A promise kept can be a rare thing in the world of business, and it’s important to take the word of CEOs and other executives with a grain of salt.
But in the case of Walmart and its drone delivery service, company leaders have followed through on just about every prediction they’ve made.
The world’s largest retailer on Thursday released an assortment of statistics about its drone delivery network in 2022, revealing that it completed over 6,000 deliveries of items from ice cream to rotisserie chickens to paper towels.
More importantly, though, with the last-minute addition of Utah, Walmart (NYSE: WMT) now operates drone delivery services out of 36 hubs in seven states — which is exactly what it promised to do by the end of the year back in May.
“I’m incredibly proud of our team for creating the largest drone delivery footprint of any U.S. retailer and providing customers with an incredibly fast — and innovative — option for delivery,” said Vik Gopalakrishnan, vice president of innovation and automation for Walmart U.S. “We’re encouraged by the positive response from customers and look forward to making even more progress in 2023.”
So how did Walmart get here? And how did it accomplish what companies like Amazon’s (NASDAQ: AMZN) Prime Air and Alphabet’s (NASDAQ: GOOGL) Wing could not?
The retailer first began eyeing an expansive drone delivery network in June 2021, when it made an undisclosed investment in DroneUp and announced its plans to launch deliveries out of its Bentonville, Arkansas, headquarters. The collaboration followed a small 2020 pilot that saw DroneUp deliver COVID-19 test kits to Walmart customers.
Around the same time, Walmart also began conducting drone pilots with Zipline and Flytrex, two more firms focused on short-range deliveries. With Flytrex, Walmart expanded its service to North Carolina, representing the first state to be added to the network.
But it wasn’t until the following year that things really took off.
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This past May, Walmart and DroneUp announced a major expansion to their network, promising to roll the service out to 34 new sites across six states and grow their coverage area by about 4 million customers.
An expansion to Virginia, where DroneUp is based, was announced in August. Then came the launch of services in Florida, Texas and Arizona and finally Utah.
Given the size of that coverage area, 6,000 deliveries might seem low. But compared to the competition, it’s a seemingly solid number: 2022 U.S. drone delivery figures from Prime Air and Wing are not currently available, but neither company can compete with Walmart’s coverage area.
Each is limited to operations in just two states: Both fly commercially in parts of Texas, while Prime Air operates a service in Lockeford, California, and Wing runs a pilot program in Christiansburg, Virginia. Of the two, Wing has had significantly more success internationally, having completed more than 300,000 deliveries globally to date.
While Walmart has yet to take its network abroad, the retailer shared some additional statistics that bode well for its U.S. service.
Not every Walmart store is equipped to make drone deliveries, but the company said it has 4,700 of them located within 90% of the U.S. population. In a way, the firm has a network of built-in fulfillment centers, any of which could be transformed into a drone hangar.
Another key stat: More than 85% of items sold at Walmart Neighborhood Markets fit the size and weight requirements for drone delivery. In total, the retailer and its partners are able to offer up to 20,000 items, making it an ideal candidate for such a service.
So far, no promises have been made around Walmart drone delivery for 2023. But if last year’s track record is any indication, the sky’s the limit.
Click for more Modern Shipper articles by Jack Daleo.
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