Though many are beginning to return to restaurants, with newly vaccinated consumers eager to return to “normal” life and to create meaningful experiences in person, experts predict that the food delivery space is only going to continue to grow. In fact, PYMNTS research finds that about that the vast majority of consumers expect to maintain some or all of the changes that they have made to their ordering behavior during the pandemic. Accordingly, major delivery services are racing to provide the most efficient, reliable and cost-effective deliveries possible. To that end, Domino’s is partnering with autonomous delivery company Nuro to launch robotic delivery in Houston, Texas, according to a company announcement on Monday (April 12).
“There is still so much for our brand to learn about the autonomous delivery space,” Dennis Maloney, Domino’s senior vice president and chief innovation officer, said in a statement. “This program will allow us to better understand how customers respond to the deliveries, how they interact with the robot and how it affects store operations. The growing demand … creates the need for more deliveries, and we look forward to seeing how autonomous delivery can work along with Domino’s existing delivery experts to better support the customers’ needs.”
The launch is beginning at Domino’s 3209 Houston Avenue location in Houston’s Woodland Heights neighborhood. Customers ordering on the chain’s website can choose to have their deliveries fulfilled by Nuro’s R2 on-road delivery robot. These customers will be provided a PIN via text to collect their orders when the robot arrives at its destination. This number will open the vehicle’s doors, granting the customer access to their order.
The partnership comes on the heels of a recent announcement from Chipotle Mexican Grill that the restaurant brand had invested in Nuro as part of the company’s $500 million Series C funding round, as interest grows across the restaurant industry in finding bottom-line-friendly solutions for the typically high-cost delivery channel. For Domino’s part, company executives recently discussed on a call with analysts the chain’s intention to grow off-premises channels that would not be affected by a minimum wage increase.
The food delivery space is expected to continue to grow dramatically throughout the 2020s to make up a much larger share of total food spending. In the last 13 months especially, consumers have come to expect the convenience and immediacy of restaurant meals brought directly to their door. However, for now, the economics of the model remain broken, with the costs, especially the labor costs, making it difficult for any of the parties involved to see significant profits. Autonomous vehicles that offer restaurants the promise of delivery without the costs associated with employing a team of drivers offer a promising solution in this competitive space.
“Will delivery ever be 80 percent of all food now? Probably not,” Luke Schneider, CEO of autonomous delivery startup Refraction AI, told PYMNTS in an interview. “But does it belong in the respectable double digits? Absolutely. And will we see a double-digit compound annual growth rate for it? No question, in my mind.”
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