ARK previously estimated that, given regulatory approval in the US, an Amazon drone could deliver a package in less than half an hour profitably today for $0.90, cutting the cost of domestic shipping by roughly 90%.
Adjusting for our updated assumptions, particularly the efficiency of autonomous flight and the amount of human intervention, ARK now estimates that parcel drones could deliver packages profitably for only $0.25. Given frictionless and inexpensive delivery, consumers probably would buy many more goods online, growing ecommerce’s share of retail sales from 14% in 2019 to 60% in 2030, with drones delivering more than half of the ecommerce volumes, as shown below.
ARK expects inexpensive parcel drone delivery to change consumer shopping behavior. Promotions with free shipping tend to increase the size and number of orders. Indeed, with free two-day delivery, Prime customers spend twice as much on Amazon than do non-Prime customers. If drones could deliver packages in fewer than 30 minutes for less than $1, as we believe will be likely, the shift to online shopping would accelerate.
Pending regulatory approval, revenue from parcel drone delivery could total $113 billion by 2030, as shown below. At roughly $4 per parcel today, traditional delivery generates roughly $280 billion in revenues.[1]
“DRONES WILL CHARGE OUR LIVES!“ Cathie Wood
