Dive Brief:
- Walmart is making a strategic investment in drone services startup DroneUp after partnering with the firm to launch hundreds of deliveries from stores in a pilot program, according to Walmart U.S. CEO John Furner.
- With the investment, the company is launching its first official drone operation with DroneUp from a store in Bentonville, Arkansas.
- Furner said the DroneUp investment was part of Walmart's work toward "developing a scalable last-mile delivery solution." Furner added that "[c]onducting drone deliveries at scale is within reach."
Dive Insight:
The promise of delivery by drone to retailers is obvious: fast-moving, self-flying robots could cut down the costs of the most expensive part of a product's journey, which today typically moves by a large truck driven by a wage-making human.
By the mid-2010s, commentators and media were predicting a sky darkened by thousands or millions of drones. In interviews, white papers and patents, Amazon has for years repeatedly teased its intentions of building large-scale drone delivery operations. The company just recently won clearance to begin drone delivery on a rural test range.
Drone delivery has remained in experimental stages. Now, the world's largest retailer is signaling that it thinks large-scale drone delivery is finally nigh.
Walmart first partnered with DroneUp last year to test drone delivery of at-home COVID-19 testing kits. "The trial demonstrated we could offer customers delivery in minutes versus hours," Furner said.
As Walmart ramps up its efforts, Furner pointed to Walmart's fleet of 4,700 stores, placed within 10 miles of 90% of the U.S. population. The executive said that this "makes us uniquely positioned to execute drone deliveries."
The company's strategic investment in DroneUp will provide the drone network operator "the resources to continue developing a scalable last-mile delivery solution," the firm said in a press release. More specifically, DroneUp said Walmart's investment would allow it to build on its tech stack of flight and logistics systems, partner with drone manufacturers, continue hiring "leading industry experts" and make strategic acquisitions of its own.
"With DroneUp's UAS industry expertise and Walmart's vast network, we can unlock affordable rapid delivery and nationwide drone flight services," DroneUp said.
Walmart's ambitions aren't limited to its DroneUp tie-up. Another operator, Flytrex, said it would begin delivering orders for Walmart and other stores in North Carolina. The initial partnership with Flytrex included select groceries and household essentials. Furner also touched on its recent partnership with Cruise, a company working on electric autonomous vehicles.
