Impact of Emerging Technology: Drones in the Retail Sector

This report explores the impact of emerging technology, specifically drones, on the retail sector. It discusses the advantages and disadvantages of using drones in retail, as well as the potential future implications for organizations like Amazon. The report also provides recommendations for retail managers to maximize the benefits of drone technology.

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Running head: EMERGING THEMES

EMERGING THEMES
Contents
Introduction......................................................................................................................................2
Task 1...............................................................................................................................................3
Task 2...........................................................................................................................................7
Task 3...........................................................................................................................................9
References......................................................................................................................................10
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EMERGING THEMES
Introduction
There are various themes which are emerging in the current competitive business environment
therefore organizations must focus on utilizing the emerging themes in order to gain a
competitive advantage in the market over their competitors and also to increase the scope of
operations of the business organization. According to Anghel et al. (2015) there are four pillars
of emerging themes namely emerging technology which highlights growth and development of
new and innovative technological advancements, emerging societies which highlights the growth
and popularity of new forms of society, emerging industry and market which highlights the
growth and popularity of various new sectors and markets in an economy and emerging work
environment which highlights the growing popularity of new kinds of working environment in
context of business organizations. All the above stated pillars act as basis for emerging themes
for business organizations.
The article provided in the case study focuses on emerging technology in the form of drone
technology. Drone technology has become one of the most popular emerging technologies which
every sector is focusing to utilize in order to gain a competitive edge in the sector in which they
operate as it is widely evident that use of drone help in increasing the efficiency of the
organizations by reducing costs and increasing productivity. The article highlights on the point
that use of drone technology in various sector could contribute to the increase of Gross Domestic
Product by £42 billion. The article also estimates that by 2030, there would be £ 16 billion in net
cost savings in the UK economy due to the widespread popularity of drone technology. The
article also estimates that there will be approximately 76,000 drones which will be operating in
the skies of UK due to widespread application of drones in multiple sectors and the article
projects that there will be approximately 628,000 jobs which will be generated in UK alone due
to the drone economy.
The current report focuses on the identification of impact of emerging technology on the retail
sector and on the organizations belonging to the retail sector. The report also focuses on the
identification of advantages and disadvantages of the emerging drone technology. Further the
report focuses on the potential futuristic effect of drone technology on the organizations
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EMERGING THEMES
belonging to the retail sector and accordingly provides recommendations for managers of retail
organizations to mitigate against or maximize the identified impacts on the retail sector.
Task 1
1. The emerging theme which has been highlighted in the article is emerging technology in
the form of drone technology. As stated by Lee (2015) drones or unmanned aerial vehicle
has become a disruptor in every sector in which it is being implemented and application
of drone technology specifically has helped business organizations belonging to retail
sector to increase their efficiency and profitability by enabling cost savings and reducing
defects and in-efficiencies. The application of drones in retail sector eliminates the
chances of human error and also promotes workplace and worker safety. Further
application of drones enables human workforce of retail sector to focus on increasing the
values of their products and services which drives the sales of their product and service.
According to Elliott, Hall and Meng (2013) drones are expected to play a vital part in the growth
and expansion of the global retail sector in the coming years. The existent competitive pressure
which is observed in the global retail sector have driven them to invest and develop new and
innovative ways in order to make their supply chain more efficient in nature and therefore the
retail sector has turned their attention to utilize the opportunities offered by drone technology to
cope up with the competitive pressure. The largest global retailers and e-commerce giants are
turning to drones in order to improve the efficiency of their supply chain.
2. According to Dow Jones Institutional News (2017) in the global retail sector, there are
huge economic impacts due to the application of drone technology or drones as it results
in lower costs and improved productivity in the retail sector. The retail sector uses drones
in order to automate routine day to day tasks which helps in improving safety and
performance, reduce risks associated with the day to day tasks, helps in improving the
quality of products and services offered by the retail sector and also helps in freeing up
the human resources in order to make them focus on more interesting and value adding
tasks which help in driving customer values. There are various impacts of using drones
which has been identified in the retail sector which are as follows:
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Impact on distribution centre and inventory management facilities- As stated by Dow Jones
Institutional News (2015) with the rapid increase in consumer expectations and increase in
competition regarding slick supply chain solutions, the competitive advantage is gradually up for
grabs in the retail sector through the tightening of inventory management and category
management systems. As stated by Dumitru et al. (2015) working from a single inventory pool
for all channels, drone technology is considered as one of the most vital enabler in the goal for a
seamless online and offline experiences. The use of drones in warehousing and storage facilities
enables the reduction of number of employees required at each location which in turn allows
retailers to cut their costs. The speed which is being offered by drone technology helps in the
creation of automated and more efficient supply chains. As stated by Lewis and Loker (2014) for
retail companies with a large number of distribution centres and large number of super centres,
drones help in increasing the efficiency of each of their centres and facilities.
