Walmart Goes Big With Drone Delivery Expansion

WIRED

2 days ago

Aarian Marshall Paresh Dave Walmart, with its partner Wing, plans to bring drone delivery to 100 new stores in five new US cities: Atlanta, Charlotte, Houston, Orlando, and Tampa.
For nearly two years, Alphabet's drone company, Wing, has managed deliveries for a handful of Walmart locations in the Dallas-Fort Worth area. Customers in the metro region can click 'checkout' on a small order on Walmart's website or app and, within an average delivery window of 19 minutes, see a drone buzz above their lawn or backyard and lower a delivery box on a tether.
Now both companies say the service is ready for serious expansion. They announced Thursday that Wing's drone delivery service will roll out to 100 additional US stores in the next year, including Walmart locations in Atlanta, Charlotte, Houston, Orlando, and Tampa. The companies say the expansion will give 'millions' of homes access to drone delivery within 30 minutes or less, making the drone delivery network the largest in the country.
The expansion will test shoppers' enthusiasm for super-quick deliveries—and communities' interest in sharing airspace with a new kind of delivery vehicle. It will also likely help both companies analyze the commercial viability of drone delivery services, which have rolled out to a handful of areas across the world—including northwest Arkansas, metro Raleigh, North Carolina, and Lockeford, California, plus parts of Australia, Finland, Ireland, and Rwanda—but have yet to transform how global consumers think about quick delivery.
Some critics who have studied the drone industry doubt routine deliveries can become truly profitable. 'It's unlikely that it will become commercially viable in the foreseeable future,' says Matthias Winkenbach, who directs research at the MIT Center for Transportation & Logistics and has written about the industry. He cites regulatory hoops, the high costs of employing drone pilots, and the challenges of working in unpredictable situations with unpredictable people—namely, customers' homes and customers themselves. Plus, he says, it's hard to beat the efficiency and price of a 'good old UPS truck.'
Wing says it will use what it's learned about drone delivery rollouts in Dallas to quickly bring its services to other cities starting in the coming months. In that region, 18 stores are equipped with 18 drones each. Together, they deliver about 1,000 orders per day, says Adam Woodworth, the CEO of Wing. Top deliveries include baby wipes and eggs, he says, plus the items a person might not normally get delivered but want right now: a pint of milk because the kid wants a glass, or a forgotten recipe ingredient. At most stores, Wing workers pick, pack, and deploy drone orders; the plane-like drones, which have a five-foot wingspan, can carry packages weighing up to 5 pounds.
Parts of Dallas have access to drone deliveries of a broad selection of items for a fee of $20 per shipment, which is discounted to free for members of the $98-a-year Walmart+ program. A limited selection of items—generally priced no differently than in Walmart's stores—are available to all customers for free delivery from Wing's app. In initial expansion locations, only the latter option of ordering through Wing's app will be available.
The Walmart drone delivery orders are picked, packed, and deployed by Wing workers. Courtesy of Wing/Walmart
Walmart's US drone deployments, which include a more recent Dallas-area partnership with drone logistics and delivery company Zipline and now-shuttered work with the company DroneUp, have been met with little protest or fanfare. But a similar drone deployment by Amazon's Prime Air in College Station, Texas, riled up neighbors, WIRED has reported, who complained about noise, worried about surveillance, and fretted over the drones' possible effects on local wildlife. Amazon temporarily suspended deliveries in Texas and another site in Arizona after two drones fell from the sky during December test flights. And last month, a drone landed askew in someone's front yard. No one was hurt in the incidents, and Amazon is still operating drone delivery in Texas and Arizona, with launches in San Antonio and Richardson, Texas, and Kansas City, Missouri forthcoming.
Wing's drones are lighter than those used by Amazon, and Woodworth says Walmart stores' neighbors will be hard pressed to even spot them in the sky. He says the company has seen a 'handful' of precautionary landings in 'preferred' safe spots like trees during its service in Dallas, but says they have 'largely been non-events.' The company's drones are 'inherently safe,' he says. 'We've seen that the architectural decisions that we've made early on have paid off in the operational reliability.'
It's no accident, though, that the drone service expansion is across relatively warm and temperate metros. Drones do not perform dependably in extreme weather, and if their batteries get very cold, they need to be warmed back up again. Service is faster and more reliable in places with better weather, says Woodward.
A Wing drone carrying a Walmart delivery. Courtesy of Wing/Walmart
Drones are regulated in the US by the Federal Aviation Administration, but Woodworth says Wing has worked with municipalities in the expansion areas to clarify where and how the company can build its drone infrastructure, which he calls 'lightweight.' In April, the FAA authorized Wing to deliver from 7 am to 10 pm up to 30,000 times daily in the Dallas area and as many as 10,000 in the Charlotte region.
How does this all pencil out? Woodworth declined to comment on Wing's business model, and says that the financial arrangements differ across delivery partners. (Wing is also working with DoorDash in Australia, and medical logistics firm Apian and the UK National Health Service to transport blood between hospitals in London.) Generally, though, he says Wing sees a future where it takes a delivery fee cut from each transaction.
In an emailed statement, Walmart innovation executive Greg Cathey called drone delivery a 'key part of our commitment to redefining retail.'