Despite the common belief that the “eating at home” trend is giving grounds to “eating away from home,” the reality is quite the opposite. According to David Portalatin from the NPD Group, the increasing cost of a restaurant meal along with the ease of online shopping, as well as the popularity of streaming entertainment, make most Americans eat at home.
The outbreak of COVID-19 catalyzed the trend, leading to the online grocery sales increase. As stated in research by Brick Meets Click, online grocery sales for home delivery and pickup reached $6.6 billion in May, up 65% from $4 billion in March. The fact that many people practice social distancing, and many of them optimize their spending due to a job loss, explains skyrocketing grocery and meal-kit delivery demand. It also holds enormous opportunities for delivery service providers, with a slew of new business models appearing amidst the pandemic, such as dark grocery stores, ghost kitchens, warehouses, and curbside pickup.
Still, not all the delivery workers at leading service providers, such as Instacart, were empowered to do their job safely. At the beginning of the pandemic, some of them complained about the lack of masks, sanitizers, and gloves. Here, delivery tech steps up to eliminate the dangers of human-to-human interaction and get the job done.
Let’s dive deeper to learn what delivery technologies spur the growth of the grocery industry and help people make it through the pandemic.
Autonomous delivery: Tech advancements and investment opportunities
Although some companies, such as Starship Technologies, had been in autonomous delivery for years before the coronavirus outbreak; now, they’re facing an immense surge of demand. In general, the autonomous delivery market has many options to help decrease the touch points between people, such as the following.
Self-driving delivery robots
Self-driving delivery robots were already in use before the pandemic, operating in universities, hotels, airports, and urban areas. However, with the lockdown brought on by COVID-19, they were increasingly in demand.
Self-driving robots by Starship Technologies, a startup that was founded in 2014 and raised $40 million in funding in 2019, are six-wheeled ground robots that can navigate streets and sidewalks. Although they drive autonomously, they’re monitored by humans who can take over control, if needed. They can carry items within a 4-mile (6km) radius and have already traveled more than 500,000 miles, with more than 100,000 deliveries completed. Delivery requests can be made via a mobile app. It’s possible to specify the desired time of delivery and track the robot’s location using a smartphone, once the order is placed. Robots are equipped with sensors, AI, and an advanced object-detection system, which helps them to drive around people and other objects. Since they move at a pedestrian’s speed and weigh around 100 pounds, they rank high in terms of safety and security.
Another startup, Nuro, was founded in 2016 by two ex-Google engineers; it made its way to LinkedIn’s Top 50 Startups List in 2019. Nuro, focused on grocery delivery in Texas and Arizona, responded to the pandemic with R-1, a lightweight electric self-driving vehicle of over 6 feet (1.8 m) in height, and half the width of a sedan. R-1 has enough space for 12 grocery bags, and it navigates using 12 high-definition cameras and LIDAR, a type of radar for detecting objects and estimating their velocity, as well as ultrasonics and audio sensors.
Self- driving delivery vehicles and vans
Automated delivery vans are another kind of vehicle that serves as an alternative to “human” delivery.
UDI is a Shenzhen-based startup that delivered groceries to 16 communities in eastern China with the help of its autonomous vehicle called Hercules. The vehicle is a robot equipped with cameras, 4 LIDAR systems (1 main and 3 auxiliary) 16 sonar systems, satellite navigation, and an inertial measurement unit (IMU) to drive autonomously. It’s been designed exclusively for goods transportation, and it can carry over a ton in its cargo compartment.
Self-driving vans by Gatik.AI, a Palo Alto-based startup that raised $4.5 million in funding, differ from sidewalk robots and small Nuro vehicles, and from big autonomous rig trucks driving on highways. They’re somewhere in between these extremes and operate in B2B logistics. They use Ford Transit vehicles equipped with a self-driving system by Gatik and can drive up to 200 miles a day, delivering customer orders from Wal-Mart’s warehouse to its neighborhood stores. The ability of autonomous vans to transport multi-temperature cargo makes Gatik.AI the first company delivering cold and frozen goods.
However, some self-driving vehicle providers, such as Ford, went even further to address the consumers’ need for doorstep delivery (as there’s no driver in an autonomous van to do it). For that, Ford partnered with Agility Robotics to use its humanoid robot Digit to bring boxes right to the customer’s doorstep. Unfortunately, the robot is still in testing, but deploying it before the pandemic outbreak could have saved the day.
Drones
Drone delivery was also booming amidst the pandemic. For example, drone delivery company Wing made more than 1,000 deliveries in two weeks during the pandemic, operating in the United States, Finland, and Australia. Despite the limited payload capacity of drones (around 5 pounds or 2.2 kilos on average), such a delivery option was invaluable for some semi-isolated regions of China. A typical grocery delivery there requires three modes of transport: goods are delivered by ship, by ferry, and then on foot, so using drones was just the thing.
The bottom line
The upswing demand for grocery delivery catalyzed by the pandemic is likely to fuel the growth of the delivery robots market. According to recent stats, the market is set to grow from $11.9 million in 2018 to $34 million by 2024, at a CAGR of 19.15% during the forecast period. The increase in VC funding is also a contributor to market growth.
