[+] Shop-and-Drop to Lift Retail Centre Values

While south-east Queensland might be the little-known drone-delivery capital of the world, the force driving the movement is looking for new hunting grounds. Google Wing set up shop in the Logan region in 2019, and expanded to Ipswich last year, partnering with Coles and Doordash for last-mile logistics opportunities. The 5kg polystyrene foam drones are highly automated and use a sophisticated mapping tool, reaching 110km/h and delivering packages up to 1.2kg within a 9.5km radius of their nests. Shopping centre owners including Mirvac, QIC and Vicinity have partnered with the drone-delivery service to undertake planning and delivery of landing pads for the delivery drones on their sites across Logan and Ipswich. But The Urban Developer understands that the drones will be expanding into a new region soon. And on the horizon, a slightly bigger model of drone that can carry packages up to 2.2kg may also be joining the flock. Wing is also operating in the US and Europe but all three regions are testing different markets. In the US the drone-delivery service has partnered with Walmart for big-box-retail delivery, while in Europe it is providing medicine delivery. Speaking at an Urban Land Institute event this month, Wing head of government relations and public policy in Australia Jesse Suskin said south-east Queensland had been a great launchpad for the service. Suskin said each of the three international markets provided key learnings for the other, and Australia could benefit from an enhanced offering in the future. But it was Queensland’s well-progressed drone regulations that provided a soft landing for the technology, which has certainly taken off in the outer suburbs, clocking up north of 350,000 deliveries so far. Suskin says Wing targets shopping centres surrounded by dormitory suburbs and traffic. These provide a deep pool of consumers who enjoy the convenience of Doordash delivery regularly. And for shopping centres it may seem counterintuitive. While the retail landscape of shopping centres has shifted to experience and dining, south-east Queensland asset owners including Vicinity, QIC and Mirvac are leveraging Wing as a value-add for their retailers in an omni-channel retail era. Last-mile solutions for suburban retail It’s a quick and cost-effective way to deliver to consumers and reduce friction to point of sales, while also reducing the cost of last-mile logistics. Suskin says the requirements for landing pads are relatively simple, flat open space, and access to a small amount of power. But the pay off for retail tenants is evident. “Our customers who have drone delivery, they have four times the reach, so they reach four times the customers,” Suskin says. “Logan had a real vision for this and worked with us from a planning perspective to get the first planning approval. Once that first one was done, it was a good signal for all the other [councils] that this could be done.” According to Alphabet—parent company of Google Wing—the delivery system was forecast to grow retail transactions in Queensland by up to $450 million by 2030, while saving consumers up to 40 million hours in pick-up journeys. ▲ Grand Plaza at Browns Plains is now Wing ’ s biggest drone-delivery site, with a launch pad on the roof of the shopping centre. In south-east Queensland the drone landing pads are built on underutilised spaces including rooftops of shopping centres, with a one-to-many pilot permission beyond line of sight, allowing the drones to operate outside an operator’s view of the aircraft. “We have taken the learnings from working with QIC and working with Mirvac, we’ve now used this to deploy in America. The biggest customer we now deliver for in America is Walmart. We also do it at other centres with Doordash, but this all started here in Australia,” Suskin says. SEQ testbed for retail asset owners Last year Mirvac transformed a section of the Orion Springfield Central carpark into a drone landing pad. Mirvac retail general manager Kelly Miller said it provided “another point of connection between customer and retailer” and a better shopping experience. &ldquo;We are always looking at new ways to reimagine our retail spaces to create greater value for our partners and our communities,&rdquo; Miller said. --> Wing plans to continue identifying retail properties and high-demand regions in urban areas where drone delivery can build its roost. Queensland adopted its Queensland Drones Strategy in 2018, one of the first government-led strategies in the world. The federal government followed suit in 2023. Australia’s online retail sales continue to grow, however the pace of its growth has fallen since the pandemic highs. Since the start of 2023, the e-commerce penetration rate has remained relatively steady at about 12.8 per cent, and while cost of living and inflation have bitten into discretionary spending, food and groceries remain robust. Logan ’ s Grand Plaza at Browns Plains is Wing’s biggest centre to date, with a flock of 67 drones. ▲ Home deliver service Doordash is among clients for the drone service in Queensland. Rightsizing delivery options “It’s a very efficient and very sustainable way to move a package,” Suskin says. “If you order a box of pasta, you will use more energy boiling that pasta than you will getting the pasta drone delivered.” And that delivery size could double after Wing announced its bigger model would roll out to service its clients worldwide in the next 12 months. Retail of the future Suskin says drone delivery is adding value to retail asset owners and tenants in its ability to create new economic activity. “It’s where new economic activity comes in, because they have access to it in the first place, and because [the product] is now reaching people beyond those who would ordinarily go to the shopping centre,” he says. “In due time I think we will see grocery merchants will seek out these centres because they want access to drone delivery because it’s a better way to get a package to their customers quicker and cheaper.” Suskin also believes there are other opportunities for balancing stock between shopping centres. He gives an example where you go to a store and they do not have the item you want. But it is at a nearby store and they can deploy a drone to deliver it within five minutes and significantly increase the likelihood of a sales conversion. “All of our shopping centres are about 9km from each other and that was by design,” he says. As Wing looks to take flight into other markets, its focus remains squarely on the under-serviced outer suburbs where consumers embrace the future of convenience retail. Join us at Urbanity 2024 on the Gold Coast and hear from Catherine MacGowan, vice-president of the Asia Pacific Region and Air Operations at Wisk, when she presents Autonomous Flight and the Future of Cities: Understanding the Urban Impact of All-Electric, Self-Flying vTOLs. Find out more here . You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

[+] Shop-and-Drop to Lift Retail Centre Values

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