Walmart Turns To Drones

Walmart (NYSE: WMT) may realize Jeff Bezos’ dream of order delivery before Bezos does. As far back as 2013, Bezos created the early version of what he called Amazon Prime Air. He said the systems for delivering Amazon orders would be working in five years. It took a lot longer. Walmart is implementing a program that allows deliveries of orders with drones from 100 stores. If successful, the service will be rolled out quickly.

The first Walmart drones are working in Northwest Arkansas and the Dallas-Fort Worth area. Walmart’s headquarters is in Bentonville, AR.

Management believes that drone adoption will help Walmart retain customers as prices for the products it sells rise. Despite pressure from President Trump, Walmart has no options if it wants to hold its margins. Most of the products Walmart sells are made in China, which is a significant target of President Trump’s tariffs.

The question that Walmart has not addressed in public is whether drone delivery saves money. It depends on which other forms of delivery are compared. Walmart ships. People can order online and pick up at stores. They can have items they buy delivered if they live close to Walmart stores. The final option is via delivery services like UPS and FedEx. And, ground delivery is less expensive than overnight.

Walmart also says that 90% of America’s population is within 10 miles of one of their stores. That should make delivery easier.

Drones will play a significant role in various applications, including warfare, surveillance, and delivery—Walmart’s just at the tip of the spear.

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