---
title: "Express Delivery Series: The Next-Generation Retail Format That Will Eliminate Supermarkets and E-commerce"
description: "This article explores how drones and autonomous driving could replace manual delivery, reducing costs and increasing speed, and argues that if express delivery costs drop to 1-3 yuan and delivery time to 10-30 minutes, it will become the mainstream shopping method, reshaping retail and creating a comprehensive express delivery platform that will surpass supermarkets and e-commerce."
author: "张陈勇"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2017-07-07"
language: "en"
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# Express Delivery Series: The Next-Generation Retail Format That Will Eliminate Supermarkets and E-commerce

> This article explores how drones and autonomous driving could replace manual delivery, reducing costs and increasing speed, and argues that if express delivery costs drop to 1-3 yuan and delivery time to 10-30 minutes, it will become the mainstream shopping method, reshaping retail and creating a comprehensive express delivery platform that will surpass supermarkets and e-commerce.

**Click the image for details**
Over the past few months, I've been thinking: as technology matures and becomes widespread, will drones and autonomous driving replace manual delivery? If delivery costs drop significantly and speed increases, how will the retail industry change?
This article presents three viewpoints:
1. If express delivery costs drop to 1-3 yuan and delivery time improves to 10-30 minutes, express delivery will become the mainstream shopping method.
2. Drones and autonomous driving will gradually replace manual delivery, significantly reducing costs and increasing speed.
3. If express delivery becomes the mainstream shopping method, the retail format will be reshaped, and a comprehensive express delivery platform will eliminate supermarkets and e-commerce, becoming the largest commercial company.

The Era of Express Delivery
So-called express delivery means that after a customer places an order, delivery arrives within 10-30 minutes. Currently, some orders from Ele.me, Meituan Waimai, Baidu Waimai, and Hema Fresh can achieve delivery speeds of around 30 minutes.
Although the total daily orders of the above platforms exceed ten million, compared to overall retail, their market share is still very small. The cost per express delivery order is 8-12 yuan (including site and management allocation). Overall, current express delivery orders are mainly fast food, and their prices are higher than dining in-store.
If drones and autonomous driving mature and become widespread, and machine delivery replaces some manual delivery, reducing express delivery costs from 8-12 yuan to 1-3 yuan, and delivery time from 30-45 minutes to 10-30 minutes, what would happen?
The author believes that if express delivery costs drop significantly and delivery speed increases, for consumers, choosing express delivery will be more cost-effective and convenient than going to the store. Then fast food, convenience stores, supermarkets, e-commerce, and some specialty stores will be impacted and reshaped, **and the retail industry will undergo earth-shaking changes.**
Convenience stores, hypermarkets, and e-commerce platforms are currently the most mainstream retail formats, but they are not perfect. Hypermarkets are not convenient enough, convenience stores lack variety and value, and e-commerce platforms are slow in delivery. The next-generation mainstream retail format that replaces them should combine convenience, variety, and affordability (efficiency). It should be more convenient than convenience stores, more varied and affordable than hypermarkets, and faster with lower minimum orders than e-commerce platforms.
**Choosing better is human instinct.** If express delivery is more convenient and affordable than in-store shopping, consumers will naturally choose express delivery more often and abandon in-store shopping.
The author believes that if express delivery costs drop to 1-3 yuan, speed improves to 10-30 minutes, and almost any product can be purchased, express delivery will become the mainstream shopping method. Its categories will expand from fast food to all products that do not require on-site experience, and daily orders will increase from the current ten million to hundreds of millions, or even over a billion.

Breaking Through Barriers
Some say drones have short battery life and cannot fly indoors, autonomous delivery vehicles cannot go upstairs, and safety is hard to guarantee, so machine delivery is not feasible. The author believes these problems can be solved, as briefly explained below.
Regarding the issue of drones not being able to fly indoors, indoor delivery can be completed by delivery personnel distributed in the delivery area. **The number and location of delivery personnel are calculated and allocated by big data.** Drones deliver goods to the delivery personnel, who then use balance vehicles to enter buildings and deliver to the door. This way, manual delivery is only needed for the last 20 meters (going upstairs and indoors), reducing delivery costs and increasing speed.
If customers are willing to receive goods outdoors, or allow drones to fly in through windows, or install automatic receiving boxes on windows, then these customers can enjoy lower delivery costs and faster delivery speeds. Such households will increase, **gradually completely replacing manual delivery.**
One major problem with drone delivery is short battery life, which requires breakthroughs in battery technology. Currently, various global institutions and companies are researching battery technology, and fast-charging technology is one of the results. **Once battery technology breaks through, not only will the battery life problem be solved, but safety issues can also be addressed.**
Safety issues mainly refer to potential hazards if a drone malfunctions during flight or is deliberately attacked. If battery technology improves, drones can carry backup batteries and parachutes to prevent various safety risks. Cameras with automatic locking can also detect malicious saboteurs, greatly reducing the probability of intentional damage.
**Besides drones, autonomous driving is also a solution for machine delivery, with a similar principle as above.** Currently, autonomous vehicles are legally on the roads in some areas, having already driven millions of kilometers without accidents. Autonomous delivery vehicles will definitely appear and become widespread. These vehicles can take elevators and deliver goods to the doorstep, where customers use verification codes to open the cargo box and retrieve their items.

