Tortoise is expanding its remote controlled delivery robots to convenience store chains across the U.S. through a new two-year strategic partnership with KRS, an Idaho-based retail brand strategy company with a national footprint. Under the agreement, KRS will resell and distribute more than 500 of Tortoise’s sidewalk delivery vehicles to help its convenience store customers offer affordable, same-day last-mile delivery options.
Recent partnerships with last-mile logistics supplier AxelHire, grocery chain Shoprite and convenience store brand Choice Market demonstrate a major shift toward robotic delivery for Tortoise, one that allows it to bring its robots into an increasing range of markets. The company was initially founded in 2019 to remotely rebalance shared scooters into parking bays or toward demand, but the drop in micromobility usage during the pandemic caused Tortoise to pivot aggressively to delivery, an industry that only continues to grow as more customers expect their goodies to arrive within hours of ordering.
“Everybody’s waking up to this new reality that same-day is the new normal, and it’s just not sustainable on every possible front to have that consumer expectation be met with people making $20 an hour doing those deliveries,” said Dmitry Shevelenko, CEO and founder of Tortoise. “The math just doesn’t work.”
Especially when the cost of delivery is offloaded onto the customer. Whole Foods Market online shoppers in six metropolitan markets will soon be charged $9.95 for same-day delivery, a perk that used to come free from parent company Amazon’s Prime membership.
“Two years ago, for the average grocery CEO, e-commerce was maybe the eighth thing on their priority list,” said Shevelenko. “Right now, it’s number one for everybody.”
Convenience store delivery is becoming a growing sector alongside the on-demand food and grocery delivery markets. Between the first and last weeks of 2020, convenience store online spending grew 346%, according to a report by Edison Trends, a consumer insights analytics company.
KRS offers convenience chain customers a range of solutions, from convenience store management and self checkout POS to app development, business intelligence and omnichannel ordering. The company will buy Tortoise’s delivery robots outright at a cost of around $5,000 each. It will then lease units to customers, most likely as a bundled purchase with other services. Tortoise and its several dozen-strong army of independent contractors will still be the ones driving the robot routes and charging a monthly fee based on miles driven.
Tortoise’s vehicles are best for deliveries that are no more than three miles from the store, based on battery life, but can handle five-mile deliveries in a pinch. If a retailer does at least three deliveries of this length per day, they could easily pay back the cost of the monthly lease, especially if they factor in the marketing benefit of a branded robot spreading the word about a store’s offerings, said Shevelenko.
The robots move at an average speed of four miles per hour, which means they can reach a delivery destination 1 mile away in less than 20 minutes, and can complete about eight to 10 deliveries during normal delivery hours.
Tortoise supplies retail customers with flexible APIs and web portals so retailers can customize the ordering experience. Consumers hankering for a bag of Doritos and a tub of Ben & Jerry’s from their local convenience store usually won’t be given the option at the point of sale of choosing robotic delivery. Instead, after making the purchase, the consumer will get a text asking them if they’d like their treats delivered via robot. If they reply affirmatively, they’d get text updates or updates in the retailer’s app as the robot’s on its way. A unique link sent via SMS unlocks the container, and prerecorded messages on the robot itself will let the customer know when it’s been unlocked so they can access their goods.
The beauty of Tortoise’s business model is that it’s flexible enough to serve multiple different use cases, from urban to exurban, last-mile to middle-mile delivery.
“The logic of our system is all the same; you’re just telling us which robot and where to drive it to,” said Shevelenko. “We actually love these types of opportunities working with a platform customer that can get us into a lot of different types of communities.”
The more communities Tortoise can place its delivery robots in, the faster it can achieve its longer-term goal of truly autonomous delivery robots. Characteristic of all its deployments is a strategy of being in markets before they start to allow commercial autonomous vehicles so that Tortoise is there already when those markets inevitably do legalize self-driving vehicles. Meanwhile, access to different use cases allows Tortoise to continuously collect data it will need to train its AI.
“You need A LOT of local routing data to do autonomy, and teleops is the most effective way to aggregate it,” said Shevelenko.