Just like politics, all eCommerce is local. Though it often involves transacting with Amazon rather than local brick-and-mortar shops (recognizing that some Amazon orders involve smaller third-party sellers), fulfillment happens at your doorstep. And fulfilling that last mile to the doormat continues to evolve.
The vision here for years has been drone deliveries. Amazon and its logistical streamlining obsessions continue to salivate over the prospect of avoiding gridlock at the last mile. So it has taken to the local skies to deliver your packages – a concept that has always seemed futuristic and years from reality.
Amazon this week took a step closer toward that dream with some relaxed regulations that allow it to increase its physical range for drone delivery. Specifically, the FAA has approved the request for Amazon’s Prime Air service (yes, that’s a thing) to fulfill drone deliveries beyond line-of-sight proximity.
Flexing Muscles
Backing up for context, the FAA requires that drone operators maintain line-of-sight visual contact with their in-flight hardware at all times. This has made it difficult for Amazon to complete drone deliveries beyond a few hundred yards. So it threw lots of R&D dollars at the problem to find a workaround.
The result is Amazon’s Beyond Visual Line of Sight (BVLOS) technology that gives drones autonomous-vehicle-like abilities to detect and avoid obstacles. The FAA was sold on the solution and lifted its line-of-sight requirements for Prime Air. Alphabet’s Wing, which works with Walmart, has already done similar.
In terms of next steps, Amazon will flex its muscles with the newly-expanded capacity in College Station Texas. From there, it will ratchet things up to more densely populated areas to stress test the system. It has also run a test market in Lockeford California, and has announced plans for Tolleson Arizona.
The endgame here isn’t just drone deliveries but multimodal approaches that combine vehicles. As we’ve theorized on This Week in Local, the extent of this vision – for better or worse – is drones that fan out from moving trucks to deliver items locally, then return for more as the trucks cruise down the freeway.
Ep. 28 Peers into the Future of Drone Deliveries and SMB Automation
Your Margin is My Opportunity
The question this all leads to is what are the implications for SMBs? For one, Amazon’s continued innovations will likely come at the cost of SMBs. The more it can streamline its fulfillment logistics, the more it can engage in aggressive price competition. As Jeff Bezos says, “Your margin is my opportunity.”
But a less daunting angle for SMBs may be in the eventual down-market migration of this technology. Amazon is investing heavily in the tech, logistical systems, and regulatory lobbying. All of that could unlock similar capabilities for smaller player as it – like most emerging tech – trickles down to SMBs.
To be fair, and back to an earlier point, none of the above is an impending threat just yet. Amazon is playing a long game and this week’s developments are just the latest baby step. It will be a while before our local skies are peppered with Amazon drones, but the long view should be acknowledged, as always.
