A milestone in delivery by drone

A Zipline drone takes off with Walmart products from a Neighborhood Market in Pea Ridge, Arkansas. Photo: Worth Sparkman/Axios

Starting today, drones shaped like miniature airplanes will drop packages of 4 pounds or less in customers' yards when they order from a Walmart Neighborhood Market in Northwest Arkansas.

Why it matters: The era of ubiquitous delivery by drone is inching forward, with scattered pilot programs involving pizzas and other light shipments — and the imprimatur of Walmart on this service is a big deal.

Driving the news: Walmart and its partner, the drone-maker Zipline, announced their new service Thursday. It will operate from a 25-foot takeoff and landing platform behind a Neighborhood Market in rural Pea Ridge, Arkansas, about 20 minutes from the retailer's home office.

• The companies will use the results of the trial program to figure out how — or if — to expand the service to other markets.

The big picture: Customers increasingly expect to have their orders delivered as soon as possible, and the "last mile" persists as the thorniest issue. According to Deloitte, delivery-by-drone is estimated to become a $115 billion industry by 2035.

• Zipline says its cute little aircraft can loft packages of about 4 pounds, and can get them to customers within 30 minutes of an order.

How it works: Customers within the service area place and schedule an online order — for now, nonprescription drugstore items and some types of (lightweight) food are allowed. A Walmart employee bundles it up and hands it off to a Zipline staffer.

• Zipline preps and launches the drone, which drops the package with a biodegradable parachute. The drone returns to the platform for another order.
• Officials told Axios that packages consistently land in an area the size of two parking spots.

The intrigue: The Zipline drones do all the flying on their own, with no cameras or remote human pilots.

• The drone will circle its target to determine wind direction, then approach the drop zone from the best angle so the package lands nearest the target.

• The drone's 11-foot wings are equipped with proprietary sensors to ensure that it doesn't go where it's not supposed to.

What they're saying: Zipline COO Liam O'Connor told Axios that it could launch a drone from the platform every 90 seconds, potentially making hundreds of deliveries a day.

• He acknowledged the market is competitive, with companies like Alphabet and Amazon racing for primacy.
• He said Zipline's track record of delivering medicine in Rwanda and Ghana gives it an edge.

What we're watching: The drones are operating under a waiver from the Federal Aviation Administration that permits flight within limited airspace and only during daylight. Eventually, Zipline could operate within a 50-mile radius of its home Walmart store.

• Walmart says it's working with the FAA to expand delivery to even more customers in Northwest Arkansas, but had no timeline.

Editor's note: Reporter Worth Sparkman is a Walmart shareholder.