How On-Demand eVTOL Aircraft Deliveries May Shape The Future Of Digital Retail

Innovative delivery methods could drive new business models such as shopping-on-demand, opening up rural markets, and doing away with ‘last-leg warehousing’
4 min read
Blue graphic of on-demand VTOL drone bringing a package

In this article we will discuss:

What have delivery services been up to?

eVTOL aircrafts, short for ‘Electric Vertical Takeoff and Landing’, is making headlines in the package delivery, and eCommerce space. CNBC has reported that delivery behemoth United Parcel Service (UPS) is purchasing 10 eVTOLs which will become fully operational by 2024. These aircrafts are unique in that they:

  • Take-off, and land like helicopters
  • Fly like planes
  • Have minimal to zero noise pollution
  • Are run on electric batteries reducing carbon footprint, and reducing costs (flying to a maximum of 250 miles at 170 mph on one single charge)
  • Enable quick / remote deliveries in congested, and hard-to-reach locations (more on this in the next section)

UPS will operate these aircrafts as part of its Flight Forward (FF) division which is also working on drone delivery solutions. The latter is typically viewed as a precursor, and foundation for widely establishing eVTOL, and paving the way towards commercial urban air mobility. Beyond cargo delivery, eVTOL is also being developed as part of inner-city transportation with ride-sharing giant Uber signing a partnership in 2020 with Joby Aviation in an effort to integrate future air, and land travel for the customers of tomorrow.

Timeline graphic of The Path To Commercial eVTOLs - 2020 to 2040

Image source: Cap Gemini

How might eVTOL shape the future of eCom?

eVTOL can have major impacts on one of the most central focal points of the digital marketplace: delivery times. Amazon, for example, has capitalized on consumer’s desire for instant gratification with Amazon Prime, and same-day delivery. eVTOL is poised to take this one step further, introducing ‘shopping-on-demand’ experiences with items arriving within the hour in metropolitan areas like NYC.

These aircrafts may also open up new markets in rural America. Much like Biden’s ‘broadband for all’ plan, eVTOLs will open up small, and medium markets to previously non-existent quick delivery options.

Additionally, this technology may make warehousing in the ‘last leg of a product’s journey’ superfluous, enabling items to be delivered from loading dock or factory directly to consumers. This can save both in terms of shipping costs as well as delivery times, both of which can become market-dominating advantages. This is especially true as eVTOLs can accommodate full shipping containers which gives them a leg up over other modes of shipping.

It is important to keep in mind that this form of freighting will not be suitable for all types of goods, customers, and contexts. At least at the outset, speed will come at a hefty cost before it becomes mainstream and prices average down, meaning it will most likely be used to initially serve the ultra-wealthy in ‘urgent scenarios’. For example, bypassing traffic and enabling event planners to receive last-minute decorations for a fundraiser gala at the Plaza Hotel. This is just one of the many new business models that can be developed depending on cost, demand, and consumer willingness to pay for convenience.

From a bricks, and mortar perspective, eVTOL may have big impacts on taking delivery trucks off of city roads and onto building helipads. This type of model could become a sustainable way to approach digital retail for wholesale b2b customers.

A data-driven feedback loop

Once eVTOL delivery enters the market it will revolutionize how products are stored, and distributed but also how consumers interact with digital retail. Just as consumer data plays a key role in enabling retailers to gauge:

  • Which items are trending now on social media, and search engines
  • What items have a ‘time is of the essence’ nature for shoppers
  • Which items are trending in which GEOs

So too will data play a crucial role in feeding a business’s competitive advantage. Alternative data is poised to become an important player in enabling companies to get a real-time snapshot of their rival’s activity. For example, geospatial data, and satellite imagery will enable them to define ‘consumer geo clusters’ and peak times. This information will allow companies to see when their competition is busiest, and swoop in to serve the impatient, and waiting.

Search, buying trend, and customer feedback data can indicate how effective offering eVTOL delivery options is as far as driving conversions, and reducing ‘cart abandonment’.

The bottom line

The purchase of eVTOL aircrafts by a major delivery service could be indicative of a more mainstream adoption in much the same way that PayPal’s adoption of Bitcoin was a milestone moment for the cryptocurrency market. It also appears that eCommerce, and retail will lead the ‘global pilot’ before humans start commuting in Jetsons-style flying cars. Whatever the use case, eVTOL technology will change the way customers shop, and commute if the adoption stages go as planned.

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