Welcome to the age of the drone delivery

When Amazon and Walmart invest heavily in aerial fulfilment trials, everyone takes note. Is it just a matter of time before parcel drones become as common as delivery vans?


illustration of a drone delivering pizza

Thanks to advances in tech such as machine learning, cloud computing, GPS and Lidar, the use of unmanned aerial vehicles (UAVs) in retail fulfilment is becoming a reality. 

There have been more than 660,000 commercial deliveries by parcel drone (excluding trial flights) worldwide over the past three years, according to McKinsey & Co. A forecast last year by Meticulous Research estimated that this market would grow by an average of 40% a year to 2028, by which time it could be valued at $1.29bn (£1.07bn).  

Parcel drones offer more than a way to leapfrog gridlocked streets. Their carbon footprint can be significantly smaller than that of their earthbound counterparts, according to a study published last October by satellite telco Inmarsat and Cranfield University. The research indicates that a UAV delivering 10 packages within a 5km radius would emit 47% less CO2 on average than a small van with the same workload. 

Unsurprisingly, the giants of retail are becoming increasingly interested in aerial fulfilment. Last month, for instance, Amazon revealed plans to start deliveries in Lockeford, a small town in California’s San Joaquin County, using Prime Air drones. It’s already liaising with local officials and the US Federal Aviation Administration to obtain authorisation. 

Heath Flora, the state assemblyman whose district includes Lockeford, responded positively when the news broke. “Residents will soon have access to one of the world’s leading delivery innovations,” he said. “It’s exciting that Amazon will be listening to the feedback of the San Joaquin County community to inform the future development of this technology.”

The Lockeford scheme is the culmination of an extensive R&D programme in which Prime Air has developed a sophisticated sense-and-avoid system that enables drones to autonomously spot and dodge dangers such as power lines and birds in flight.

This project could shape the extent of Amazon’s drone ambitions, which will be influenced by the aviation rules of different jurisdictions, the level of public acceptance and the ever-important consumer demand for rapid fulfilment. 

Customers will be able to order from thousands of items, such as Tylenol, diapers and hotdog buns, for delivery by air in as little as 30 minutes

But how quickly do customers really need their stuff? Smarty, an e-shopping portal that applies coupons on purchases from US retailers including Target, Walmart and Best Buy, recently asked its customers to identify which goods they would pay more for if these could be delivered by drone within an hour. Their top choice for a rapid UAV drop was food (cited by 40% of respondents), followed by medicines (38%), batteries (30%), an emergency replacement smartphone (30%) and clothing (28%).

One of the main companies jostling for a slice of the aerial fulfilment economy, Wing, has pioneered a mall-based store-to-door service. Deliveries are dispatched from the roof of the Columbus Shopping Centre in eastern Helsinki. With just a few taps on Wing’s mobile app, customers can have food drone-delivered to homes in the city’s Vuosaari, Marjaniemi and Puotila neighbourhoods, as well as to designated picnic spots. The Helsinki deployment follows a pilot in Australia where, in collaboration with Kentucky Fried Chicken, Wing’s drones distributed hot food in the suburbs of Logan City, Queensland.

Another key player in this market is SkyDrop (formerly known as Flirtey). It inked a deal in January with Domino’s Pizza to fulfil UAV deliveries in New Zealand – the next step from the 2016 collaboration that pioneered drone food drops from a Domino’s franchise in the North Island town of Whangaparaoa. Since then, SkyDrop has upped its drones’ payload to 3.5kg and qualified for an unmanned aircraft operator certificate.

In May, Walmart announced plans to expand its DroneUp delivery network to 34 sites, with a potential coverage of 4 million households in Arizona, Arkansas, Florida, Texas, Utah and Virginia. This will enable the supermarket giant to distribute more than 1 million packages by drone annually. It plans to charge a delivery fee of $3.99 for a 4.5kg payload. 

The company says that “customers will be able to order from thousands of items, such as Tylenol, diapers and hotdog buns, for delivery by air in as little as 30 minutes”. 

Beyond food, UAVs could also help to shift shiny gadgets. In March, smartphone giant Samsung announced a partnership with Irish firm Manna Drone Delivery to give customers in Oranmore, Galway, the option to receive the latest devices via an air drop.

In the UK, the Department for Transport’s newly published Flightpath to the Future strategy sets out a plan for integrating delivery drones into shared airspace with other UAVs (for delivering medicines or helping the emergency services) as well as with the wider commercial air traffic infrastructure.

“This is an exciting time for the UK’s drone sector, as new technologies are solving real commercial problems and helping to save lives,” says Professor Iain Gray, director of aerospace at Cranfield University and chair of the Drone Industry Action Group

Gray notes that the government is making “game-changing investments” through the Future Flight Challenge – a £300m programme designed to support technological innovation in the UK aviation sector. But he adds that “innovators need clear, forward-thinking and responsive regulatory regimes to operate within if they are to reap the full benefits”.

While the regulators and other stakeholders work to integrate drones with the nation’s broader aviation networks, Royal Mail has been trialling UAVs to assess their capacity to serve remote communities. In May 2021, it used a drone to deliver Covid testing kits and personal protective equipment from Cornwall to the Isles of Scilly. In April this year, it conducted trials on the Shetland Islands in partnership with Windracers, putting on flights between Tingwall Airport near the capital, Lerwick, and the northernmost inhabited island, Unst, 50 miles away. Royal Mail is planning to establish more than 50 drone postal routes over the next three years, subject to approval from the Civil Aviation Authority. Its longer-term aim is to operate a fleet of 500 UAVs nationwide. It’s just the type of fulfilment capability that retailers will have on their radars as the commercial potential of drone delivery really takes off.