Amazon.com Inc AMZN and Walmart Inc WMT are the two largest American companies in online retail. The rivalry has now set its new sights on online drone delivery: Who will be the first to conquer the skies?
Amazon Drone Delivery: When then-CEO of Amazon Jeff Bezos appeared on 60 Minutes in 2013, the billionaire unveiled a bold plan to utilize drone delivery by 2019. While Bezos’ initial timetable was not met given the numerous logistical challenges inherent to drone delivery, Amazon has still made substantial progress.
The Seattle-based company has spent billions in developing Prime Air, according to a Bloomberg newsletter. The company aims to deliver 500 million packages a year via drone by the end of the decade.
Amazon has initiated testing of drone technology in Texas and California and has eyed future testing in Arizona. The company has also looked to test the technology in Britain and Italy.
Prime Air was also recently granted clearance by the Federal Aviation Administration (FAA) to operate its drones beyond the visual line of sight (BVLOS). This designation indicates that Amazon drones can navigate airspace with obstacles such as planes and hot air balloons. It also means that dedicated observers do not have to see the drones directly.
Walmart Drone Delivery: Walmart first decided to enter the drone space in 2015.
The company expended considerable resources in adopting drone technology since then. Unlike Amazon’s in-house development, Walmart has opted to contract the technology from companies competing to work with the Arkansas-based retailer.
In particular, Walmart has worked with Wing, a drone delivery subsidiary of Alphabet Inc GOOGGOOGL. The two American conglomerates partnered to provide drone delivery in the Dallas-Fort Worth metropolitan area in 2023. In 2024, Walmart expanded the program to cover up to 75% of the metro area’s population, also partnering with the delivery company Zipline.
Zipline and Wing both are approved by the FAA for BVLOS.
Why it Matters: Drone delivery services are projected to be over a $10 billion industry by the end of the decade, with a CAGR of over 40%. Air delivery will allow Amazon and Walmart to shed delivery costs and provide even faster delivery to customers (within 30 minutes.)
Photo: S.Galindo/Shutterstock.com
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