Will test show Amazon’s drone program is ready to take off?

Discussion
Source: Amazon.com
Dec 15, 2016
George Anderson

Plenty of people have mocked Amazon.com since 2013 when CEO Jeff Bezos told “60 Minutes” that he envisioned a future in which customers would have their orders air delivered by drones known as octocopters. With the news this week that Amazon had successfully completed its first drone delivery to a customer in England, many will continue to have questions about the wisdom of pursuing this venture. Others, however, may decide that Mr. Bezos and company are on to something.

In a video released by Amazon yesterday, the company said it is conducting tests of its Prime Air Delivery (drone) service in the Cambridge area. The service will use “drones to safely deliver packages to customers in 30 minutes or less.”

The first delivery was made on Dec. 7 to a customer identified as Richard B. The order, which included a Fire streaming device and popcorn, took 13 minutes from click to delivery and covered about two miles from Amazon’s nearby Prime Air fulfillment center.

Mr. B. is one of two customers that Amazon is working with to conduct its field tests. The company has said it plans to expand the test to dozens of others in an area that includes farmland and open fields.

The test grew out of an agreement Amazon made with U.K. authorities earlier this year. The U.K. Civil Aviation Authority (CAA) is working with a cross-government team on the test. In July, CAA policy director Tim Johnson said, “We want to enable the innovation that arises from the development of drone technology by safely integrating drones into the overall aviation system. These tests by Amazon will help inform our policy and future approach.”

Amazon has been largely stymied in its attempts to get its drone program off the ground in the U.S. due to FAA regulations. Earlier this year, 7-Eleven made the first legal drone delivery to a customer in the U.S. The delivery made to a residence in Reno, NV included Slurpee drinks, a chicken sandwich, doughnuts, hot coffee and 7-Select candy.

DISCUSSION QUESTIONS: Do you see a viable use for drones in making deliveries to consumers? Do you think Amazon’s plan will concentrate on using drones for deliveries in rural and more open suburban areas?

Braintrust
"While I can never understand how this concept could potentially work, I hope that Amazon has a solid idea of what it is doing."
"Drones are already used for agricultural monitoring, data collection, surveillance, and security as part of the Smart Cities movement across the US."
"Is this really necessary, hubris, or technology run amok?"

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11 Comments on "Will test show Amazon’s drone program is ready to take off?"

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Mark Ryski
BrainTrust

I have a hard time seeing how drone deliveries can work at scale. While I admire Amazon and others for the creative thinking on solving delivery challenges with drones, the FAA and other regulators are right in being very cautious. Seeing the occasional drone flying around is one thing, but imagine a world where thousands of drones are buzzing around the skies. And while big players like Amazon and 7-Eleven may follow all the strict rules, what about the countless other “me-to” players that will join the drone party? It’s all fun and games until drones start dropping out of the sky.

Max Goldberg
BrainTrust

I see drone deliveries working in rural areas, but not suburbs or cities. In these areas, using drones would be less expensive than delivering by traditional means.

Ori Marom
Guest

“Aviation is fine as a sport. But as an instrument of war, it is worthless.” — General Ferdinand Foch, Professor of Strategy, Ecole Superiure de Guere, 1911.

Most major innovations that changed the world were initially dismissed by field experts as utterly impractical. While I can never understand how this concept could potentially work, I hope that Amazon has a solid idea of what it is doing.

Time will tell.

Tom Dougherty
BrainTrust

I have a hard time envisioning how this will work. No doubt delivery is changing but I think drones are like CDs. They seemed like a great alternative to records but no one buys them anymore. Digital downloads replaced them.

I think drones are just the necessary growing pains that an innovator like Amazon needs to experience as it reinvents once again what it means to shop.

Phil Masiello
BrainTrust

Here is what most people do not understand about Amazon. Amazon is in the logistics and technology business. The bulk of Amazon’s profit comes from Amazon Web Services and 82 percent of Amazon.com sales come from third-party vendors selling on the Amazon platform. So Amazon will continue to figure out how to deliver the last mile quickly and efficiently. Drone delivery will more than likely be used for both urban and rural applications. This will depend on the distance from the fulfillment center and the type of package it is. My speculation is that this will be used for low-value and small packages.

The other problem this solves is providing a video that is a real-time “proof of delivery” which is a shrink problem in the e-commerce world. Any e-commerce provider who values service replaces packages even when the delivery company shows “delivered” because the present signature-based systems are not definitive.

I think this will absolutely become a major part of small package delivery in the next two to four years.

Kenneth Leung
BrainTrust

I see it as a nice marketing concept and it gives Amazon some experience on the limits of drones’ hauling capacity and economics.

Given current drone payload limits I don’t see scaling it even in rural areas where you have less chance of a crash. One possible reason for Amazon to try this is for any future ambition they have to morph into a transportation company. Investing in the technology now means you may have first-mover advantage if there are breakthroughs in the range and payload limits of drones. Maybe you won’t use drones to deliver to homes but perhaps, for example, from one end of a college campus to another.

Bob Phibbs
BrainTrust

As Paula noted a few weeks ago, Amazon does these stunts during the first two weeks of December to keep Amazon at the top of the news cycle — regardless of scalability or availability. Shrewd move Amazon, shrewd move.

Charles Dimov
BrainTrust

Exceptionally cool concept. Great for attracting and keeping attention on Amazon as THE brand in online retailing. Super idea on video backing for the confirmation of shipment.

Although I think this will become viable eventually, I agree that we will probably see this deployed in rural locations first, and it will definitely take a while to have this work in cities.

I have to wonder whether their first foray into urban centers might use a drop box concept. The drone takes the package to fixed drop-off points which retain it for pickup by the customer (locker, in-person, etc).

Larry Negrich
BrainTrust

One package delivered, 10,000 articles and news stories. Worth its investment in advertising and PR.

John Karolefski
BrainTrust

Of course, drone deliveries in rural areas make more sense than in, say, large metro areas. But for a moment, let’s consider current pseudo-advanced innovations in the news: driver-less cars, drone deliveries of nonessential stuff, restaurants without hostesses, waiters, servers, etc. (one has debuted in Manhattan). Is this really necessary, hubris, or technology run amok?

Karen S. Herman
BrainTrust

Drones are already used for agricultural monitoring, data collection, surveillance, and security as part of the Smart Cities movement across the US. Retail and medical drone deliveries here in the States are only a matter of time and politics.

The U.K. is taking an aggressive step in innovation by actively planning to safely integrate drone deliveries into their aviation program. Working with Amazon to establish best practices for safely deploying these retail drones is brilliant.

I see retail drone deliveries occurring in congested urban areas, the spacious suburbs and certainly rural areas. The logistics are already underway here, with fulfillment centers being built or negotiated in strategic locations.

wpDiscuz
Braintrust
"While I can never understand how this concept could potentially work, I hope that Amazon has a solid idea of what it is doing."
"Drones are already used for agricultural monitoring, data collection, surveillance, and security as part of the Smart Cities movement across the US."
"Is this really necessary, hubris, or technology run amok?"

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