07-22-2025
In recent years, retail companies have invested heavily in autonomous delivery fleets — such as AI-powered drones and self-driving vehicles — to reduce delivery times and fulfill orders more efficiently. For example, Amazon has introduced Prime Air to test its drone-based delivery system. Other companies, such as Walmart, have followed suit by expanding their drone delivery service. These services are currently operating in a limited number of communities.
At Purdue University, autonomous delivery robots are already a common sight on campus, following the university’s partnership with Starship Technologies to provide food delivery through self-driving robots. Such technological investments reflect companies’ efforts to address growing consumer impatience — shoppers’ increasing desire to receive their orders as quickly as possible — a key factor influencing online purchasing decisions.
By drastically reducing waiting times, the rapid advancement of robotic delivery is poised to transform markets and redefine the competitive landscape. To shed light on these potential changes, a team of researchers, including Federico Rossi, an associate professor in the Daniels School's Marketing Department, and Chaewon Seol, a fifth-year PhD student, is examining online food delivery. Their study, “Consumer Impatience, Technological Innovation, and Market Structure,” draws on detailed data from a startup that provides delivery services to pizzerias, offering information on customers’ location and transactions.
After estimating an econometric model of demand and supply, the study shows that consumers are indeed impatient and are willing to order from lower-quality pizzerias to receive their pizza faster: each additional minute of waiting is valued approximately 5% of the total order’s worth.
On the supply side, many low-quality pizzerias strategically locate in densely populated areas, such as the city downtown, in an effort to offset their lower quality with faster delivery. Simulation exercises reveal that the impatience of consumers currently softens price competition and keeps the market fragmented, allowing multiple pizzerias to coexist. However, the introduction of delivery technologies that significantly reduce wait time would erode the proximity advantage of pizzerias, especially low-quality ones.
In cases where delivery times are cut by more than 75%, the market would likely concentrate around high-quality pizzerias, especially those in suburban areas, forcing most mid- and low-quality urban pizzerias out of the market. Despite a reduction in the number of providers, consumer welfare is expected to increase due to faster delivery, higher competition, and — ultimately — better pizza.
The study also finds that the startup can currently significantly increase profits by providing a premium delivery service to the most impatient customers. More broadly, the authors argue that emerging technologies will soon be challenging the long-standing marketing principle that proximity to consumers is key to success. The well-known mantra “location, location, location!” may soon give way to a new one: “logistics, logistics, logistics!”
