Walmart expands drone delivery to 4 million homes

Walmart announced Tuesday that it plans to increase the number of stores that offer drone deliveries; it will be airlifting goods to 34 locations in six states in the future , including 400 in Arizona, Arkansas, Florida, Texas, Utah and parts of Virginia Thousands of families. That's a significant increase, and when the company launches the program in November 2021, it will only serve one town in Arkansas.

Walmart has been testing how to make the small drones a game-changer for retail, driving e-commerce growth and outpacing Amazon in its stores. Two years ago, the company struck a deal with three operators, Flytrex, Zipline and DroneUp, and began a pilot program to deliver groceries, household essentials and at-home Covid-19 test kits to customers. But it declined to disclose the terms of the deal.

It is understood that the air freight will be completed by 37 stores, of which 34 are operated by DroneUp . Walmart said that customers who live near stores with drones can order items weighing up to 10 pounds total between 8 a.m. and 8 p.m. for a delivery fee of $3.99. Each of those orders is picked, packed and loaded at the store, and then transported remotely by a certified pilot to the customer's yard or driveway, where the claws on the drone slowly lower the package.

Walmart will be able to deliver more than 1 million packages by drone within a year as its network of shopping sites expands, David Gugina, Walmart's U.S. senior vice president of innovation and automation, said in a blog post . He added that the surprise of the drone test was the increase in customer orders.

Walmart expects customers to use drones to get emergency items, such as over-the-counter medications, Gugina said. Instead, he said, many people just use it for convenience. For example, at one store, the top seller for drone delivery was Burger Assistant. Other items frequently delivered by drones include batteries, garbage bags, laundry detergent and fruit snacks.

However, orders must be placed on DroneUp's website or through the websites of the other two operators. Walmart said it plans to add ordering functionality to its website and app. 

Walmart will also use drones to make money in another way. The company said it plans to offset delivery costs by selling photos taken by drones to municipalities and local businesses such as construction or real estate companies. Revenue will be shared with drone operators. 

With this expansion plan, Walmart could take the lead in U.S. commercial drone deliveries. While companies like FedEx and UPS are working on drones, they are currently more of an experiment than "offering it as a service," according to the Wall Street Journal. Google's parent company, Alphabet, is operating a drone delivery service called Wing in Texas and Virginia that delivers hundreds of thousands of packages around the world, but has yet to announce further expansion plans .

And, of course, there's Amazon, which has been working on drone delivery for years. However, several recent reports suggest that the company appears to be working to get its project off the ground; despite a demonstration delivery in the UK in 2016, Amazon is currently not using drones to deliver packages, and it's unclear if and when it will.

It’s worth mentioning that Amazon’s drone deliveries are autonomous, meaning there won’t be any human pilots. However, Walmart and DroneUp's systems have "certified pilots" at the helm. While this may make it harder for Walmart to quickly scale up drone deliveries, it also fosters a habit of its customers packages falling from the sky; however, that's impossible for Amazon.

At the same time, Walmart's system has some limitations. Currently, the law requires maintaining line-of-sight while the drone is flying, which means it has to set up control towers in the store's parking lot to provide drone service. This restriction also means that deliveries must be made within a 1.5-mile radius of the store.

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