Market Insights

Will a Drone Deliver Your Holiday Purchases?

November 24, 2023 by Karen Hanson

Several large companies, including Amazon and Walmart, are launching drone delivery services. Here's what you need to know about the logistics of this developing industry.

‘Tis the season for bargain hunting and gift buying, so your neighborhood will soon be crowded with delivery trucks. 

 

Drone making a delivery

Drone making a delivery. Image used courtesy of NASA

 

Black Friday and Cyber Monday bring deep discounts on everything from electronics to toys, and most shoppers will buy at least one item online, each involving truck transportation in some way. However, if large retailers like Amazon and Walmart have their way, aerial delivery vehicles, also known as drones, will soon replace some of those trucks. In fact, in many parts of the country, drone delivery is already a reality, dropping everything from prescriptions to pizza on people’s doorsteps. 

 

Door-to-Door by Drone

Major package delivery services like FedEx, UPS, and DHL are considering alternatives to internal combustion trucks to reduce carbon emissions. They've made progress in adding electric vehicles (EVs) to their delivery fleets, and electric air package transport could be on the horizon for use in regional bulk deliveries.

 

UPS electric air transport

UPS electric air transport. Image used courtesy of UPS

 

But for deliveries on the hyperlocal level—that is, to your front porch—Amazon and Walmart are forging a path.

 

Amazon: Ready for Prime Time?

Since 2002, Amazon’s drone delivery service Prime Air has been running in two U.S. cities, College Station, Texas, and Lockeford, Calif.

The 80-pound drones fly about 60 mph and use cameras and sensors powered by artificial intelligence technology to detect obstacles and find their targets. The drone's flight path is relatively low, only 40 to 120 meters above ground, so they’re not likely to collide with airplanes or (conceivably) Santa’s sleigh. 

 

An Amazon worker loads a drone for delivery.

An Amazon worker loads a drone for delivery. Image used courtesy of Amazon

 

The process requires human help, as Amazon employees monitor and track each flight. Customers must do their part, too, by directing the drones to the spot in their yard or driveway where they want the package delivered using flat, square targets printed with a QR code. 

Level terrain is advisable—a package may tumble down a sloped driveway, for instance—and the target should be placed away from cars, trees, and other objects. The drop from the drone is approximately 12 feet—not ideal for fragile items.

Drone delivery is fast. Amazon customers can receive their merchandise in 60 minutes or less after ordering, but only if they live within the drone’s range of about 3½ miles. 

 

Video used courtesy of Amazon

 

In its nearly 10-year testing phase, Amazon’s drone experienced numerous crashes and failures, but now that it’s operational, Amazon claims to have made more than 100 deliveries without serious incidents.

However, drones still have serious limitations. Most prominently, cargo weight and range. Even if you live in Amazon’s drone coverage area, the packages you order must weigh less than five pounds and fit into a cardboard box the size of a shoebox. Amazon lists eligible items and heavily promotes its new prescription service.

 

Walmart: Winging Its Way

While Amazon has gained the most visibility, Walmart has arguably been more successful in its drone deliveries. Since 2022, Walmart has made more than 10,000 deliveries and touts a delivery time of 30 minutes or less. Moreover, the service is available in seven states: Virginia, North Carolina, Florida, Arkansas, Texas, Arizona, and Utah.

Unlike Amazon, Walmart is not developing its own drone technology. Instead, it has partnered with drone delivery companies, such as Virginia-based DroneUp.

Most recently, the giant retailer has partnered with a tech titan—Google's parent company, Alphabet. Wing, a division of Alphabet, claims to operate thousands of drones that have made more than 350,000 deliveries. Walmart's deliveries represent a small percentage of that.

 

Walmart delivery made by a Wing drone.

Walmart delivery made by a Wing drone. Image used courtesy of Walmart

 

Wing will operate out of two Walmart stores in the Dallas-Fort Worth area. The delivery area is six miles, and packages can weigh up to 10 pounds. Walmart promises to deliver everything from household goods to ice cream and eggs.

Instead of dropping, Wing slowly lowers the package with a cable to the designated spot in the customer's yard. That means Walmart can deliver more delicate items. 

Customers must download an app to use the service, and Walmart charges a delivery fee.

 

The Future of Drone Delivery

Amazon is committed to expanding its drone services. In 2024, Amazon will add a third (as yet unnamed) city in the U.S. and begin service in the U.K. and Italy. 

Amazon’s newest drone, the MK30, is designed to fly faster and farther. It’s quieter than older drones and capable of operating in light rain or extreme temperatures. 

 

Amazon’s MK30 drone.

Amazon’s MK30 drone. Image used courtesy of Amazon

 

Other retailers, from Walgreens to Pizza Hut, are piloting drone deliveries, and more drone-operating companies are appearing on the scene. But it may still be several years before package-dropping drones become common. In addition to cargo and weight limitations, companies consider the financial ramifications of security and accident risk.

Flight regulation poses another significant hurdle. In every nation, drone flights are subject to laws, restrictions, and regulations. In the U.S., the Federal Aviation Administration (FAA) sets the policies for recreational and commercial drones. Drone delivery services must use certified drone pilots, meet strict requirements, and receive FAA authorization for flight zones. These may be easier for large companies like Amazon and Walmart to accomplish than mom-and-pop shops.