The warehouse robotics market is booming, but so too is the robotic delivery market. According to data from ABI Research, worldwide robotic last-mile delivery revenues will surpass $70 million this year.
But that is just a drop in the bucket compared to the growth expected in the market. The firm’s research found that these tiny sidewalk robots will grow into a $670 million market by 2030, delivering as much as $3.3 billion worth of goods.
The market is being driven by profitability concerns among retailers, restaurants and other delivery providers as more consumers seek out last-mile delivery of online orders directly to their homes.
“As inflation and vehicle costs rise exponentially, these businesses are struggling to raise prices on wary consumers and businesses, while needing to protect margins,” explained Adhish Luitel, senior analyst of supply chain management and logistics at ABI Research. “Key initiatives include reducing labor, vehicle maintenance costs and fuel requirements while scaling to meet demand and customer expectations.”
The analysis is part of ABI’s latest market data report on last-mile delivery solutions.
Robot programs growing
To date, the last-mile robot market has been limited, with tests often coming on college campuses or other controlled environments. But some companies, such as Nuro, are making deliveries in city environments.
Nuro is running pilots with Kroger (NYSE: KR), FedEx (NYSE: FDX), Chipotle, Domino’s (NYSE: DPZ) and 7-Eleven. Its third-generation vehicle comes equipped with enhanced safety features, including an external airbag in the case of unintended interactions with people on the road and an array of cameras, radars, lidar and thermal sensors that give the vehicle a 360-degree view of its surroundings.
Starship Technologies has a fleet of 1,000 zero-emission robots that made more than 1.5 million deliveries worldwide in 2021, delivering from big-name merchants like Starbucks (NASDAQ: SBUX), Subway, Panera Bread, Panda Express, Qdoba and more.
Kiwibot offers robotic sidewalk delivery robots and has a contract with Sodexo, which is using the bots for food delivery pilots at New Mexico State University, Loyola Marymount University in California and Gonzaga University in Washington, with plans to expand the program to more than 50 college campuses by the end of the year.
“The use of automation will continue to grow as governments increase regulatory approvals, more companies scale revenue-producing operations and both consumers and businesses find value in low-touch, quick delivery of their items,” Luitel said.
ABI noted that as more programs launch, especially on city streets, the profitability opportunity of robotic delivery will become clearer and communities will adjust strategies, which may also improve profitability.