Walmart Will Offer Drone Delivery to Four Million Households

Air-Dropped

Walmart (WMT) sees drones as a pathway toward a competitive edge. It has already been offering delivery by drone from a limited number of stores in Arkansas and North Carolina. Now it plans to expand the service to five more states, including Arizona, Arkansas, Florida, Texas, Utah, and Virginia. An estimated 4 million customers could eventually use the service.

Customers within the service range can order online through the retailer’s partner DroneUp and get their products delivered in about 30 minutes. Walmart had anticipated high demand for emergency products during the pilot period. Instead, shoppers opted for convenience, with Hamburger Helper being a popular drone-delivered item.

One Million Annually

Walmart is attempting to leverage its physical footprint and win consumers who value speedy, same-day delivery. There are 4,700 Walmart locations in the US, and 90% of Americans live within 10 miles of a store. With this expansion, the retailer estimates over one million packages per year will be delivered by drone.

Within-range shoppers can place orders for products up to 10 pounds and pay $3.99 to have them delivered by drone. A certified pilot navigates the aircraft to deliver the purchase to the customer’s residence where the package is lowered to the ground using a cable.

Convenience Boost

The evolution of online shopping has transformed delivery times into a vital metric, as companies compete to win customers. Analysts argue Walmart’s buildout of its drone network will help the retailer to better compete with Amazon (AMZN), which has gained market share with its speedy delivery promise to its Prime members. Walmart in turn expects the service will accelerate growth in its ecommerce sales.

Speedy delivery is an ongoing pursuit. As these companies strive to win customers, Americans may find it increasingly easy and convenient to get products — via drone.

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