Vicinity advances distribution strategy with drone delivery

In a world-first, Vicinity Centres has partnered with Wing – an Alphabet company – to pilot a new delivery model, flying goods from shopping centre rooftops directly to Australian customers.

Vicinity and Wing have been piloting the world-first service from the rooftop of Grand Plaza shopping centre in Logan, Queensland since mid-August 2021, completing more than 2,500 contactless deliveries to customers in nearby suburbs including Regents Park, Heritage Park, Park Ridge, Browns Plains, Marsden, Crestmead, and Berrinba.

Available within suburbs surrounding Grand Plaza, customers are able to order from the centre’s participating businesses – Sushi Hub, Boost Juice, Chatime, and Terry White Chemmart – receiving deliveries in minutes.

Vicinity’s Chief Innovation and Information Officer, Justin Mills, said the exciting new partnership formed an important part of Vicinity’s distribution and fulfilment strategy and helped retailers unlock the value of their physical store to optimise omnichannel retail.

“Research by Vicinity’s Data Science and Insights team and Quantium shows 71% of Australian retailers have adopted an omnichannel approach, and physical retail is critical to that success, driving an uplift in online market share of up to 40% from customers who live nearby,” said Mr Mills.

“The drone delivery service will help our retailers drive incremental sales, leveraging the value of their physical store and attracting new customers to engage with the centre. It also helps solve delivery-based pain points identified in our customer research.

“Our partnership with Wing is a natural extension of our distribution and fulfilment strategy which will help retailers use physical stores and our shopping centre network to get their products into customer hands quicker and more efficiently.”

This pilot delivery program is the latest project in Vicinity’s distribution and fulfilment strategy, targeted at improving the omnichannel experience of retailers and customers, and enhancing efficiency.

With almost 17m Australians (66% of the population) living within 30 minutes of one of its 61 strategically located centres, Vicinity is well-placed to rapidly scale up its drone delivery partnership and provide a solution to the challenges and the financial and environmental costs of last-mile delivery.

“The retail industry is changing, and Vicinity is employing a test and learn approach in areas critical to the role of Australian shopping centres in the future. We believe this partnership with Wing will be an important component of our overall distribution and fulfilment strategy and support our new growth strategy,” said Mr Mills.

“Exploring new technologies like drone delivery means our retailers may provide customers with game-changing product deliveries in minutes rather than days, while also reducing their carbon footprint.”

Wing Australia Head of Policy and Community Affairs, Jesse Suskin said, “We’re delighted to explore this new model of delivery with Vicinity. For the first time, we are co-locating our drones with businesses at their premises, rather than local businesses having to co-locate their goods with us at our delivery facility.

“With the increase in consumers’ desire for convenience and speed, on-demand drone delivery can help address the costly last-mile delivery challenge, reduce road congestion and emissions, and create new economic opportunities for businesses by utilising their existing retail space as logistics hubs and fulfilment centres.

“We look forward to continuing to work with the team at Vicinity to further develop new delivery models that can complement the retail businesses located at Grand Plaza, and if successful, potentially roll out similar models in other locations across Vicinity’s retail property portfolio.”

Customers can experience drone delivery by ordering available products from participating retailers at Grand Plaza using the Wing app, which is available on the App Store and Google Play.

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About Warwick Petschack

Warwick has over 25 years of property investment and management experience. Principally responsible as Managing Director for Capital Management Australia and Joint Managing Director for Chauvel Capital Partners and Editor of Australian Property Markets News.

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