Retail giant Walmart is taking the fight for market share to a new frontier in its quest to match rival Amazon’s tech advantage. In the latest U.S. patent filing, Walmart Stores Inc., the world’s largest retailer is tapping into a fast growing craze – drones.
The patent outlines an autonomous machine that’s essentially a floating warehouse complete with launching bays for multiple drones that would in turn make deliveries to shoppers’ doorsteps. Flying at between 500 feet and 1000 feet high, the warehouse can also be operated remotely.
Back in April of 2016, Amazon secured a patent for a similar machine describing in general, delivery of items through an airborne system. According to a managing partner at patent-licensing firm Longhorn IP, Khaled Fekih-Romdhane, Walmart has gone a step further to detail the design and operational aspects and therefore stands a better chance of approval.
Walmart has in recent years increased its pursuit of patent filings to ease the shopping experience and make it fun for customers. One such application last October describes a web-based system that gathers data (similar to Amazon’s Dash buttons) and can be used to reorder basic household items quickly by knowing how often a product is used. Another filing by Walmart is for drones that would be used to bring products to the sales floor from the backroom
This race to the sky and integration of technology by Walmart is in direct response to Amazon’s forays into the brick-and-mortar space through the acquisition of Whole Foods for $13.7 billion in addition to opening its own physical stores. Walmart on the other hand is increasing its e-commerce footprint through enticements to customers like free two-day shipping and also through acquisitions.
Walmart and other retailers have minimized costs by encouraging shoppers to pick up online orders at the store where they may hopefully be tempted to grab other items on display. Typical online orders would have to be delivered by a national or local logistics provider covering the “last mile” to a customer’s residence, increasing costs for the retailers. This cost and the other associated with a traditional warehouse that can only fulfill orders within a limited square distance has been a headache for retailers.
A floating warehouse therefore offers a creative way to reduce these costs because it can serve a much bigger area and bring in efficiencies unseen before. This comes out clearly in Walmart’s patent application as it says, “There are numerous ways to distribute and deliver products, Getting the product to a delivery location, however, can cause undesirable delays, can add cost and reduce revenue.”
According to Brandon Fletcher, an analyst at Sanford C. Bernstein, movable warehouses can bring flexibility to a logistics system and create efficiencies when demand varies wildly. This is critical for e-commerce where demand is highly variable.
With Walmart’s patent application we could see a fully loaded airship fly to one location and release a flock of drones to deliver packages to customers’ doorsteps, after which the drones would return to the vessel and restock while it flew to the next location.