Leveraging Drone Technology for Last-Mile Deliveries in the e-Tailing Ecosystem

Abstract

The extended lockdown and limited in-person interactions resulting from the COVID-19 pandemic have radically changed many consumers’ shopping behavior. These changes include a rapid rise in online shopping, leading to the fast growth of e-logistics. As the popularity of e-logistics has spread worldwide, many retailers’ success hinges on their ability to deliver products to their consumers’ doorsteps. This ability cannot be nurtured without handling last-mile delivery services in a cost-efficient and sustainable way. However, last-mile delivery services pose unique and complex challenges since they require individual, door-to-door services that limit the opportunity to consolidate small shipments into large ones and thus increase cost burdens for retailers selling products online. These challenges call for new, innovative ways of managing last-mile delivery services. Such practices include utilizing emerging drone technology that allows retailers to deliver products from point to point ubiquitously without a pilot, driver, or vehicle consuming too much fossil fuel. This paper is one of the first studies to develop viable strategic plans for commercializing drone technology in the e-tailing ecosystem using visual decision-aid tools and performance management systems.