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SEATTLE – On Sunday evening Jeff Bezos, CEO of multinational e-commerce company Amazon.com (NASDAQ:AMZN), said on CBS News' 60 Minutes television show that his firm is experimenting with delivering its products using drones. Called "Prime Air," the door-to-door flying delivery system will deliver packages into customers' hands within 30 minutes using unmanned aerial vehicles. Prime Air delivery is ready for takeoff as soon as its airborne technology receives approval from the Federal Aviation Administration, the company states.
Skeptics are wondering out loud if Amazon's drone announcement is part of a giant public relations hoax to gather buzz for its brand.
Already used by the military with large-scale models and by hobbyists with small-scale ones, drones could migrate to American businesses. In fact the FAA right now is working out the right approach and rules for commercial unmanned aerial vehicles that ensure the safety of the American public. USA Today reports that FAA Administrator Michael Huerta actually "released the five-year road map a month ago. It projected 7,500 unmanned aircraft would be in the skies within that period if regulations are in place."
"One day, Prime Air vehicles will be as normal as seeing mail trucks on the road today," declares Amazon on its web page introducing the soaring service.
Would quick service restaurant owners be part of the first wave of commercial delivery drones?
Fast food is already beginning to take advantage of the buzz, albeit light-heartedly. On Wednesday, KFC tweeted tongue-in-cheek, "There's been a lot of talk about drone delivery. Don't fret, we're thinking the same thing." With hashtag "WhenChickensFly," the chicken restaurant brand attached a photo of a bucket of chicken being delivered by a drone.
But Bob O'Brien, global senior vice president for foodservice researcher The NPD Group, is cautious about the efficacy of drone-delivered pizzas, or even buckets of chicken. "I can't think of it in a way that makes a lot of sense," he tells Blue MauMau. In his blog he writes, "It would have to cost the restaurant less than it costs to have people use their own vehicles."
Restaurant industry analyst and NPD colleague Bonnie Riggs remarks that quick service restaurants could actually save owners in labor costs by using drones, "especially if the minimum wage goes up." She recalls how a pizza chain had high liability costs from its drivers racing their cars through traffic to deliver on the brand promise to deliver pizza within 30 minutes. "Liability insurance for labor could also go down if unmanned drones were used," she observes.
However, Riggs wonders if a flying machine delivery service by its very impersonal nature compromises the relationship between brand and consumer. She says, "Part of the brand promise with Jimmy John's, for example, is delivery with a human. It's part of the customer experience." After all, drones do not smile.
O'Brien interjects that the need for dedicated and qualified pilot vendors would likely have franchise owners use a drone delivery service vendor. "There would be dedicated companies that own and run drones for all sorts of delivery purposes: auto parts, groceries, plumbing supplies to sites, medical supplies, blood tests…anything where there is on-demand need for products," perceives O'Brien. "But the chains would lose control of the customer experience."
Drones already used by hotel owner and franchisee vendors
It's not just a pipe dream. Drones are already being used for commercial purposes to service franchise owners.
Joe Smith, founder and general manager of FreeHotelCoupons.com, uses a surveillance drone to take aerial photos and videos of hotel properties from San Diego to Florida, which are used to attract more hotel guests. FreeHotelCoupons uses the aerial videos to highlight the site, while offering coupon discounts to guests.
Smith uses a hobby drone that carries a camera on the bottom. "For costing me just a couple of hundred bucks for the cost of the machine, our drone saves us and our clients a lot of money," says the creator of FreeHotelCoupons.com. Smith says that leasing a boom to hoist a camera for aerial photos can be quite expensive.
As far as danger to the consumer, Smith says that a foam frame protects the person and the drone if it accidentally bumps into someone. "Kids fly these drones in the house," he says.
The founder of FreeHotelCoupons.com says he operates his drone from an app in his iPhone and iPad. "It's like playing a video game," says Smith.
He thinks there are industries that could benefit from using drones, but they haven't stepped in yet. "I'm surprised roofers haven't done more with this," he says of roofing contractors that have to look at the tops of buildings to assess roof damage and give repair cost estimates before being approved to work on a project.
Still, Smith comments that the drone has limits. On windy days or when the weather is poor, he doesn't take video shots with his drone.
Drones may be good for shooting videos, but restaurant analysts wonder about the practicalities of transporting goods using drones. NPD's O'Brien observes, "Amazon, I believe, described the drone delivery project as one of the 'moon shot' projects. As such, it is as much a thought experiment as it is a working project."
Read the full interview with Joe Smith, creator of FreeHotelCoupons.com