For more than half a decade, Walmart has been testing a variety of drones to assess the viability of airborne deliveries. On Tuesday, a Walmart executive said the company now believes drone deliveries are ready to become a key part of the retail giant’s operations.
Drone delivery will “be in most areas that we operate in,” Walmart senior vice president of transformation and innovation Greg Cathey said Tuesday. While Cathey did not provide a specific timeline, he made it clear that the retail giant is moving beyond small-scale tests.
“The regulatory environment is making it where this can be a viable business for us,” Cathey said onstage at the UP.Summit, in the city where Walmart is headquartered, Bentonville, Ark.
While drone delivery is only currently available at a handful of Walmart’s more than 4,600 U.S. Locations—via partnerships with drone makers Wing, a subsidiary of Alphabet, and Zipline, a startup backed by venture capital firm Andreessen Horowitz—Cathey’s comments mark a notable transition in how major companies are treating drone delivery. Walmart is indicating it is piecing together concrete plans to scale drone delivery, which Cathey described as “really important” to the company.
Walmart signaled its increasing commitment to drones in June, when it announced it would expand its partnership with Alphabet’s Wing to offer delivery across 100 of its stores in Atlanta, Charlotte, Houston, Orlando, and Tampa. Onstage Tuesday, Cathey said, “100 stores is just the start,” and announced that Walmart would add another region to the mix: Northwest Arkansas, where it is headquartered, with a delivery operation at a Walmart across the street from the retailer’s old headquarters in Bentonville, as well as a location nearby in Rogers, Ark. While Cathey declined to provide a specific number of stores, he said that Walmart planned to add “a lot” and emphasized that drone delivery was a “key part” of the retailer’s last-mile delivery strategy.
Drone deliveries doubled since June
Widespread drone delivery is likely still several years away owing to the numerous technical, regulatory, and financial issues that need to be sorted out. The Trump administration has issued two executive orders on drone delivery, and this summer the FAA finally proposed its new rule that would enable drone operators to fly beyond visual line of sight. However, there is an ongoing public comment period, and the rule isn’t expected to go into effect until next year. Once it is finalized, it will likely take a long time for companies and retailers to build out the infrastructure needed for mass delivery—and for customers to get comfortable enough with the new technology to use it en masse, as drone delivery is still unfamiliar to most of the population and has caused concern in some of the communities where testing has taken place.
Nevertheless, Walmart’s public plans offer a major early indication that—after a decade of drone development—some of America’s largest companies do finally see a clear business case and path to scale because of the evolving regulatory environment. Business viability has been one of the greatest barriers to scale and adoption over the past several years.
Walmart has been experimenting with various drone partnerships for more than six years. The retailer has for several years had a small-scale testing operation near its headquarters with Zipline, the startup known for transporting blood in several countries in Africa. Walmart had also made an investment in and launched a temporary service with DroneUp, though the retailer announced earlier this year that it was ending that partnership.
But it’s Alphabet’s Wing, which has emerged as an industry front-runner in the U.S., that Walmart has begun to work with to actually scale. Wing is one of a select few companies the FAA has allowed to conduct package delivery beyond visual line of sight in Dallas—meaning without human observers—as part of its efforts to develop new regulations and parameters specific to drones. Cathey spoke onstage with Wing CEO Adam Woodworth at the UP.Summit, discussing the plans to scale and the partnership. Zipline was not mentioned in the conversation.
Cathey pointed out onstage that Walmart had now surpassed 300,000 drone deliveries—double that of the 150,000 deliveries it had announced this past June. “We’re committed to this,” Cathey said.