Impact on site selection and facility planning- As stated by PR Newswire (2016a) drones are
already being used widely in the retail sectors which enables the developers to explore a large
portion of warehousing site aerially and in turn helps in preparing planning maps which are more
precise in nature. Also the retail sector have started to take the help of drone technology for
selecting sites, for store planning purposes, for effective designing of shopping centre and in
order to monitor all the aspects of development of a retail location in a more effective manner.
Impact on retail securities to patrolling properties-As stated by Aloysius et al. (2018) security is
one of the vital areas which are being explored by drone technologies. In the retail sector drones
are used for security and patrolling purposes as it allows secured parking area to the customers
visiting the shopping centre or retail outlets and it also helps in monitoring of shopping centres
and interiors of stores at any time of the day by professionals working in off-site location.
Impact on consumer insights- Multiple studies have indicated that most effective and fittest retail
strategies are those which are being based on strong consumer insights and as a result drones
have changed the way in which retailers collect consumer insights which have helped them to
develop effective retail strategies. Retail organizations have been monitoring footfall in their
locations but the use of drones have enabled retailers to measure traffic and flow of customers
beyond their stores. Drones also help retailers to assess the pattern of movement of vehicles
towards their stores and also help in assessing whether their customers gets fed up with the
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congestion in the parking area or outside the store locations so that they can take actions to
ensure that the customers reach the store in the most convenient and hassle free manner.
As stated by Chiu and Hofer (2015) in order to measure the flow of customers towards their
store, various organizations belonging to the retail sector are also flying drones above their retail
locations for collecting data and insights regarding the effectiveness of the signage, the
positioning of entrances of retail stores and to measure impact of traffic and other factors in the
surroundings as in the age of Omni channel and ecosystem retailing, pre-sales is considered as
vital as post sale. Therefore, the data and insights which are received from drones have a
significant impact on the bottom line of various organizations belonging to the retail industry.
Impact on energy efficiency- Various retailers, shopping centres and other retail facilities use
thermal cameras on their drones which helps in increasing their energy efficiency and which
enables retail organizations to save money and also enables them to support and promote a
greener retail industry.
3. The impacts of emerging technology such as drones on retailers such as Amazon are as
follows:
Stock and Inventory- As stated by Gordon Crovitz (2016) retailer like Amazon uses drone
technology for the management of their stock and inventory as the drones makes it more feasible
for warehouse to build upwards instead of outwards so that they can reach to higher levels. Also
drones are able to locate items in the warehouse in a more effective manner due to exact
understanding of floor layout. The drones also help in refilling items in particular shelves of the
company which are detected to be stocked at lower levels.
Delivery- retailer like Amazon uses drone in order to deliver products to the customers at their
doorsteps. The drone delivery is very fast form of deliver as the product does not require delivery
through traffic congestions.
Security- retailer like Amazon also utilize drones to ensure security of products in the warehouse
and distribution centres as human security and surveillance cameras are not adequate for
preventing theft and therefore the mobile nature of drones helps in ensuring security of products.
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4. The merits of using drone in the retail sector are as follows:
It helps in saving time- According to Inman and Nikolova (2017) drones are considered very
convenient for retailers who want to save time as drones help in saving a significant amount of
time in context of logistics delivery, collection of data and insights, clicking of real time
photographs or getting real time updates of various situations. Drones helps in saving time as
they cover a large amount of area in a very short span of time.
Used as logistics- As opined by Aloysius, Hoehle and Venkatesh (2016) various retail companies
and online retailers are taking advantages of drones for logistics purposes. A large number of
online retail companies use drones to deliver their products to customers at a very short span of
time and in a very efficient and systematic manner.
Drones require lesser efforts- As stated by Thurlow (2015) in terms of retail industry it can be
stated that retail organizations require lesser effort in terms of supervision and maintenance. It
requires very limited human interference to control drones and hence they can be very easily and
conveniently handled with limited human need and hence it can be said that drones requires
lesser efforts.
Versatility- Drones can be used for a variety of operations and utilities in the retail sector such as
delivery, warehouse management, consumer insights, security, site selection and facility
planning and therefore a single technology can serve multiple purposes for the retail sector.
Creation of jobs and opportunities- As stated by Ecn (2016) the popularity of drone technology
has resulted in the creation of multiple job and employment opportunities in the retail as the
sector requires various experienced and qualified human resources who have knowledge in
operating drones.
Helps in promotion of safety- As stated by PR Newswire (2016b) drones are fully capable of
reducing human involvement in various day to day tasks in retail organizations and therefore
drones helps in preventing and avoiding the risks of accidents which can occur due to human
involvements. Drones help in undertaking various risky and accident prone activities and thus
help in promotion of safety.
The demerits of using drones in the retail sector are as follows:
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Shorter lifespan-As stated by Romero and Martínez-Román (2015) the lifespan of drones are
considerably less than other photographic or recording devices owing to their shorter battery life.
