‘The demand is there’: Why Walmart is scaling up drone delivery to reach millions more people

Walmart has been doing commercial drone deliveries since 2021, and since then has completed more than 150,000 drone deliveries. The company’s current partners are Wing and Zipline; it ended its partnership with another provider, DroneUp, last year. The deliveries are promised to take under 30 minutes and take about 20 minutes on average, with a four-minute average flight time, according to Walmart.

Retailers have been experimenting with drone delivery operations for more than a decade. In 2013, the concept became popularized when then-Amazon CEO Jeff Bezos showed off drones that could deliver packages to homes in less than a half hour. Walmart and DroneUp launched drone deliveries of Covid-19 testing kits in 2020. Even though retailers have experimented with drones for years, regulatory restrictions and high costs have limited the technology’s growth. The regulatory environment recently improved for drone operators with authorizations in the Dallas area allowing multiple operators to fly commercial drones without visual observers in the same airspace.

Greg Cathey, Walmart’s svp of transformation and innovation, told Modern Retail that drones are a “critical part of how we think about the future of retail, especially as you think about convenience and speedy delivery.”

“This is a sustainable and suitable solution — go-to-market solution — for how we get goods to people,” Cathey said. “We’ve been testing and working with drones for quite some time, but what we’re seeing now, which is why we’re doing the expansion, is this is a viable model for us to be able to get goods to people and do it faster than what you can do typically in a car.”

After several years of flying, Walmart and Wing found the best use case for drone delivery — given its limited capacity and relatively fast speed — to be small deliveries of forgotten or urgent items like baby wipes, batteries or medicine. The most popular items ordered for drone delivery include fruit, eggs, ice cream and pet food, per Walmart. Wing’s current aircraft can handle about 2 or 2.5 pounds, and the company is working on a new model that would double that to about 5 pounds.

“It’s our job to provide solutions for the customers, and this is just another solution that we’re providing for them, because the demand is there,” Cathey said, adding that feedback has been positive from customers and store operators and that customers in other cities have been asking for it. “It’s not disruptive to the current business, and we see it as an incredibly additive. We wouldn’t be expanding it to an additional 100 sites if we felt it wasn’t ready to grow.”

Scott Benedict of Benedict Enterprises, a retail consultant and former buyer for Walmart and other retailers, said that while drone delivery may never be the most profitable way to deliver something to a customer, that may at least somewhat improve, and that it’s more about speed and the broader relationship with the customer.

“The role that drone delivery plays is evolving,” Benedict said. “There are a lot of us that are in the industry who thought of this as a full-on last-mile delivery method, along with delivery from stores. … Really, it’s a complementary last-mile delivery method, where you need something quickly and you just need a couple of items.”

Walmart and Wing stuck with cities similar to where they have previously flown; all are in the Sun Belt. Wing CEO Adam Woodworth said this was to ensure the cities had similar weather and suburban housing developments that the drones could handle.

Walmart’s Cathey added that participation from local governments is also key to where drone delivery ends up; cities can restrict the development of drone delivery hubs, down to the kind of fencing used. “We want to go where areas are very open to this type of technology and servicing customers in this way,” he said.

Woodworth said the goal in Texas was to master the site setup and make sure it was properly linked up with Walmart’s systems so it could easily copy and paste the process to other metro areas. The company had previously scaled the service from one Walmart store in Texas to 18 across the Dallas-Fort Worth area.

“It’s the sort of thing that we — and broadly, the industry — have been waiting for,” Woodworth said. “To be at a place where you’re not just ready to scale it across the city, but also starting to think about multiple cities, is where I think all the exciting pieces start to happen.”