A milestone in delivery by drone
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.