That was the retail technology year that was. Jury’s still out on drone deliveries
There were some notable drone delivery developments in 2022, but this retail technology innovation remains on the fringes of the mainstream, with many obstacles and challenges still to be overcome.
Amazon recently started to deliver orders by drones in California and Texas.
This is currently operating in Lockeford, California and College Station, Texas.
Once onboarded, customers will see Prime Air eligible items on Amazon. They will purchase items as per normal and receive an estimated arrival time with a status tracker for their order.
“Our aim is to safely introduce our drones to the skies. We are starting in these communities and will gradually expand deliveries to more customers over time,” says Amazon Air spokesperson Natalie Banke.
Meanwhile, Walmart’s drone delivery service is now available for select customers in the Arizona, Texas and Florida markets.
In Phoenix, Arizona, the option will be fulfilled from four stores.
In the Dallas area of Texas, it will be fulfilled from 11 stores.
And from seven stores in Tampa and Orlando, Florida.
This follows Walmart’s announcement of plans to expand its DroneUp network to reach four million additional households across six US states.
“Drone delivery makes it possible for our customers to shop those last minute or forgotten items with ease, in a package that’s frankly really cool. Being on the forefront of that innovation at Walmart is something we’re proud of,” says Vik Gopalakrishnan, Vice President, Innovation & Automation, Walmart U.S.
“It may seem like a futuristic option, but it’s giving our customers what they’ve always wanted, and that’s time back to focus on what is most important to them.”
Progress is undeniably being made, but drones remain a big question mark in our mind.
As Celia Van Wickel, Global Head Omnichannel Analytics at Mars, said in an interview in the second edition of RTIH magazine: “I love big picture thinking, and drones fit that bill, but it does not make as much sense as other technology.”
“There are so many hurdles, from FAA regulations to costs, that need to be aligned. I see the use cases in healthcare, but in online fulfilment drones need a lot of improvement.”
She added: “Drones cannot fulfil larger orders in which weight is a problem. The cost is sky high to fulfil orders and needs to be below $5 per order as other Amazon fulfilment.”
“Amazon is still in the baby stages, still piloting. Walmart is more aggressive. Drones are also a 1:1 delivery mechanism which does not bode well for profitability.”
“Delivery of one box of Cheez-It crackers via drones is not profitable.”
Expect more significant developments from the likes of Amazon and Walmart throughout 2023.
But also expect drone deliveries to remain a futuristic thing for many other retailers, as various challenges, most notably ongoing economic turbulence, see them prioritise other options.
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