Comprehensive Express Delivery Platform
The author believes that in the era of unmanned delivery, it is not about adding express delivery services to current mainstream formats, but rather a completely new retail format will emerge, and the entire retail ecosystem will be reshaped.
Taking Hema Fresh as an example, to achieve 30-minute delivery, its differences from traditional supermarkets are as follows:
1. Its ERP system includes location management and WMS functions, supporting multiple picking methods;
2. Stores have added conveyor belts for order fulfillment, RF guns, and cash registers distributed in multiple locations;
3. The back warehouse area is larger, with online order consolidation functions, and some high-frequency items are picked in the back warehouse;
4. Product structure has changed, with more SKUs for fresh produce, semi-finished products, and cooked food than traditional stores, and fresh products are packaged for sale;
5. Fresh and cooked food are linked, store and warehouse are integrated, and cash is not accepted;
Hema Fresh stores differ from traditional supermarkets. **All processes have been redesigned according to express delivery needs. Express delivery will reshape the store's product structure, systems, layout, software and hardware, and organizational structure, creating a new format.**
The author has led a store delivery project and tried picking and delivery. Without the above support, picking time per order exceeds 10 minutes, and errors due to inaccurate inventory and picking are over 20%, greatly affecting customer experience.
**The author believes that the first characteristic of the "comprehensive express delivery platform" is self-operated stores as the core.** Self-operated stores like Hema Fresh are the foundation of the future comprehensive express delivery platform.
The "comprehensive express delivery platform" is the mainstream retail format in the express delivery era. It consists of three parts: **self-operated stores, partner merchants, and an e-commerce platform**, as explained below.
Self-operated stores refer to stores like Hema Fresh that support both online and offline shopping scenarios. **Why are express delivery orders shipped from stores rather than regional warehouses? Because stores have marketing and traffic-generation functions, and because consumers have a need for offline shopping experiences.**
Express delivery services cannot dominate everything. Humans have a need for offline experiences, and the offline stores of the comprehensive express delivery platform can meet this need. The foot traffic at Hema Fresh stores is higher than at traditional supermarkets, indicating that online services do not divert offline traffic but rather promote each other, deepening customer impressions and keeping customers in a closed loop of online and offline.
The cost of express delivery services is determined by order density, which is related to traffic-generation ability and consumer awareness depth. Physical stores are better at generating traffic and deepening consumer awareness than warehouses. Additionally, it is difficult to find suitable warehouses in cities. Supermarkets in malls have low rent because of their traffic-generation ability. Currently, supermarket rent in Shanghai is about 2.5 yuan per square meter per day, which is lower than ordinary residential rent.
Customer needs are not just speed; product variety and store awareness depth also affect customer choices. Only stores like Hema Fresh can simultaneously meet the four major characteristics of **strong traffic generation, strong product endorsement, high product variety, and fast delivery.**
In summary, the author believes that **the first foundation of the comprehensive express delivery platform is new-format stores,** with Hema Fresh as a reference.
"Partner merchants" means that on the APP, customers can not only purchase products from self-operated stores but also from merchants near the store that have joined the APP, just like restaurants join Ele.me. **Different products suit different sales methods. Some branded non-standard products and long-tail products are more suitable for C2C sales.**
Fast food, convenience stores, supermarkets, and fresh produce are high-frequency categories. Integrating them and lowering the shopping threshold, with delivery in 10-30 minutes, will make the ordering APP a high-frequency application, and the awareness of shopping through this APP will be strong.
High frequency eating low frequency is the basic logic. As long as customers use the comprehensive express delivery platform APP frequently, launching B2C half-day delivery similar to JD.com and a C2C open platform similar to Taobao on this APP will gradually attract customers and capture the e-commerce market. This is the third component of the "comprehensive express delivery platform": the "e-commerce platform."

Summary
This article mainly presents three viewpoints:
The first viewpoint is: if express delivery costs drop to 1-3 yuan and speed improves to 10-30 minutes, express delivery can become the most mainstream shopping method.
The second viewpoint is: drones and autonomous driving will gradually replace manual delivery, significantly reducing costs and increasing speed.
The third viewpoint is: if express delivery becomes the mainstream shopping method, the retail format will be reshaped, and a "comprehensive express delivery platform" will emerge, consisting of self-operated stores + partner merchants + e-commerce platform.
The "comprehensive express delivery platform" is more convenient than convenience stores, more affordable than supermarkets, and faster than e-commerce platforms. Therefore, it can capture the market of fast food, convenience stores, supermarkets, e-commerce, and certain specialty stores. Its market space is far larger than that of the current largest retail enterprises. It represents the future direction of retail development and deserves attention and consideration from retail colleagues. Readers interested in this topic are welcome to add the author's WeChat for discussion.
**Official account: 老张聊零售 WeChat: zcyshow**
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