Wall Street Journal tech and autos reporter Tim Higgins on earnings season, the outlook for Facebook, the IPO market and Tesla.
With all the online shopping for the holidays now joining the “Ghost of Christmas Past,” the projection for e-commerce for 2020 would put a smile on Ebeneezer’s Scrooge’s face.
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The e-commerce industry’s total revenues will reach a whopping $3.52 trillion next year according to a new report from global tech market advisory firm ABI Research.
ABI’s ’54 Technology Trends to Watch in 2020’ list and it was those e-commerce numbers that jumped off the pages. The projected revenue increase of 19 percent year-over-year in 2020 compared to 2019 stems from developments and growth in different markets from urban to the rural areas, according to Susan Beardslee, Freight Transportation and Logistics Principal Analyst at ABI Research.
“This growth depends on ever faster and more convenient modes to reach the final mile and yard in suburban and urban markets, as well as share in rural areas,” Beardslee stated in the report.
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However, don’t count on driverless trucks as being one of those technologies that make it to the “last mile” in 2020.
The driverless car called Snuber, front, is test driven during a demonstration at the Seoul National University’s campus in Seoul, South Korea, Tuesday, Nov. 15, 2016. Seoul National University professor Seo Seung-woo said that a self-driving car dev
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While car manufacturers like Tesla dive deep into the development of driverless, self-driving vehicles, the technology is still very raw and is far from close to commercial use. And while driverless delivery trucks would be a dream-come-true for the e-commerce industry, Beardslee pointed out that it won’t be happening anytime soon, and certainly not in 2020.
“Despite numerous headlines declaring the arrival of driverless, self-driving, or robot vehicles, very little, if any, driver-free commercial usage is underway beyond closed-course operations in the United States,” Beardslee noted, “Despite the successful primarily manned testing and early revenue operations, there are no known regulatory approvals or fully autonomous methods to address the first and last mile for heavy-duty big rigs through challenging urban and suburban locations,” Beardslee added.
The study notes that successful, revenue-generating delivery routes will remain highway-only “for the foreseeable future,” with ABI Research estimating Level 4, lower-level automated delivery shipments won’t be hitting North American roads until at least 2023, according to the report.
And fully-automated Level 5 (larger shipment hauls) is forecasted to be viable in the not-so foreseeable future as the artificial intelligence necessary for such a task is still in its infancy of development, API’s study reports.
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Still, it is the rapid growth of the e-commerce industry by companies like Amazon, eBay and brick and mortar retailers offering products directly to the customers online, has forced the transportation industry to catch up in an effort to meet the growing demand.
These industry changes include increases in one-day delivery as well as a seven-day-a-week delivery starting in 2020, all to reduce “click-to-door” time and address the issue of the “Amazon effect,” which “is the ongoing evolution and disruption of the retail market, both online and in physical outlets, resulting from increased e-commerce. … The major manifestation of the Amazon effect is the ongoing consumer shift to shopping online,” according to WhatIsIt.com.
In 2019, Amazon was forced to invest more money and resources into its next-day Prime delivery service to meet the growing consumer demand, using its own delivery service and expanding shipping options as well, according to the results of API’s study.
“Amazon already felt the financial pressure in 2019, with North American margin compression, as it grew investments in its next-day Prime delivery, expected to impact Walmart as well. Other retailers have been pushed into offering expanded shipping options and reverse logistics in order to compete,” Beardslee said.
