Walmart Turns To Drones

By Douglas A. McIntyre Published Jun 7, 1:04PM EDT

Key Points

Walmart Has Started To Use Delivery Drones
Drones Could Be The Next E-commerce Wave

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Walmart Turns To Drones — © Sundry Photography / iStock Editorial via Getty Images

Walmart (NYSE: WMT | WMT Price Prediction) 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.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.