Page 379 - Introduction to Electronic Commerce and Social Commerce

366 11 Electronic Commerce Payment Systems and Order Fulfillment

years later, FedEx, introduced its “next-morning delivery” 20 miles covers about 50–65% of the “retailer’s core”
service. In the digital age, however, even the next morning “same- day addressable market” (French 2015a).
may not be fast enough. Today, we talk about same-day At the present time, commercial use is banned under FAA
delivery and even delivery within an hour. Deliveries of regulations unless they have given a company an exception.
urgent materials to and from hospitals, shipping auto parts to A few years back, Congress asked the FAA to come up with
car service shops, and delivering medicine to patients are a new set of rules for commercial use. They are expected to
additional examples of such a service. Case 11.2 described issue the rules by mid-year 2016.
the restructuring of Amazon.com’s distribution centers for Amazon is not alone in their quest. Other companies are
the expressed purpose of achieving same-day and even
working on their own tests for small parcel delivery. Some of
hourly delivery service for most U.S. households. Two other
newcomers to this area are eFulfillment Service (efulfill- the more notable efforts include:
mentservice.com) and OneWorld Direct (owd.com). These
• Matternet (mttr.net). Working with groups like Unicef
companies have created networks for the rapid distribution and Doctors Without Borders, a Bay area start-up called
of products, mostly EC-related ones. They offer national dis-
Matternet, has been using drones to deliver medical sup-
tribution systems across the United States in collaboration plies and specimens in Switzerland, Haiti, and the
with shipping companies, such as FedEx and UPS.
Dominican Republic since 2011. Drones provide autono-
Delivering groceries is another area where speed is impor- mous transportation. They don’t need drivers, aren’t
tant, as discussed in Chapter 3. Quick pizza deliveries have
impeded by traffic congestion, and are low cost and effi-
been available for a long time (e.g., Domino’s Pizza). Today, cient. Currently, their drones can handle loads up to 2 lbs.,
many pizza orders can be placed online. Also, many restau-
transport items about 10 miles at 40 mph so that the jour-
rants deliver food to customers who order online. Examples ney takes just under 20 min. Matternet thinks that the
of this service can be found at gourmetdinnerservice.com.
medical uses my sway regulators to approve the technol-
au and grubhub.com company. Some companies even offer ogy for commercial uses. For a step-by-step description
aggregating supply services, processing orders from several
of how the Matternet drones are used, see (French 2015b).
restaurants and then making deliveries (e.g., dialadinner. • Walmart (walmart.com) has some of the same interests
com.hk in Hong Kong).
in drones as Amazon. They have already tested their use
Supermarket deliveries are often done same day. Arrang- inside their warehouses, and now they have applied for a
ing and coordinating such deliveries may be difficult, espe-
permit to test them for outdoor package delivery. Initial
cially when fresh or perishable food is to be transported. tests will be focused on deliveries from their retail distri-
Buyers may need to be home at certain times to accept the
bution centers to their own store parking lots within the
deliveries.
same locale. From there the tests will grow to include
delivery in small residential neighborhoods. These latter
Delivery by Drones deliveries are of interest because there is a Walmart within
5 miles of 70% of the U.S. population. Walmart is using
Ideally, e-tailers want to deliver faster than you can get prod- Chinese-made DJI (dji.com) drones in their tests.
ucts by going to a store and buying them. The futuristic solu- • Flirtey (flirtey.com). An Australian start-up recently con-
tion is delivery of packages by drones in minutes. A dream? ducted the first FAA-approved drone delivery in the
Amazon originally touted that it would come true in 2015. USA. Using GPS guidance, the drone delivered bottled
However, 2015 has come and gone and still no drone deliv- water, emergency food supplies, and a first aid kit to an
ery. Obviously, this is going to take longer because of legal, unoccupied house in Hawthorne, NV. The delivery tested
technological (sensors’ capabilities), and other constraints. the drone’s ability to navigate around buildings, power
lines, and streetlights to make the drop in a populated
Example: Amazon Prime Air area. Flirtey drones have previously been used to deliver
One day we may see a fleet of Prime Air vehicles in the sky, textbooks in Australia and auto parts in New Zealand
delivering packages to customers’ doors. For how the deliv- (Boyle 2016).
ery is envisioned, see the video and text at amazon.com/ • Google Project Wing. Google X has been working on
b?node=8037720011. With Amazon Prime Air, drone drone delivery since 2014 under the umbrella of a project
delivery is currently being designed and test for commercial called Project Wing (Grothas 2016). Recently, they were
outdoor use under an exemption from FAA regulations. awarded a patent for a “mobile receptacle on wheels.” The
Amazon’s current models are designed to deliver packages basic idea is to have the drones deliver packages to the
under 5 lbs. within a 15–20 mile radius. The weight limit receptacles which will in turn deliver them to the
covers about 85% of the products they deliver and the recipient.