What role will robots play in the future of food delivery?
Food delivery has made major advancements in the past few years, with new technologies that increase convenience and allow consumers to track orders in real time. The pandemic sped up adoption of restaurant and grocery delivery, and advanced innovations around contactless delivery geared toward minimizing contact between customers and drivers.
Once such technology that is garnering increasing attention from restaurants, food retailers and tech-savvy investors is autonomous delivery.
Last week, Chipotle Mexican Grill announced that it has invested in Nuro, as part of the autonomous delivery company’s Series C funding round.
"With financial and strategic support from world-class companies like Chipotle, we can continue to advance our industry-leading autonomous technology, grow our team and expand our delivery service,” Nuro co-founder and President Dave Ferguson said in a statement.
The company partnered with Domino’s in 2019 on an autonomous pizza delivery test in Texas, but Chipotle has not yet announced any plans to add offer delivery through Nuro’s fleet of autonomous vehicles.
“We are always seeking opportunities that provide innovative solutions for increasing access and convenience for our guests," said Curt Garner, Chipotle’s chief technology officer. "Nuro could change the traditional delivery model and we believe consumers are going to continue to seek options and additional access points for how and where they enjoy their food."
Feeding growing demand for delivery
Having food delivered by a robot or a driverless car is something most consumers have not yet experienced, but it’s an idea that is increasingly piquing their interest. About four in 10 consumers said they would use autonomous delivery if it was available, according to a 2019 report from The National Restaurant Assocation and Technomic. Today, with demand for delivery -- particularly contactless options -- elevated amid the pandemic, it’s likely that figure would be even greater.
Six in 10 adults say they’re more likely to get their food delivered than they were before the pandemic, according to the National Restaurant Association’s State of the Restaurant Industry report. About half (53%) of those surveyed said purchasing takeout or delivery food is essential to the way they live.
Delivery currently accounts for about 9% of all restaurant orders, which is a 154% increase year-over-year from 2020, according to the NPD Group.
The past year has brought a “similar phenomenon at grocery retail,” NPD industry advisor David Portalatin said. About 42% of American consumers have purchased edible groceries online in the last 30 days, and those purchases were split fairly evenly between pickup and delivery.
Rolling out more robots
In addition to Nuro, which also partners with retailers including Kroger, there is a growing list of companies rolling out robots in hopes of securing their place at the forefront of a new era of food delivery. Starship Technologies, Tortoise and Kiwibot have numerous partnerships that rely on their robots to deliver meals and groceries.
Colombia-based Kiwibot got its start delivering food in the US on the University of California-Berkeley campus, which is where it caught the attention of Ordermark. The online ordering platform provider is partnering with Kiwibot in Berkeley and San Jose to provide last mile delivery for restaurants, and expansions in Santa Monica and Denver are in the works, Ordermark CEO Alex Canter said.
Canter, who invented Ordermark while working at the family-owned Canter’s Deli in Los Angeles, said autonomous delivery offers an opportunity for restaurants to reduce the high costs associated with third-party delivery.
“More and more restaurants are realizing that they need to own their own...direct to consumer effort so their most loyal customers can order directly from their website or their own ordering app versus going to UberEats or DoorDash,” he said. “But of course, one of the things that needs to be solved is who’s going to actually deliver that food.
“It can cost last-mile delivery companies $6 to $8 per order to basically just assign a driver to pick up the food and deliver it...Kiwi is able to deploy these autonomous delivery carts that can substantially reduce that cost down to the $1 to $2 range, which is game-changing,” Canter said.
He isn’t the only one who sees the game-changing potential in autonomous delivery. The global market for autonomous last mile delivery (including both ground-based robots and drones) is projected to hit $84.9 million by 2027, according to a report from Grand View Research.
Owning the last mile
There are several factors that will determine if robots become the go-to delivery vehicle of the future or stall out as a solution that only works in certain situations.
With a delivery range of just a couple miles, small robots like those from Tortoise and Kiwibot make the most sense in dense urban settings where they are closest to the greatest number of people. In the markets where it operates with Ordermark, Kiwibot has a "very high success rate of delivery," according to Canter, but the robots can sometimes run into trouble if they need to make a delivery on an upper floor of an apartment building, for instance.
When it comes to navigating the streets, Kiwibot and Tortoise have both been proactive in seeking out partnerships with the transportation departments of the cities where they operate. "By putting robots in the loop, and by being deeply integrated with cities, to work with cities for the next 20, 30, 50 years, then it's good to start slow and have this foundation,” Kiwibot's David Rodriguez told Spectrum News.
To help consumers warm to the idea of sharing the streets with robots, Rodriguez said they were designed to look friendly and non-threatening. So far, consumer reception of delivery robots has been pretty positive. Canter said “consumers really love it,” because it’s something new and cool, and the animated face on the Kiwibot’s screen makes it fun to interact with.
It remains to be seen if the combination of cuteness of convenience is enough to convert people to autonomous delivery.
“At present, the American consumer is increasingly willing to own that last mile of delivery,” Portalatin said, explaining that picking up their own meals or groceries often proves to be cheaper and have a higher rate of satisfaction among consumers in terms of quality and time.
However, he said, “if technology can create an autonomous solution that solves some of those issues, maybe that would change in the future.”
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