Early Walmart drone program pilots will deliver groceries and COVID-19 tests to customers. Here's everything you need to know about the retailer's delivery trials.

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Early Walmart drone program pilots will deliver groceries and COVID-19 tests to customers. Here's everything you need to know about the retailer's delivery trials.
"People don't make binary decisions by channel," Walmart SVP Tom Ward said.Courtesy of Walmart
  • Walmart has partnered up with three different drone technology companies to start experimenting with the delivery technology.
  • Business Insider interviewed Tom Ward, Walmart's senior vice president of customer product, about Walmart's drone trials.
  • "Like anything at Walmart, once we're excited about something because our customers enjoy it, we'll move as fast as possible to get that technology in lots of people's hands," Ward said.

Walmart is taking its deliveries to the sky by partnering with three drone companies: DroneUp, Flytrex, and Zipline.

For Tom Ward, the retail giant's senior vice president of customer product, Walmart's drone experimentation will allow the company to tinker with "continuing to increase [delivery] speed and convenience in a very new and innovative way."

Drones are just the latest example of Walmart doubling down on its fulfillment potential. With 4,700 brick-and-mortar locations situated within 10 minutes of 90% of the US population, Walmart has increasingly begun using its stores as "distribution nodes for e-commerce sales," Ward told Business Insider.

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"Customers continue to want to interact with Walmart differently and we're trying to absolutely service them in new and different ways, whether that's around speed or convenience," Ward said.

That means fulfilling orders via in-store pickup, curbside pickup, traditional delivery, express delivery, and now drone delivery.

"As it relates to Walmart, we want to primarily learn how the customers interact with this technology," Ward said. "What do they do with it? Which bits do they like? What versions of delivery mechanisms do they prefer? Is it convenient? Is it easy? Is it exciting? What do they buy? What would you have delivered through a drone?"

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As part of Walmart's trial-and-error approach to its drone delivery experiment, the company will be focusing on different deliveries and services in each partnership. Each startup brings something different to the table in terms of regional capabilities, handoff and dispensing technologies, weight capacity, and delivery mechanism, according to the retailer.

Walmart partnered with Quest Diagnostics and drone technology startup DroneUp to make contactless deliveries of COVID-19 self-collection kits to customers in North Las Vegas. Another trial will also take place in Cheektowaga, New York starting in early October.

Flytrex will be flying grocery and household products to households in Fayetteville, North Carolina.

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And Zipline's Arkansas-based trial will center on the startup deploying parcels of health and wellness items using biodegradable parachute technology. That trial won't begin until the early part of 2021.

According to Ward, Walmart's work in the drone space can be likened to its approach in terms of all last-mile delivery. Customers will be forming a relationship primarily with Walmart, but the retailer will rely on different service providers in different contexts. He said that Walmart intentionally teamed up with startups offering "three very distinctive technologies" in order to achieve a "breadth of experimentation."

Walmart's latest team-ups come amidst a spate of drone and fulfillment-related news. In August, online retail giant and Walmart rival Amazon received permission from the Federal Aviation Administration to commercially operate drones. Regional grocery chain Rouses Markets also teamed up with last-mile delivery drone startup Deuce Drone for test flights in Alabama. Meanwhile, the FAA has issued commercial air carrier certificates to Alphabet's Wing Aviation and UPS' Flight Forward.

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Walmart itself has also recently announced its intent to bolster its e-commerce fulfillment capabilities by hiring 20,000 seasonal workers for the holiday season. Walmart has hired 500,000 new employees since March, spurred on by the surge in online shopping that occurred as the coronavirus pandemic worsened.

Ward said that Walmart does not expect drones to dominate the delivery space anytime soon, just as innovations like curbside pickup and delivery haven't completely eclipsed traditional shopping.

"People don't make binary decisions by channel," he said.

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As for whether consumers should expect to see Walmart drones dotting the skies anytime soon, Ward said that much remains to be seen.

"Like anything at Walmart, once we're excited about something because our customers enjoy it, we'll move as fast as possible to get that technology in lots of people's hands," Ward said.

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