Operations

Drone delivery is reaching new heights

Walmart, Wing and Unilever are broadening the reach of airborne delivery.

illustration of people pointing to screens

(Illustration by The Current)

Welcome to Near Future. In this weekly feature, The Current spotlights innovations powering the next wave of commerce.

On Dec. 2, 2013, Jeff Bezos appeared on 60 Minutes to plant a flag for the future of ecommerce: drone delivery.

As the Amazon founder unveiled the company's delivery drones for CBS cameras, he talked about how they would be key to the company's goal of providing 30-minute delivery. Prime Air hype went into the stratosphere. Yet it’s worth remembering that, during the interview, Bezos did attempt to bring things back to Earth.

“This is early,” he said during the interview. “This is still...years away.”

Later in the interview, Bezos talked about how introducing drone delivery five years might be realistic, even while allowing that he is an optimist. Nearly a decade later, drone delivery isn’t yet a normal part of the ecommerce equation. As is often the case with emerging technologies, there have been plenty of times when results of a test required charting a different course. But companies have continued to invest. Technologists, flight experts, ecommerce professionals and regulators have kept at development, and made progress. In fact, the first half of 2022 is bringing lots of advances. Here’s a look at some of the latest developments:

Walmart goes big

a drone over a Walmart parking lot.

A Walmart drone in flight. (Courtesy photo)

Walmart’s drone delivery is set to take flight across the country.

This week, the retailer announced plans to expand its DroneUp delivery network to 34 sites in the United States by the end of the year. That means it will have the potential to reach four million households in states including Arizona, Arkansas, Florida, Texas, Utah and Virginia.

Walmart’s service will make under-30-minute delivery available between the hours of 8 a.m. and 8 p.m. The fee is $3.99 for items totaling up to 10 pounds.

In testing, Walmart said it expected customers to use the service for emergency items. But the more popular use case has been the convenience it provides. The most-ordered item so far, the company said, is Hamburger Helper.

When it comes to scaling drone delivery, Walmart has a unique advantage. Its roughly 4,700 stores put it within 10 miles of 90% of the population. With thousands of items, these stores already have many things under one roof. With drones, it will add an air traffic control of sorts. To complete these flights, each store will have a team of drone pilots.

Once a shopper clicks “buy,” items are fulfilled in the store, packaged and loaded onto a drone. When they arrive at a dropoff point, they are lowered by cable into a customer’s yard.

Walmart partnered with Virginia Beach-based DroneUp on the service. The retailer invested in the startup early in mid-2021. By late last year, the companies stood up three hubs to test the service in the company’s home state of Arkansas.

With the expansion of Walmart’s network, DroneUp will also make services available to municipalities and businesses for functions like insurance, emergency response and real estate.

This will help to further establish drone-based businesses in these areas.

“Not only will the added revenue help offset the cost of delivery, but it also serves the entire drone industry by gathering more flight data as we work together to expand drone operations in a safe and regulated way,” Walmart wrote.

Walmart’s ambitious expansion means the retailer will have the largest reach of any commerce-driven drone delivery program we've seen to date. That also means it will be the first to learn how it works in wide use, and whether there is broad public uptake beyond the novelty of ordering via drone.

Wing spreads in Texas

Wing plane in the air

Wing in the air. (Courtesy photo)

Walmart’s announcement came just over a month after Alphabet drone subsidiary Wing announced what was then the largest test of drone delivery in a metro area. In mid-April, the company began delivering items from Walgreens in four suburbs of Dallas, Texas. Operating for customers within a six-mile radius of a store, the company set an ambitious goal to deliver items in 10 minutes or less.

Orders are fulfilled by Walgreens employees, who receive notification on a tablet that an order is in, then locate an item in the store and package it, the companies said. The employees then clip items onto a drone in the parking lot of a store, where they are waiting on charging pads. Wing employees then oversee deliveries, which are made to doorsteps, backyards or another preferred location.

This is a big effort, and there will be plenty of learnings. Chief among them: How drones can optimize for navigating a more complex near-urban area as they deliver packages.

Ice cream express

ice cream products in front of a drone

(Photo courtesy of Flytrex)

When it comes to encouraging adoption, providing delivery of an item that people love can help sweeten the deal. That’s the approach Unilever is taking this summer as it provides ice cream delivery via drone in North Carolina and Texas.

The consumer goods company – and self-described largest ice cream maker in the world – is partnering with food-focused drone delivery company Flytrex, which operates in North Carolina towns of Holly Springs, Fayetteville and Raeford, as well as Granbury, Texas.

The drones will deliver via The Ice Cream Shop, an online store from Unilever that carries brands including Ben & Jerry’s, Breyers, Good Humor, Klondike, Magnum ice cream, Popsicle and Talenti.

Once orders are placed using the Flytrex app, deliveries will be made to the front and backyards of residents in under three minutes. Under an FAA waiver, the service is allowed to operate within one nautical mile of a delivery site, putting homes within its reach in the thousands.

This airborne drone delivery is running alongside a separate Unilever pilot offering on-demand ice cream delivery via ground-based autonomous vehicles in Los Angeles.

Pilots continue

For now, drone delivery remains in test mode. The Federal Aviation Administration has yet to approve a commercial program, as each of the programs described above are technically operating with special permission.

To be sure, however, the progress of drones is intriguing, and companies have good reason to continue moving forward with testing. Drones stand to take cars off the road and reduce emissions. Plus, if programs grow, they could help reach people in remote areas. If programs were to scale massively, there is also the promise of reducing labor costs.

Drone delivery could solve a key challenge of ecommerce operations: Faster delivery is increasingly expected by consumers, but it gets more complex as scale increases. For a glimpse of the difficulty of launching a large-scale drone program, look no further than Amazon. Its ambitious plans for Prime Air have hit roadblocks such as drone crashes and safety concerns, according to an April report in Bloomberg. Costs are also an issue. Business Insider reported that Amazon's drone delivery is $63 a package, while on-the-ground packages cost $5.50 each. Still, the company intends to complete 2,500 tests this year. Down the road, there may be another big unveiling still to come.

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