This year, Walmart is expanding drone delivery to six states, allowing many more customers to get a box of diapers or dinner ingredients delivered in 30 minutes or less.
The big-box retailer said it will be able to reach 4 million households in Arizona, Arkansas, Florida, Texas, Utah, and Virginia thanks to an expansion with operator DroneUp. The air deliveries will be fulfilled from a total of 37 stores, 34 of which will be run by DroneUp.
It announced its expansion plans in a blog post on Tuesday. Walmart currently offers drone deliveries from a few stores in northwest Arkansas and North Carolina near its headquarters.
Walmart has been experimenting with how small, unmanned aircraft could change the retail game, drive e-commerce growth, and turn its stores into a way to outmatch Amazon in terms of speed. It signed agreements with three operators — Flytrex, Zipline, and DroneUp — and began pilot projects to deliver groceries, household essentials, and Covid-19 test kits to customers two years ago. The terms of the transactions were not disclosed by the company.
The new delivery method is an extension of Walmart’s strategy to leverage its massive physical footprint as a competitive advantage. Approximately 90% of Americans live within 10 miles of one of Walmart’s 4,700 stores. Walmart has expanded its fast online options through these stores, including curbside pickup, InHome, which delivers directly to customers’ refrigerators, and Express Delivery, which delivers items to customers’ doorsteps in two hours or less.
Customers who live within the delivery range of a Walmart drone can order from a selection of thousands of items between the hours of 8 a.m. and 8 p.m. Each drone delivery will cost $3.99. Customers can order up to 10 pounds of items.
Each order is picked, packaged, and loaded at the store before being flown remotely to the customer’s yard or driveway by a certified pilot. The package is slowly lowered by a cable on the drone.
Orders must be placed through DroneUp’s website or the websites of the other two operators. Walmart stated that it intends to add order-placing functionality to its own website and app in the future.
Walmart will be able to deliver over 1 million packages by drone in a year, according to David Guggina, senior vice president of innovation and automation for Walmart U.S., in a blog post.
What customers order has been one of the surprises of the drone tests, he added. Guggina predicted that customers would use the drones to get emergency items such as over-the-counter medication. Instead, he claims that many people have used it for convenience. Hamburger Helper, for example, is the top seller for drone delivery at one store.
Batteries, trash bags, laundry detergent, and Welch’s fruit snacks are also frequently delivered by drone, according to the company.
Walmart will also make money from the drones in other ways. It plans to offset delivery costs by selling photographs taken by drones to municipalities and local businesses such as construction and real estate firms. The profits will be shared with the drone operator.