Walmart (NYSE: WMT) is testing the waters of a delivery drone fleet, according to the retail giant. The company is piloting a delivery program in North Carolina and has partnered with an outside firm to develop its drone program.
The retailer has partnered with Israeli startup Flytrex, which specializes in drone delivery. Tests are set to begin in Fayetteville, North Carolina. The drones being utilized are capable of traveling up to 32 mph and can carry up to 6.6 pounds. The drones are set to travel just over six miles on a round trip.
Walmart's rollout of a drone fleet is the latest sortie in the storied retail company's battle for retail dominance with Amazon (NASDAQ: AMZN). On the last day of August, Walmart announced that it would be rolling out "Walmart+" a service that included free same-day delivery for orders over $35, skipping lines using a "scan and go" feature, and discounts at Walmart and Murphy USA (NYSE: MUSA) gas stations.
Walmart's latest move against its competitor comes just weeks after Amazon secured FAA approval for its drone fleet, a significant milestone in eventually rolling out its fleet for full-scale commercial use. Walmart has already experimented with drones in the past, though at the time, the company didn't opt to pursue drones at the pace Amazon has.
The announcement seems to have driven Walmart's share price up, at least part of the day on Wednesday. Shares of Walmart were at $140.09 at market open and gained 1.6% by the late afternoon. After reaching $142.36, the day's high, Walmart's shares dropped, ending the day slightly lower at $139.94.
Zipline Partnership
Earlier this week, Walmart announced its new partnership with the drone delivery company Zipline for a new drone program in the United States. The program will offer on-demand deliveries of health care products, beginning with a trial early next year near Walmart's headquarters in Bentonville, Arkansas.
Zipline earlier this year partnered with a hospital system in North Carolina to make contactless deliveries amid the coronavirus pandemic. The company stated that it has delivered more than 200,000 critical medical supplies to health care facilities around the world, and is looking to expand its reach in the United States through its partnership with Walmart.