. The 4 possible scenario’s below will show how self driving cars and a few other new technological innovations can disrupt physical retail sales.

Scenario 1: Buying a Smartphone

Let’s say you want to order a smartphone but you only want it delivered when you are at home in the evening or on a Sunday. Currently it’s difficult for delivery firms to find drivers to work these hours or days and it may be also difficult for the warehouse to get workers to pick the items and stock them into trucks at those inconvenient, unsociable hours too. Both of these tasks, delivering and picking objects, will soon become fully automated, the machines will happily work day and night, allowing packages to be delivered on demand when it’s convenient for the customer.

Scenario 2: Ordering Clothes

Phones are starting to get 3D scanning abilities and in the future will have 3D cameras built in as the sensors become so cheap. Someone will create an app where you can 3D “selfie” scan yourself, this could get the precise measurements of your body or create a 3D model which you can dress up.

You could virtually try on clothes by easily and quickly swiping through a websites clothing section, to see what you look good in, advanced computer algorithms could even suggest what clothes would suit you or go well together. No lengthy queues for changing rooms or hassle removing and putting on clothes repeatedly, or taking things back because they don’t fit, just faster, more convenient clothes shopping.

Microsoft Hololens, Google Glasses 2.0 and other augmented reality tech will become cheaper, better and more prominent. They will transform your physical world, when looking in a mirror you could see different clothing on you. The same could be done for furniture in the home, wallpaper, appliances or the vast amounts of items where you are apprehensive about will it fit or look right, in the future you will be able to virtually see an item in the physical world before you buy it.

An automated warehouse doesn’t need prime location retail estate so has less rent. With less humans working inside then it can be lit up less, heated or cooled less so cheaper bills and reduced need for toilet or staffroom facilities which take up space so more room for stock. In a structured warehouse, stock doesn’t need to be displayed for customers so can be stored efficiently, it doesn’t need to constantly move from backroom to front of store, staff are not needed to face up items and other cost’s to maintain a storefront are not necessary in a warehouse. It doesn’t have to spend money on aesthetic or comfort features for humans. A warehouse can store goods in the most efficient way.

Within 20 years robots will be capable of stacking the warehouse shelves with the items that are delivered from manufacturers automatically.

Online items tend to already be cheaper and the trend may increase as the cost savings mentioned above will allow the online store to undercut the brick and mortar store in sale prices of items. Higher convenience for customers, better tech to try and look at goods before you buy and cheaper items will increase online sales. The high street will be at your front door, no travelling to shops, having to find the item, avoid people, queue, carry it back home and other inconveniences. Most goods are cheaper online, the only thing holding online shopping back today is the long wait for goods and inconvenient delivery times which looks to be eliminated soon. Brick and mortar will have stiff competition with this level of convenience as the virtual shop becomes far superior to the physical shopping experience.

Amazon CEO Jeff Bezos, whose personal wealth makes him the fifth richest person in the world with a net worth of $50 billion has plans to grow Amazon even more. “In its Q2 earnings this week Amazon’s value pushed north of $250 billion — some $20 billion more than Walmart. Don’t expect Bezos to be content to stop there though. Amazon’s vast vision really is about flipping commerce on its head, and bringing the fruit market, the high street and the changing room — the whole kit and caboodle — into the living room.” –TechCrunch

Scenario 3: Ordering Tools

Many retail stores may suffer from disruption due to 3D printing. This example uses a DIY retail store. Let’s say you don’t have a wrench, missing an ikea screw or trying to DIY fix your sink. You can get remote help using to diagnose the problem, if you are missing tools to fix your sink then a home 3D printer will allow you to print the correct size valve, pipe or spanner.

The performance of 3D manufacturing is improving. The prices (for both printers and materials) are declining. 3D printers allow you to print many other materials other than plastic, they can print metal, wood, ceramic, carbon fiber, graphene, clothing, food, glass, optics for use in lenses and even electronics. 3D printers are continually getting cheaper and faster.

Now this example assumes people have 3D printers in the home, which may take a while for majority of consumers to adopt, 3D Home Printing is expected to double every year, from almost 62,000 in 2013 to nearly 2.5 million in 2018.People will be buying(or “acquiring”, if the music and film industry is anything to go by) product designs and be printing them at their own home cheaply and repeatedly, causing even more disruption to retail.

But like the self driving cars, it will be companies which adopt and utilise new technology first. Amazon could buy industry 3D printers and become a manufacturer, they already have a patent to 3D print items inside trucks. They could merge advanced industry 3D printers with self driving cars, we could have fully automated, mobile, manufacturing in the not too distant future. In this scenario when running out of an item, say a wrench, Amazon could use it’s own 3D printers to create more. Another company could have 3D printers available for public use, you send your custom design in, it gets printed in the nearest facility and delivered to you.

Scenario 4: Ordering Groceries

It’s 5pm, you just got home from work and need to start cooking a meal but you realise you are missing some ingredients, currently you would have to nip to the shops to carry on but maybe you don’t have time or just don’t want to travel to them.

The ice cream van can now become automated and other products could start to be sold in a similar model as running costs become cheaper. Picture self driving mobile vending machines as described earlier, driving around stocked full of the most common bought goods. Nipping to the shop for some bread, milk, beer etc. could become a thing of the past as corner shops become mobile.

If the mobile convenience store doesn’t have the item then it could get to you from the warehouse. Self driving cars and automated warehouses will deliver items to you within the hour (e.g. Amazon Prime Now), much cheaper than today because a driver and warehouse staff wages won’t be needed.

But maybe 1 hour is not fast enough for you, luckily you will soon be able to get ordered items incredibly quickly by flying to your location. Amazon are aiming to use drones to get items to you in less than 30 mins and they may be available within the year.

The internet of things will allow you to have a smart fridge which could have cheap camera sensors to recognise bar codes or objects without barcodes such as fruit or veg. Once the smart fridge knows it’s contents, it will know when it’s running short and will ask you if it should order more. Like an advanced version of Google Now or Siri, the smart fridge will learn about your tastes over time, it will know what ingredients and food you like and will scour different online stores and notify you off deals. The weekly huge food shopping experience may become a thing of the past as smart AI develops the perfect shopping list tailored for you and automatically orders it for you.

Another way technology may change shopping habits is items like Amazon Echo where you can order just by speaking and it will pick it up, “aww I’m out of eggs” can turn into “Alexa, order some eggs” and they will be with you within 30 mins by use of a drone.

You can already order things on demand with smartphones and now smart watches, you are now always connected to online digital stores. More use of the internet of things such as Amazon Dash, will allow you to rapidly order common items when are you running out.

The next generation of smart watches will improve their bio-sensors and gain better health data like Apple Health is currently. They will track your body vitals and suggest meal plans to improve it such as preventing vitamin deficiencies or reducing salt/fat intake. Meal plans can be automatically ordered for you, improving your health and saving you time having to shop and count calories and check nutrition, know your preferred tastes so you can stop worrying about if what you buy is healthy. All these features will make online ordering more streamlined and natural. Why make the trip to the mall, spend gas, use up your free time, where in the time it would take you to get back from the mall the item could already be with you and cheaper if you just stayed at home and ordered it online?

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