Walmart to begin America’s first large-scale drone operation in 6 states

By: Joann Muller, author of Axios What’s Next

May 24, 2022 – Economy & Business | Source: axios.com

Walmart customers in six states will soon be able to have their orders delivered by drone in less than 30 minutes.

Why it matters: This will be the first large-scale drone delivery operation in the United States. So far, drone deliveries have been available only in a few small towns, with customers selecting from a short list of items.

Driving the news: Walmart‘s DroneUp delivery network will expand to 34 sites by the end of the year, potentially reaching 4 million U.S. households, the retailer said.

• The new markets are Phoenix, Ariz.; Tampa and Orlando, Fla.; Dallas, Texas; Salt Lake City, Utah; and Richmond, Va. (Walmart already has limited drone delivery in Arkansas.)
• Drone delivery will be available 8 a.m. to 8 p.m. from at least three Walmart stores in each city.

The scale of Walmart’s planned operation is significant in other ways too.

• Shoppers won’t be limited to a short list of preselected items. Instead, they’ll be able to order anything from Tylenol to diapers to hot dog buns — 100,000 different products in all, up to a total of 10 pounds — to be delivered by drone for $3.99.
• “If it fits safely, it flies,” DroneUp CEO Tom Walker tells Axios.
• When the service is up and running, Walmart says it could deliver more than 1 million packages a year by drone.

The big picture: Therace to bring drone delivery to U.S. households is shaping up as a battle of titans, as everyone from Amazon and Alphabet to UPS and Domino’s invests.

• So far, Walmart seems to be out in front — but that could change quickly.

The intrigue: Walmart and DroneUp will offset the cost of delivery with revenue from other drone-related services, such as insurance inspections, emergency response and construction oversight.

• For example, a local construction agency could work with DroneUp to monitor onsite job progress through aerial drone photography.
• Those other services will help the entire drone industry by gathering more flight data.

Of note: Walmart is a minority investor in DroneUp and has a seat on its five-member board.

What they’re saying: The Federal Aviation Administration is paying close attention to what Walmart and DroneUp are doing as it prepares regulations that will allow widespread drone deployment over longer distances.

• “We think it’s important to show, yes, as operators, we can open 34 locations and recruit and find the right operators,” says Walker of DroneUp.
• “We can manage airspace safely so they can assess that this is really a viable, scalable, business model.”

The big picture: Drone delivery is the latest effort by Walmart to expand customers’ delivery options.

• With Express delivery, you can have purchases delivered to your doorstep in as little as two hours.
• With InHome, a Walmart employee will place an order right in your refrigerator.