Why click-and-collect and Uber will continue to beat drone deliveries for retailers – report

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Drones might have grabbed headlines within the fashion industry when they appeared on the runway at Fendi, and again via Intel during New York Fashion Week just this past season, but it doesn’t look like they’re going to be impacting retail anytime soon.

There’s a dream that the difficulty of the “final mile” in terms of delivering packages to consumers, will be solved with such unmanned aerial vehicles. But a new European report from real estate advisory firm, Colliers International, shows soaring property costs and strict regulations as two major barriers for a high-tech delivery revolution.

While Amazon first expressed its intentions for retail drone deliveries via “Prime Air” in 2013, regulations on both sides of the Atlantic are yet to make that a reality. As the Amazon page dedicated to the ongoing project reads: “We will deploy when and where we have the regulatory support needed to realize our vision. We’re excited about this technology and one day using it to deliver packages to customers around the world in 30 minutes or less.”

In Europe for instance, the European Commission last year said it wanted further regulation on commercial drones in order to prevent issues with safety, privacy and data protection. “Worries around privacy for residents, businesses and public bodies in the flight path of commercial drones carrying recording devices have led to worries around national security and breaches of privacy as well as noise pollution,” reads the ‘From Sheds to Shelves’ report from Colliers International.

Meanwhile, demand for commercial property from big players such as Amazon in and around cities like London, has seen a rise in costs for such urban logistics spaces too, it explains.

This all comes at a time where increasing online sales suggest there is growing need for local delivery hubs to ship goods to consumers. But the report recommends retailers focus on existing methods such as in-store pick-up, collection lockers, bicycle couriers and taxi services like Uber.

Head of EMEA industrial and logistics at Colliers International, Tim Davies, says: “Realistically with rising rents and increasing complication of airspace regulation, drones may become more trouble than they’re worth.”

Here are some further insights from the report:

  • Collection points have grown as a natural solution in congested cities with consumer groups typically less willing to wait at home for a delivery. Around 33% of customers in the UK are now choosing in-store collection followed by 13% in the US, though Colliers International expects these numbers to double by 2017
  • Towns and cities are going to a need more intricate network of urban logistics to cope with online demand. This will create a need to develop retail warehouses in and around the periphery of cities where land values are greater per m2 than in far out places where large warehouses traditionally locate
  • Skyscraper sheds could be a rolling theme as land around
our cities tightens. The world’s tallest warehouses now reach 24 storeys, and accommodate automated systems. Many schemes across Hong Kong, Singapore and Japan are multi-storey and similar schemes are now being considered for in-fill development in tightly constrained US cities
  • Traffic congestion in Britain and other European cities, coupled with the need to improve air quality and manage urban CO2 emissions is seeing an expansion of cycle logistics companies which are faster, and more importantly, greener. As urban warehouse footprints expand, these cycle logistics services are set to increase
  • Bonus fact: Hugely increased vessel sizes are reshaping the layout of ports worldwide. As containerised shipments have grown by 290% over the last 15 years, vessels are now around 25 times the size of their 1970 equivalents in order to cater for the extra cargo