Drone food delivery scales as a cost-effective option

Demand for food delivery remains high even as inflation continues and labor issues put additional pressure on the channel which was never economically sound to begin with.

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Against this backdrop, businesses have been looking for more efficient ways to get food orders to consumers’ doorsteps, and consumers have been looking for delivery options with lower fees. Thus, companies promising robotic delivery, whether via a sidewalk robot or via a drone, have the opportunity to capture demand from restaurants, third-party aggregators and consumers.

Yariv BashCEO of a drone delivery provider Flytrexspoke with PYMNTS about the evolution of space since his last conversation with PYMNTS in the summer of 2021.

Read more: Flytrex CEO Says There’s No Better Way Than Drone Food Delivery

“When we spoke in July we had one station, maybe two, but [they could do] only very short-term deliveries due to regulatory constraints,” Bash said. “Now that we have the approval of the [Federal Aviation Administration (FAA)] for a one nautical mile radius, we currently serve a potential of almost 10,000 homes, so it’s really starting to pick up momentum… The number of homes we serve has increased by [a factor of] five or 10.

In December, the company received the green light from the FAA for these one-mile deliveries in North Carolina. The company’s business partners include mega-retailer Walmart and catering company Brinker International, parent company of Chili’s Grill & Bar, among other brands.

The price is right

The cost of delivery is a major deterrent to many consumers, according to data from PYMNTS’ Restaurant Friction Index, created in collaboration with Paytronix. The study, which is based on a census-balanced panel survey of more than 2,100 U.S. adults, found that the number one reason most consumers who don’t use aggregators stay The discrepancy is that they are unwilling to pay the delivery and/or service charges.

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“Drone delivery is… faster and free for the customer, so… it’s now part of [consumers’] lives,” Bash said.

In fact, a sizable share of consumers who don’t currently order delivery would do so if the fee were lower, suggests data from PYMNTS’ “Digital Divide: Aggregators and High-Value Restaurant Customers” report, created in collaboration with Paytronix, which surveyed a census-balanced panel of more than 2,100 US adults in the fall about their food purchases.

Get the report: Aggregators and High Value Catering Customers

The study found that three in 10 restaurant customers who had not used an aggregator in the previous 15 months would consider using one in the future if the aggregator offered lower delivery and service charges. . Moreover, this factor ranked above all others as the one that would influence the largest share of non-users.

Dip a toe in the water

Given the novelty of drone delivery, Bash noted, consumers tend to be cautious when it comes to their first orders, testing the model with hard-to-deliver items.

“Usually the first time people [order, they] try to see how good we are,” he said. “They…order eggs, coffee or ice cream – those kinds of items – just to see how they come up.”

After those first orders, he said, ordering became more routine, with consumers ordering any item from any other delivery service.

Certainly, on-demand delivery has become an expectation for most consumers, an expectation that restaurants have rushed to meet. The Restaurant Friction Index found that nearly all of the top performing restaurants offer delivery. Specifically, 97% of top performers offered the channel, compared to only two-thirds of bottom performers.

Additionally, the study found that the restaurants least likely to offer the channel are independent restaurants with table service; only 76% of these restaurants offer this option, compared to more than 95% of independent quick service restaurants (QSRs), table service chains and quick service chains.

By earth or by sky

Bash said he sees use cases for different types of automated food delivery robots.

“Each method of delivery has its…pros and cons, so for example sidewalk robots can deliver a much heavier payload, so if you’re doing your week’s groceries, drone deliveries aren’t going to be the answer. “, did he declare.

Conversely, he noted that drones can move faster, making them a better choice for commands the consumer wants or needs faster. Looking ahead, he predicted that new FAA approvals will allow delivery drones to be deployed on a larger scale.

Additionally, over the next few years, he predicted that drones would become the norm for restaurant delivery in suburban areas.

“In five years,” he says, “I think that unless you need something very heavy or you need a human being for a very specific reason, there will be no point in delivering meals other than by drones… in the suburbs. .”

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