Walmart expands drone-delivery service to reach 4 million households

Walmart is expanding drone delivery across six states this year, making it possible for many more customers to get a box of diapers or dinner ingredients delivered in 30 minutes or less.

Through an expansion with operator DroneUp, the big-box retailer said it will be able to reach 4 million households in parts of Arizona, Arkansas, Florida, Texas, Utah and Virginia. The deliveries by air will be fulfilled from a total of 37 stores — with 34 of those run by DroneUp.

It announced its plans for growth on Tuesday in a blog post. Walmart currently offers drone deliveries from a few stores near its headquarters in northwest Arkansas and in North Carolina.

Walmart has been testing how the small, unmanned aircraft could change the game for retail, drive e-commerce growth and turn its stores into a way to outmatch Amazon on speed. Two years ago, it struck deals with three operators — Flytrex, Zipline and DroneUp — and began pilot projects to deliver groceries, household essentials and at-home Covid-19 test kits to customers. The company declined to share terms of the deals.

The new kind of delivery is an extension of Walmart’s strategy to use its huge physical footprint as a competitive edge. About 90% of Americans live within 10 miles of one of Walmart’s more than 4,700 stores. Through those stores, Walmart has offered a growing list of fast online options including curbside pickup; InHome, which delivers directly to customers’ fridges; and Express Delivery, which drops items at doorsteps in two hours or less.

Customers who live within the range of a Walmart drone-delivery site can order any of thousands of items between 8 a.m. and 8 p.m. Each drone delivery comes with a $3.99 fee. Customers can order items totaling up to 10 pounds.

Each order is picked, packaged and loaded at the store and flown remotely by a certified pilot to the customer’s yard or driveway. A cable on the drone slowly lowers the package.

Orders must be placed on DroneUp’s website or through the websites of the two other operators. Walmart said it plan to eventually add the order-placing capability to its own website and app.

With the larger network of sites, Walmart will be able to deliver over 1 million packages by drone in a year, David Guggina, senior vice president of innovation and automation for Walmart U.S., said in the blog post.

One of the surprises of the drone tests has been what customers order, he added. Walmart anticipated customers would use the drones to get emergency items, such as over-the-counter medication, Guggina said. Instead, he said, many have used it for convenience. At one store, for instance, the top seller for drone delivery is Hamburger Helper.

Other frequent items delivered by drone are batteries, trash bags, laundry detergent and Welch’s fruit snacks, the company said.

Walmart will use the drones to make money in another way, too. It said it plans to offset the cost of deliveries by selling photographs taken by drones to municipalities and local business, such as construction or real estate companies. The revenue will be split with the drone operator.