As drones are meant to fly, the size of the battery of the drone remains less which results in
lesser battery power. It is typically observed that on full charge an average drone can function up
to four hours whereas the lifespan of other photographic and recording devices are comparatively
larger than drones.
Vulnerable to aerial attacks- It is observed that drones remain vulnerable to various aerial attacks
such as attacks of birds, clash with other flying objects and entanglement with branches of trees
or nest of birds during unfavourable weather conditions and therefore utmost care should be
taken while flying drones.
Threat of hackers- Drones also remain vulnerable to attack from hackers as they can invade the
main control system of the drones replacing the original users of the drones with the new drivers
and controllers of the drones. The network and control system of the drones comprise of vital
insights and information which are susceptible to hackers without the knowledge of the actual
user of the drones.
Privacy issues-As opined by Guillot (2015) drones are acting as catalyst regarding privacy
concerns that has been already created due to similar modern technologies such as video cameras
and enhanced satellite images. As drones are capable of moving to any locations and capture
images and videos of the highest qualities, therefore many individuals perceive drones as a threat
to their personal privacy.
Legal issues- Various government organizations and regulatory bodies have set various rules and
regulations regarding the private and professional use of remote controlled drones but there are
still various controversial areas which remain unsettled and therefore there still remain various
unresolved areas regarding the use of drones.
Task 2
The potential futuristic implications regarding the use of drones in retail organizations such as
Amazon in various contexts are as follows:
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EMERGING THEMES
Organizational Objectives- The organizational objectives of Amazon mainly focuses on
improvement of the supply chain efficiency and investment of significant amount of funds in
research and development regarding enhancement of drone technology to improve customer
delivery. The organizational objective of Amazon is also to increase the productivity of the
company by reducing costs.
Operations and Practices-According to Wells and Stevens (2016) the operations and practices of
Amazon are more automated in nature with lesser number of human involvement as human
resources of the company mainly concentrate on enhancing customer values and benefits and
their day to day operations are largely controlled by drones.
The economy-As opined by Rao and De' (2015) the economy will grow and develop at a more
faster rate owing to high job opportunities which have been created due to the implementation of
drone technology in the day to day operations of Amazon. The economy is also projected to
grow at a faster rate due to widespread usage of drones in the company as it aims to cost
reduction which help to increase productivity and efficiency and in turn lead to greater gross
domestic product of the country where Amazon operates.
The society- The society has become greener and sustainable in nature owing to adoption of
green practices by Amazon. Also it has led to economically sustainable society due to adequate
income opportunities and owing to development of local community.
The industry/sector-As stated by TWICE (2017) the retail companies like Amazon will become
more competitive in nature and it will become one of the largest contributors to the gross
domestic product of the country to which they belong. The retail companies like Amazon will
contribute to majority of net cost savings of the economy to which they belong and will also
provide a large percentage of employment opportunity to the economy.
Customers-As opined by Guthrie (2016) the customers of Amazon receive faster delivery at their
door steps within a very short time span owing to faster drone delivery system. The customers of
the company also get high quality personalised service experience owing to higher availability of
consumer insights due to drone system applied at Amazon.
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EMERGING THEMES
Government-The government has come up with various new regulations, restrictions and
legislations regarding the usage of drones in the day to day operations of Amazon and therefore
in order to continue the usage of drones, the company needs to cope up with the regulations and
restrictions imposed by the government of the country.
Competitors- The competitors of Amazon such as E-bay and Alibaba continue to explore other
emerging technologies and technological advancements in order to compete with Amazon in the
market and hence to gain competitive advantage Amazon continues to invest heavily in research
and development of other disrupting technologies.
Any other relevant stakeholders-As opined by Najib Razali et al. (2014) the other relevant
stakeholders of Amazon, such as their existing employees, will focus more on value creating
activities of the company in order to offer more values to the customers so that they remain loyal
to the products and services of Amazon.
Task 3
The recommendations for the managers of Amazon in order to maximize the impact of drones
are as follows:
 As opined by McKenzie, Burt and Igor (2018) managers should primarily focus on
educating and training the employees of Amazon regarding the potential of drones and
also regarding the risks which are associated with drone technology so that they become
aware of the disruptor technology and operate accordingly.
 In order to reduce privacy risks, managers should ensure that their drones are provided
with adequate cybersecurity measures in order to prevent them from getting hacked by
others.
 Managers should focus on complying with the governmental restrictions and regulations
regarding usage of drones so that they do not create privacy concerns.
 As stated by Pantano, Constantinos and Dennis (2018) managers can also focus on using
drone technology in order to survey buyer behaviour and pattern during times of
purchases which can help in the development of marketing strategy based on the real time
view of consumer buying behaviour and pattern.
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EMERGING THEMES
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