This Christmas an increased percentage of my shopping was, of course, done online. I also used Click and Collect for the first time. Perhaps next year I’ll be picking up packages from the spaces in London Underground stations where once a ticket office stood. Or perhaps I’ll be getting them by even less usual means. Here are a couple of possibilities. It is probably unrealistic to say that 2014’s Christmas shopping will arrive by either of these routes but one year they might. They are both developments that threaten to shake up and disrupt businesses that distribute or have a business model built on distribution.
Drones: Amazon’s release of a video showing a drone being used to deliver an Amazon parcel was, for many people, the first time they had thought of drones as anything but weapons of war. In 2014 we’ll hear more and more about drones but it will be a long time before they are a significant distribution channel for retailers. If and when they are they could have an interesting effect on the High Street. Tim Harford, the FT’s Undercover Economist points out that “Amazon’s business model is built on vast, efficient warehouse hubs a significant distance from consumers” but that the “speed and short range of drone delivery suggests that Amazon would need many more, smaller dispatch centres much closer to consumers. Other retailers have these: they are on the High Street”. Other reports suggest that Amazon are being defensive by working on drone delivery as specialised drone companies are working to own this emerging distribution model, charging retailers for using them taxi-style. Drug dealers will be early adopters of drones. They will pay little heed to airspace legislation and will enjoy the idea of unmanned deliveries. Drones needn’t deliver to specific addresses either as the rendezvous can be arranged out of home. That’s a plus for the criminal – but also a plus for retailers who can deliver to consumers on the go. In the shorter term expect to see drones used for data collection and by journalists, both professional and citizen.
3D Printing: 2013 has been the year of demonstrating that things can be manufactured by 3D printing. It took a dark twist (but raised awareness considerably) when the American crypto-anarchist Cody Wilson produced the world’s first 3D printed gun and made the plans available online for free. Between May and November it was downloaded 100,000 times. Whilst crypto-anarchists are jumping into 3D printing head first, businessmen will be looking at the technology with interest. Manufacturing products overseas has shipping and contract management costs and it will become more expensive to manufacture in China. Simple products may well be produced closer to home using the new technology. Expect 2014 to be the year of headlines that announce, “The first ever 3D printed [insert anything from mobile phone to cake stand to DIY drill]”. The cost of 3D printing is falling dramatically and people will soon have them in home. Speeding up home-adoption of 3D printers will be heavy competition in this field which will drive prices down fast. 3D printers will eventually be seen as a form of distribution where consumers buy designs online and print them out instead of waiting for delivery (no time to wait for a delivery drone!). It is instant gratification which should cause more impulse purchasing and be a gift for companies who do free offers and promotional gifts.