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What will delivery look like in 2025?

The future of delivery is full of myths according to Dr Ludwig Hausmann, partner at McKinsey & Company, with initiatives such as instant delivery and drones unlikely to really take off before 2025.

Same day delivery will grow

Speaking at the recent Delivery Conference Dr Hausmann said that delivery will get faster but that the need for instant delivery would be rare. “We have looked at all the start-ups and seen a lot of companies promising this ultimate convenience but have asked is that really sustainable as a business model,” he said. Although the concept of instant delivery works in hot prepared food for anything else he said margins didn’t allow the instant delivery concept to be a viable one.

The traditional courier model will sustain

Dr Hausmann said he was also unsure that the crowdsourced model of couriers would be a viable option long-term. “The difficulty is the attrition of couriers. Because of this the cost of crowdsourcing is going up, which is why we are seeing more of a return to the employed courier model,” he said. However, he said such disruptors were having a significant impact on standards and expectations. “We will, in 2025, still have traditional couriers knocking on our doors but these start-ups are smart and are creating magic moments,” he said. “They have narrow time windows, in-flight communication and gamification and these magical moments are things both retailers and delivery partners have to think about,” he said.

Who will deliver – man or machine?

When looking at whether man or machine will be delivering parcels by 2025 Dr Kausmann said mass delivery by drones and druids was unlikely. “By 2025 the classic courier delivery will still be the norm. We will see a tiny share of drone delivery but don’t see an enormous shift from today’s model in the next seven years,” he said.

However by 2030 he expects that to have changed with autonomous vehicles with a locker on top having a greater share, thanks to an estimated 40% cost advantage as well as the convenience of being able operate 24/7 and offer more services to the customer.

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