Retail Disruption Watch (January 2019)

CHICAGO -- Just as Uber upended the taxi industry, terrestrial drones are a growing trend that could alter the business of delivery.

Rolling coolers from European startup Starship Technologies have been tested in select U.S. markets for years, but more widely recognized names are getting into the autonomous delivery game now, including Pepsi, Postmates, DoorDash and Kroger.

But not everyone is hopping on the autonomous vehicle bandwagon. Some Phoenix-area residents are throwing rocks at Google’s self-driving cars.

Here's a look at the self-driving saga and more disruptors for convenience-store operators to watch …

Students at the University of the Pacific in Stockton, Calif., have guests this semester. Little self-driving coolers known as Snackbots are trundling across campus, bringing healthy snacks to students who can summon the bots with a mobile app.

The Snackbots are courtesy of PepsiCo and Robby Technologies. The university is serving as a test site with three to five Snackbots on campus at any time. Available drinks and snacks include Pure Leaf Tea, Lifewtr, Baked Lay’s potato chips and SunChips. The little robots can move more than 20 miles on a single charge and are not hindered by rain or darkness.

Postmates also has a sidewalk robot, known as Serve. Serve can carry 50 pounds of cargo with a range of 30 miles, which Postmates estimates allows the little bot to make about one dozen deliveries per day.

Serve also includes flashing strips of LED lights that can serve as turn signals. It even has eyes that blink. Customers can video call Postmates for assistance using a small touchscreen on the top of the robot. Pricing for delivery through Serve has yet to be announced, but Postmates intends to make such deliveries at “nearly zero cost to consumers,” according to online tech news source, The Verge.

Waymo, Google’s self-driving car arm, launched an autonomous taxi service to existing Waymo users in the Phoenix metro area in early December 2018, but not everyone is onboard.

Some residents have thrown rocks at passing Waymo vehicles. Some have slashed their tires while they are parked or stopped. Others have forced the vehicles off the road. One man even pointed a gun at one of the vehicles according to Ryan Randazzo, reporter for The Arizona Republic.

Randazzo told NPR that Waymo still keeps people behind the wheel of its self-driving vehicles in case of emergency. Whatever the reason for these attacks against Waymo’s cars, they are putting real people in danger.

Kroger and self-driving startup Nuro are deploying Nuro’s R1 vehicles for deliveries from a Fry’s Food Stores unit in Scottsdale, Ariz. Kroger has been making deliveries with Nuro’s Prius fleet since August 2018, but the R1—a self-driving delivery pod on wheels—is the next step toward fully autonomous delivery.

Customers can place delivery orders seven days a week. They can schedule orders for same-day or next-day delivery for a flat delivery fee of $5.95 with no minimum order required.

Self-checkout startup Skip Checkout continued its expansion into the convenience-retail industry with Domino Convenience Stores. Domino is set to install Skip’s mobile-based checkout tool at 17 locations by January 2019.

Skip has committed to placing its checkout technology in 3,000 stores by 2019, hypothetically beating Amazon to the same target two years earlier.

DoorDash will test food and grocery delivery with autonomous vehicles from General Motors' self-driving car company Cruise by early 2019. The test is slated for an initial focus in the San Francisco market.

Amazon’s small-format stores are getting smaller. The e-retailer recently opened a 450-square-foot store inside the Seattle Macy’s Building. As with previous locations, no checkout does not mean no staff. Employees are available to answer questions and provide upkeep.

The store is currently only open to Amazon employees and guests, but the small format model could potentially provide the online behemoth an easier path to reach 3,000 stores by 2021 if that is its goal.

Finally, in a rare instance on nondisruption, the recently signed-into-law Agriculture and Nutrition Act of 2018, also known as the Farm Bill, renews the current ban on interchange fees on all electronic benefits transfer (EBT) transactions.

More broadly, the bill reauthorizes the Supplemental Nutrition Assistance Program (SNAP), commonly referred to as food stamps. More than 119,000 c-stores accept SNAP benefits, and Anna Ready, director of government relations for Alexandria, Va.-based NACS, supported the section of the bill in a statement.

“NACS commends Congress for passing sensible legislation that will place a ban on all processing fees and emphasizes the ban on interchange fees on SNAP transactions. We are pleased that Congress heeded these concerns and recognized that these fees have a negative impact on SNAP customers,” said Ready.