Last year saw the increased adoption of forward-thinking technologies such as AI, augmented reality (AR) and blockchain across multiple sectors. Parcel and Postal Technology International speaks to Richard Blown, head of innovation at Hermes, about how the retail delivery experience and the wider logistics sector will evolve over the coming years
What do you think retail delivery experiences will look like in one year?
The focus on sustainability continues to grow within our sector and we’re taking significant steps forward to develop a fleet for the future. Incoming legislation such as the Ultra-Low Emission Zone in London is prompting us to explore alternative fuels. We have recently made our first ever initial order for 30 compressed natural gas (CNG) vehicles in the UK and have an electric fleet of 32 vehicles delivering 11,000 parcels per day in London.
Earlier this month, our fleet won the GreenFleet Award for Private Sector Fleet of the Year (Medium to Large). This year, 15 CNG tractor units will join the fleet. We will also be looking to update our company car policy with a focus on hybrid and electric vehicles. We’re investing in our own CNG gas stations at our hubs across the UK and later next year we expect to have eight fueling locations live. By 2020, we expect to have more than 90 electric vehicles servicing cities with low emission zones.
How do you envisage the landscape changing in three years?
Three years is a long time in our fast-paced industry and we’re already seeing big changes in terms of automation and voice. Customer experience is the battleground for all delivery providers, and consumers are driving the majority of change when it comes to tech.
Automation is definitely an important part of our roadmap but it’s about using it in the right places, rather than just getting excited about technology. As an industry we are extremely good at delivering parcels despite the low margins, but where things get complicated is when things go wrong. Good customer service is a strong USP for us and automation can help with the simple stuff. For example, we are trialling a ‘self-service’ approach where the first six questions of any query can be automated.
We were also the first parcel company in the UK to fully integrate our end-to-end tracking solution with Amazon’s Echo smart speakers. Consumers can use voice commands via Alexa-enabled devices, such as Amazon Echo or Echo Dot, to hear updates on where their parcel is. The integration was engineered at our Innovation Lab in the center of Leeds, which is specifically tasked with developing a range of progressive products that we hope will change the delivery landscape.
Exploring new and exciting tech is an important part of our remit and as digital assistants like Siri, Cortana and Alexa have been developed to drive increased convenience, our research tells us that there will be a future shift away from screen interactions in favor of conversational interface technology.
We have been part of a testing program for the use of self-driving delivery robots in London, in partnership with Starship Technologies. It follows on from a project which has seen Hermes Germany and Starship Technologies test parcel delivery by robot in the Ottensen, Volksdorf and Grindel suburbs of Hamburg.
We used the testing period in the UK to better understand how the robots could enhance our ability to offer an increased range of on-demand solutions in future. We believe that self-driving robots could offer greater scheduling and tracking capabilities, and that they’re a viable alternative to drones, which are difficult to deploy in built-up areas due to strict aviation laws, and are able to carry only small and light packages.
Finally, what about five years’ time, in 2024?
Physical stores will be all about the experience, combining retail with food and leisure activities that you still can’t get online. Clever use of immersive technologies such as AR and virtual reality will blur the lines between physical and digital retail experiences.
Consumers will interact with the products in store but expect them to be delivered before they get home. 5G networking technology should be widely available, paving the way for smart cities and smart vehicles that can interact with the connected world around them. This will enable dynamic route planning and network optimization and further inroads into autonomous vehicles.
Amazon will continue its dominance as a major e-commerce gateway with an increasing monopoly of consumers starting their online journeys via Amazon. Revenue from advertising and cloud computing will allow them to further invest in logistics, food delivery and strategic bricks and mortar locations. We anticipate Amazon leveraging these to fulfil on-demand delivery of the most anticipated products sourced through AI and machine learning.
Retailers and delivery partners will be leveraging data and AI to tailor the personalization of products and services to match consumers’ increasingly busy and fragmented lifestyles. An increasingly younger demographic will be willing to share their personal data with the brands they trust to secure it and use it to fulfil their best interests.
Finally, connected homes and vehicles providing enhanced delivery opportunities and self-ordering appliances will also be viable. However, even in a 24-hour, always-on, always-connected economy, speed and reliability of service will still be key.