What Retailers Should Be Thinking About Self-Driving Cars
Ride-share company Lyft is conducting an experiment with technology company Aptiv in which real customers are taken on their Lyft rides in vehicles that drive themselves. I am in Las Vegas for the fashion trade shows Project and Magic and that’s where Aptiva and Lyft are conducting their tests. Yesterday I rode in the self-driving car pictured above.
The ride itself is uneventful but for the fact that no human is driving. The car goes, stops in traffic and at red lights and changes lanes using its own autonomous decision-making. It doesn’t feel strange until you think about what’s happening. In the tests, two people from Lyft and Aptiv sat in the front and monitored the car, ready to take control if they need to. It doesn’t feel scary.
There are a lot of ways in which things will change when self-driving cars become commonplace. I’m going to focus on some of the impacts for retail and consumers.
A great deal has been said about supply chain and how to give consumers what they order with the fastest possible delivery times. Of course, self-driving cars will make it much more possible to deliver products faster. Conceptually, it’s like the robots in a distribution center that bring the products to the pickers to put into a box. It’s as if those robots go right to the consumer and let them pick it out of the bin by themselves. The distribution center is extended to be…everywhere. Autonomous cars will make brick-and-mortar stores even less necessary and that will mean stores will have to be evermore compelling to get consumers to come in. It will accelerate the trend we are already seeing of stores needing to be entertaining in order to perform financially.
A lot has also been said about all the drivers that will be put out of work. That conversation make sense but I don’t believe it and here’s why: When I was a young man, almost everyone I worked with, including myself, had a secretary. Today, almost no one does. From 2001 to 2006, according to the Bureau of Labor Statistics, 865,000 secretaries (what it calls “office and administrative support occupations”) lost their jobs. From 2007 to 2013, 1.6 million more secretaries lost their jobs, too. And yet, you’ve never heard of a homeless person with a sign that says, “Please help. I was a secretary.” The nature of technology is that as it develops there is displacement that hurts groups of people but overall, it creates as much or more opportunity as it destroys. New jobs develop and people learn what they need to for those new jobs. The same will happen with the driver that brings your Amazon packages to your home. I’m not saying it will be easy for them, it won’t be; losing a job to technology is degrading, hurtful and has enormous personal consequences that can last for years. But the impact on society will be like other technological advances we have seen.
I can’t say whether the Aptiv/Lyft experiment will work and what it will lead to. Mark and Lance, the staffers who were monitoring the car I rode in, were very circumspect about the timing of commercializing this technology. A great deal will change in the world when self-driving cars are ubiquitous. But for retailers, it won’t save anyone that couldn’t be saved before, it will accelerate the trends we’re seeing now. The retailers who get consumers to identify with them and share their values will succeed. That will remain true no matter how the packages get home.
My firm, Triangle Capital LLC, does mergers, acquisitions and capital-raising for consumer-related businesses. If you’re interested in that we should talk.