Walmart has decided to end drone deliveries in three states and focus on improving its airborne delivery service in the Dallas-Fort Worth area.Walmart plans to shut down its drone services in Phoenix, Salt Lake City, and Tampa, Axios reports, in part because customer demand there is too small to be sustainable. The retailer has 18 delivery hubs in those regions, which it runs with drone delivery partner DroneUp.The company invested in DroneUp in 2021 to help grow its delivery business after initially partnering with the company in September 2020 to deliver COVID-19 home test kits to customers in Nevada and New York.”The trial demonstrated we could offer customers delivery in minutes versus hours,” Walmart US CEO John Furner said at the time. “Now, after safely completing hundreds of drone deliveries from Walmart stores, we’re making an investment in DroneUp to continue our work toward developing a scalable last-mile delivery solution.”Walmart launched its drone delivery service in Phoenix, Salt Lake City, and Tampa in 2022.After the sites are shut down, Walmart will offer DroneUp’s delivery service in 15 Walmart locations: 11 in Dallas, 3 near Walmart’s Bentonville, Arkansas, headquarters, and one in Virginia Beach, where DroneUp is based.
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DroneUp CEO Tom Walker told Axios that drone delivery currently costs the company around $30 per package. The ultimate goal is to get that cost under $7.Earlier this year, Walmart announced plans to expand drone delivery in the Dallas area to cover 1.8 million residents of the city, roughly 75% of the population. In Dallas it also works with Wing and Zipline to handle those deliveries.
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