For all the ills people like to bring up about social media and internet culture, one of the best advancements of our age has been because of our increasing online presence.
Thanks to the rapid spread of information and services, most global citizens now have access to more than an encyclopedia's worth of data in their pockets.
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We're able to reach out to loved ones across the world, look up just about any topic we're interested in, and access a wider variety of goods far faster than ever before.
Many of us take this simple fact for granted. We increasingly expect retailers to scale up their delivery capabilities; when Amazon (AMZN) introduced two-day free shipping for Prime members, that became the new standard. Nobody wanted to wait a week or more for their goods to be dispatched anymore.
Now, many of the major retail giants offer next-day or same-day shipping and fulfillment, meaning if you placed an order for one of the thousands of SKUs they keep in stock at a warehouse near you, chances are that very item would show up at your doorstep in a matter of hours.
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Walmart (WMT) , Target (TGT) , and Amazon all offer shipping within hours of an order placed, and the competition only ramps up by the year.
Walmart
Walmart shipping is a key growth factor
Fast shipping is as much of a money taker as it is a money maker for many retailers.
Rapid fulfillment is nothing short of a miraculous logistical balancing act. When millions of orders for different items are in constantly fluctuating stages of the supply chain process, the fact that the correct item arrives at your door more than 90% the time is something to marvel at.
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And since Amazon largely leads the charge when it comes to fast and accurate shipping, Walmart has been trying to make progress in the space to simply keep up.
With a store location within 10 miles of 90% of the United States population, that process has been made easier thanks to proximity. Many of Walmart's stores now double as warehouses; the retailer uses its massive footprint to double as last mile fulfillment stations.
Walmart working on other delivery options
But Walmart has been focusing on other delivery modalities beyond the road.
Earlier this year, Walmart announced it would be scaling up its drone delivery capabilities, bringing the service to almost two million households in the Dallas-Fort Worth area. That number represented approximately three quarters of the entire metropolitan area.
At the time, the expansion brought its drone delivery service to seven states: Arizona, Arkansas, Florida, North Carolina, Texas, Utah and Virginia.
But now, just one year later, Walmart will roll back some of its drone deliveries in select cities in an effort to refocus and perfect its ambitions in the Texas area.
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DroneUp, a Walmart partner that helps fulfill airborne packages, said it would shutter 18 Walmart delivery hubs in Phoenix, Salt Lake City and Tampa. It will lay off 17% of its staff affiliated with the project and whittle Walmart's store fulfillment capabilities to 15 Walmart locations:
- Dallas: 11
- Bentonville, Ark: 3
- Virginia Beach: 1
"We're really focusing on automation, and a drone with higher payload capacity and longer range. Now it's time to focus on that scalable model," DroneUp CEO Tom Walker said, adding the demand simply was not enough to justify the expense and effort it demanded in other cities.
Walmart, for its part, still works with other drone partners, including Wing (which is backed by Google) and Zipline.
"Our drone delivery program is still a pilot and by focusing our efforts in Dallas-Fort Worth, we can learn more about the potential to scale this innovative delivery option for Walmart's customers," Walmart said in a statement.
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