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Hello and welcome to SAE Unplugged, I am your host Grayson Brulte.
Are grocery stores the key to building public trust for autonomous trucks?
Yes, and here is why.
Consumers are suffering under the high burden of inflation which currently stands at 3%. While inflation is coming down, it’s still running high, and consumers are suffering under the high costs of goods and services. To pay for goods and services, consumers are dipping into their wallets and pulling out their credit cards to cover the increased costs of living. Consumers are going into debt to just put food on the table and the debt is piling up.
In the first quarter of 2023, Americans' total credit card balances were $986 billion according to data from the Federal Reserve Bank of New York. This is the highest balance since the New York Fed began tracking credit card balances in 1999. Factor in the high balance with high interest rates and you have a recipe for disaster. It’s expensive to service the debt.
The average rate on a U.S. credit card currently stands at 24.69% up from 22.16% in May. The consumer is drowning in debt and it’s getting more and more expensive to service the debt. Then factor in the European Summer vacation that in my opinion, consumers overspent on and you have a powder keg ready to explode. The average international airfare for coach is currently averaging $962, up 10% from last year and 26% from 2019. Steep increases that are averaged. When you factor in peak demand, flights are averaging closer to $1,300 a ticket. For a family of four to travel to Europe it would cost them $5,200 for the airfare alone during peak times.
If you are feeling the YOLO (you only live once) moment and really want to go for it, you are going to spend even more. In Paris, the average luxury hotel room costs $869 a night, up from $710 a night
in 2022 and $594 in 2021. Prices are going up up and away. Five nights in Paris at a luxury hotel will now cost $4,345 plus airfare at $5,200. And let’s be generous and budget food and wine at $2,000. And you have a grand total of $11,545 for a family of four to enjoy Paris for 5 days. This is before souvenirs and incidentals.
Bottom line, it’s expense to travel to Europe now. Not to mention that the Euro is currently trading at $1.10, you are paying for all practical purposes a 10% tax on top it all. Did you put that trip on your credit card and do not plan on paying it in full, it’s going to cost you even more. Let’s say you plan on paying the trip off in 12 months, you will end up paying an additional $2,840.07 in interest. That equates out to $236.67 a month in interest. Carry this balance for more than 12 months and the bill will only get larger and larger.
But you had to do the trip, because You Only Live Once. The $236.67 that you are going to pay in monthly interest is going to cut into your household budget. That money could have been allocated to groceries, but instead it’s now being allocated to debt payments. Was it worth it? That is a question that only you will be able to answer over time.
While you were fortunate enough to be able to travel to Europe this summer, even though you have to carry a balance. Millions of individuals in the United States were not as fortunate as they are living
paycheck to paycheck because of inflation. Inflation is causing U.S. consumers to change their spending habits. This year, 47% of U.S. Consumers have started shopping at a new grocery store because of inflation. Up from 41% in 2022 according to Morgan Stanley Research. Where are these consumers doing their grocery shopping now? Dollar Stores and Aldi. Why? Because they are simply more affordable. Their dollar can go further there then the traditional grocery store.
Walmart, the leader in the grocery segment with a 25.1% market share is poised to benefit in this environment. Walmart, known for low prices and in an inflationary environment, Walmart stands to benefit as your dollar goes further at Walmart. While Walmart currently stands as the market leader in the grocery segment, Amazon, which is in the middle of a major grocery store revamp, could gain market share if their Amazon Fresh Revamp did the following: follow the Walmart model by rolling back prices. The best way for Amazon to roll back prices is to integrate autonomous trucks into the Amazon Fresh supply chain.
Why? Because autonomous trucks save money. Autonomous trucks are cheaper to operate, and those coast savings can be passed onto consumers. But how do you make the consumer aware of this?
Simple - Show them, do not tell them. For week, Amazon should have one of their newly revamped Amazon Fresh Stores in Chicago or California have all items delivered by autonomous trucks and discount every item by 20% in the store for one week. Why 20%?
In my opinion based on back of the envelope math this is the average savings that can be passed onto consumers by utilizing autonomous trucks. For that consumer that is suffering under high inflation, credit card payments, they now have the opportunity to roll back inflation because of autonomy. For every $100 that a consumer spends on groceries at Amazon Fresh, their purchasing power will now be $120. This is the power of autonomy - cost savings.
Imagine being able to shop at a grocery store and having your dollar go further, while still buying great products? Autonomy can make this happen and Amazon can help to usher in the autonomous era by embracing autonomous trucks. Amazon wants to revamp their grocery segment, why not integrate autonomous trucks? If Amazon were to do this, they would be helping to build public trust in autonomous trucks.
No more misleading headlines designed to scare the public.
No more misleading public statements by officials.
No more lies.
The public would now know the truth. Autonomy saves consumers money. Once the consumer sees, the consumer believes. Let’s come together and help the consumer save money on their groceries. Groceries are expensive in the U.S., food prices are up 4.6% from a year earlier in June, more than double the rate of inflation targeted by the Federal Reserve. Down from the August 2022 peak of 13.5%. But still expensive. Consumers need a break at the grocery store and autonomy can give them this
break. If we give consumers a break on their groceries, we have a bright future that is prosperous and autonomous. In my opinion, saving on groceries is the key to building public trust for autonomous trucks.
What do you think? Let us know by sending an email to podcast at sae.org. That’s podcast at sae.org.
Today is tomorrow, tomorrow is today. The future is Imagining what is Saving Consumers Money through Autonomy.
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