Walmart is starting to see demand pick up for its drone delivery service, as the giant retailer has expanded to 37 store-based deployment hubs in seven states and 26 municipalities, with 6,000 deliveries in 2022, an executive told attendees at NRF’s Big Show 2023 in New York.
“We’re just starting to see the demand curve ramp up, as the (Federal Aviation Administration) begins to move forward,” said David Guggina, EVP of supply chain for Walmart. “As growth continues, it will find its place as another modality within the supply chain.” He added Walmart is finding drone delivery to not only be fast and more sustainable than using vehicles, but more cost efficient as well.
Some favorite items ordered by drone since Walmart began the service in 2021: cookies and cream ice cream (they’ve gotta have it), 2 lb. bags of lemons, rotisserie chicken, Red Bull and Bounty paper towels. Eighty-five percent of items in stock at the stores with deployment hubs meet the size and weight requirements, but at this point just 20,000 are available for the service. And 90% of the U.S. population lives within 10 miles of one of Walmart’s 4,700 stores.
Concerning the progress toward more FAA approvals needed to broaden the scope of drone delivery in the U.S. — a more complex regulatory environment than in China, where adoption is much wider — Guggina said it’s a “chicken and the egg” situation.
“You need more hubs and deliveries, more miles and more data, more evidence of the safety (of drone operation) to show to the FAA,” he said.
Yariv Bash, founder and CEO of Israeli drone provider Flytrex, said his firm is working with the FAA on one of the next steps in the evolution of drone delivery: creating assigned routes, similar to what exists for traditional air traffic. The company is one of three drone partners of Walmart, along with DroneUp and Zipline.
“There are multiple stakeholders, from police, fire, medical supplies — everyone needs to share the airspace,” Bash said.
Guggina said Walmart views the integration of drones as something that can provide additional benefits to local communities, from emergency services to inspection of cell towers. He also said drones act as a compliment to omnichannel services like curbside pickup and BOPIS.
“Drone delivery for us is incredibly fast, opening up a new way to service millions of customers,” he said. “Today the SLA for a drone delivery is 30 minutes, but most times it’s 15 to 22 minutes. Imagine the type of life events where you need that level of service. Or doing a car repair in your driveway, and hitting a button to get a spark plug delivered.”
Harlan Bratcher, global business development head for Chinese retail giant JD.com, said his company is working to get people to broaden their idea of drones beyond unmanned aerial vehicles.
“That’s only a piece of it,” Bratcher said. “There are also robots and land vehicles. During the initial peak of covid, all China shut down. We were able to deliver, through autonomous vehicles on land and air, 2.5 million parcels of food, medicine and PPE to hospitals and clinics in Wuhan. You can use the technology for good.”
Addressing one objection to drones for ecommerce, Bash said Flytrex handled 21,000 deliveries without a noise complaint. “You have to design them for the specific task. If you’re servicing the suburbs, noise becomes an issue.” The company has been running drone deliveries to a Walmart and some local restaurants in Holly Springs, NC for the past two years. Close to 60% of households there have downloaded the Flytrex app and placed at least one order.
“The first few deliveries, everyone was outside, taking selfies and posting them on TikTok and WhatsApp,” Bash said. “By the third or fourth time, people stayed inside as it becomes the new normal for them. That was amazing to see.”