Crash Raises Doubts For Amazon’s $2 Billion Drone Program

It was not so long ago that package delivery drones, specifically ones from Amazon
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.com, seemed poised to take flight as soon as the right regulatory bodies signed off. At present, however, the concept of package drop-off via drone is looking like it could be a dud.

Amazon’s drone program is nowhere near taking off despite nearly a decade in development. The company has made a $2 billion investment and has a global team of 1,000 people worldwide working on the project, according to a Yahoo Finance report on a Bloomberg investigation.

For some of the experts on the RetailWire BrainTrust commenting in an online discussion last week, the failed ambitions of the drone program were a foregone conclusion.

“I don’t know who is surprised or why they are surprised that it’s not ‘taking off,’ wrote Paula Rosenblum, co-founder of RSR Research. “In Colorado, you can buy a license to shoot them down. They’re risky on a good day with anything heavier than a feather. They eliminate jobs for no good reason. What could possibly go wrong?”

“Drone delivery is great in concept, but a nightmare in reality,” wrote Steve Montgomery, president of B2B Solutions. “Imagine the air around your town or city full of drones from different companies rushing to make deliveries. Add in birds, a few people flying drones for recreation and what you have is a recipe for trouble.”

Speaking on Bloomberg TV, journalist Spencer Soper described problems with the Amazon drone design. In a test last summer, an Amazon drone experienced a motor failure while in flight and plummeted to the ground despite anti-crash safety features and caused a 25-acre brush fire with the explosion of its lithium battery.

The crash of the drone, which weighs about 85 pounds, gave Federal regulators pause. Still Amazon has not abandoned drone R&D. Mr. Soper sees the ongoing investments as part of Amazon’s desire to shorten package delivery time beyond what has been possible so far.

Despite some seeing dark clouds over the drone program, many on the BrainTrust think Amazon is wise to keep its eyes on the skies.

“Eventually, Amazon and others will succeed in developing a drone delivery program and devices that work well,” wrote Bob Amster, principal at Retail Technology Group. “This is about R&D and perfecting a technology. Scientifically, it is possible, probable and will happen — in a year or two more.”

“So if a car battery catches on fire or a tire blows out and causes an accident, do we stop driving cars?” wrote Shep Hyken, chief amazement officer at Shepard Presentations. “Of course not! I can’t see one failed drone grounding $2 billion in research, development and testing.”

Though some, like Andrew Blatherwick, chairman emeritus at Relex Solutions, see the future of drones as being more limited.

“Drone technology will have its place in the supply chain but it is never going to be a vehicle for mass movement of product,” wrote Mr. Blatherwick. “Amazon will, if anyone can, overcome its current issues and be back on track. However, it must be time to look at the likely returns from this technology.”

Amazon’s airborne drone program emerged at a time when the company was beginning to demonstrate ambitions in logistics across the board. At that time, a number of other logistics providers and tech companies began their own drone pilots.

UPS began testing a vehicle in 2017 that would act as a mobile drone base, allowing drones to take off from the vehicle, deliver a package to a doorstep and return.

Alphabet’s Wing Aviation in 2019 began piloting drone delivery of products from Walgreens
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, FedEx
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and some small businesses in Christianburg, VA. This month the company launched a similar pilot in Dallas, TX, its first in a major metropolitan area in the U.S.

In 2020, it appeared as though the pandemic might increase the prospects of success for contact-free delivery drones. That year, UPS launched a partnership with CVS piloting the delivery of medicine to Florida’s largest retirement community via flying drone. Uber
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also began testing food delivery via flying drone.

Others on RetaiWire’s BrainTrust are not so sure Amazon will come out on top, but see promise in other innovators’ progress.

“Amazon’s drone program may crash and burn, yet Walmart
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and others mentioned in the article seem to be going full speed ahead,” wrote Carol Spieckerman, president of Spieckerman Retail. “I would put drone delivery in the inevitability category, but it will take persistence, patience and plenty of cash to scale.”

For BrainTrust member Joel Rubinson, president of Rubinson Partners, however, there were bigger issues surrounding drones that should be taken into consideration.

“A little creepy, given that drones can be used for surveillance, and a little scary in that drones can be used for military and terrorist payload delivery,” wrote Mr. Rubinson. “Not now — the world is too freaked out.”