Walmart and the race for drone delivery

Category: News

Walmart is beginning testing on its new drone delivery service in New York. By renting a 28,000 square foot hanger, it can start research and perform tests on its drone and conduct test flights.

Test flights will go from one designated spot to another, and flight hours would include 12 flight days a month for 6 hours per day.

Walmart is seeking to patent a system that uses blockchain technology to track packages delivered by unmanned drones. The US Patent and Trademark Office (USPTO) published the application, Unmanned Aerial Delivery to Secure Location on 25th May.

So, could Walmart overtake Amazon in the battle of the drones? The answer in the long term is yes! Although nowhere as big a global giant as Amazon, Walmart can utilise its large network of stores for drone delivery. Amazon will have to rely on customers living near their drone fulfilment centres, which are quite spread out. A drones range is quite small, and a bigger share of customers live close to the stores.

About 49% of Weather Company app users who visited a US Walmart location during Q1 2017 live within six miles of a Walmart store, a deliverable range for a drone. And 15.1% of purchases at Walmart are under $10, according to Perfect Price. Most of these purchases are likely light enough to deliver by drone. *

Amazon reports that 44% of Americans live within 20 miles of one of its fulfilment centres — but that’s too far for today’s drones. In fact, the drones Amazon is testing in the UK only have a range of 15 miles round-trip. So Amazon will need to either build more fulfilment centres, or come up with another strategy, in order to fully embrace drone delivery. *

As we have discussed before, the long term use of drones is something that is not going to be happening in the near future, and there are a lot of processes and regulations to wade though before the dream becomes a reality for these delivery giants. First past the post in terms of patents and testing would put out a strong message to competitors in the race to become the biggest global delivery service.

•Source : Business Insider UK

Chinese retailer JD.com plan to launch a fleet of heavy lifting drones that can carry items weighing the equivalent of a small car across cities to its 235 million customers.

It began trials back in November 2016 and will primarily be used to carry goods to customers living in remote regions. JD.com is the Amazon of China, and with so many delivery networks it sees drones as the next big step. With 235 million regular customers, they need to adapt.

The move has frustrated Amazon, with boss Jeff Bezos frustrated that the Federal Aviation Administration can’t decide how to regulate the airways and taking 10 months to clear the first flights of its experimental drone. By that time, the applications approval was useless because the company had already built bigger and better drones. As a result, Amazon has now shifted its drone development facilities to Canada and the UK, and progress has been somewhat slower than its Chinese rivals.

However, instead of the drone delivering directly to customers’ doorsteps, a local delivery person retrieves the cargo from the drone, which may carry between eight and 15 packages that were ordered by people in the village. The delivery person then brings the packages to people’s doors. Amazon, on the other hand, has shown how it plans to use drones to deliver directly to people’s houses, as opposed to grouping local shipments like JD.

With technology expanding at a large rate, drones may be a new interesting concept, but at the moment they are just that. So called ‘old fashioned’ shipping methods will continue on as they always have, and companies will look for innovative and price effective ways of making sure that their customers still use people rather than just technology.