The Maze: Walmart and Zipline, a company that delivers packages by drone, have agreed to add 300 delivery sites in the United States over several years. The deal gives Walmart a way to offer more shoppers a fast option for small, urgent orders. The companies have yet to publish a list of the new sites, a schedule for opening them or the number of households they expect to serve.
Source: Zipline press kit. A Zipline delivery pod hangs from its cable above a Walmart parcel on a backyard patio.
The Details:
A small order starts in a familiar checkout. When a customer’s address qualifies, Walmart shows drone delivery in its app and on its website. The customer chooses eligible items, places the order and can track the flight. Zipline flies the order to the address, where the aircraft hovers and lowers a smaller pod on a cable to a yard or driveway. Eligible customers can also order from Walmart through Zipline’s own app. Walmart says it can deliver eligible orders in as little as 30 minutes where the service is available. Drone delivery sits alongside Walmart’s other same-day options. One Walmart customer in Texas told the retailer she received a missing ingredient before she finished cooking dinner. Her experience illustrates what Walmart is trying to win.
A site is a place to operate aircraft. It can contain several stations where drones load or recharge. In a separate Dallas–Fort Worth assessment, the Federal Aviation Administration, the US aviation regulator, evaluated a Zipline plan for up to 75 sites with room for multiple stations per site. The example shows how infrastructure is counted. It gives no opening count for the new Walmart agreement. The regulator granted Zipline its commercial air carrier certificate in 2022. Operators also need permission to use the relevant airspace and to fly beyond direct sight. Local rules on where the equipment can go still apply. Walmart says 90% of Americans live within 10 miles of one of its stores. The households that can actually order depend on which sites open and which addresses they can serve.
Walmart is expanding a service it already runs with more than one operator. Walmart and Zipline started in Pea Ridge, Arkansas, in 2021. Zipline later brought its newer home-delivery system to Walmart stores in Mesquite and Waxahachie, Texas. Walmart reported passing one million drone deliveries in May and now reports more than two million across its program. Those totals include work with multiple operators. Wing, another drone operator, announced a separate plan in January to add service at 150 Walmart stores. The companies’ disclosures give no basis for combining these plans into a count of unique addresses. Zipline also announced it had raised $1.5 billion. It says the money will help build its US network, expand manufacturing and hire staff. The companies did not disclose what Walmart pays for deliveries or what it costs to run a site.
MarketMaze Take: Walmart can turn a trip for a missing ingredient into an online order in its own checkout. Its stores give it a starting point. If the right item is in stock nearby and the household can get it by drone in time, shoppers have a reason to order from Walmart for a purchase they might otherwise make at another shop. For retailers evaluating the same idea, repeat orders from eligible addresses and cost per completed delivery help gauge whether a site can pay its way. That also depends on how much the retailer earns on those orders after product and delivery costs, and whether it covers the site’s fixed costs.
