TLDR
- Walmart expands drone delivery to 270 stores by 2027, reaching 40 million shoppers
- Google Gemini AI partnership enables product discovery and purchases
- Wing drones deliver up to 5 pounds within 30 minutes for free to Walmart+ members
- ChatGPT partnership offers “Instant Checkout” feature for quick purchases
- Analysts give WMT stock Strong Buy rating with $125.75 price target
Walmart announced drone delivery expansion to 270 stores by the end of 2027. The retailer currently operates 120 stores with the service.
The company partners with Alphabet’s Wing and Zipline for drone operations. Current service areas include Dallas-Fort Worth, Atlanta, Northwest Arkansas, and Charlotte.
The expansion reaches over 40 million Walmart shoppers, up from 2 million currently. New markets include Los Angeles, Houston, Cincinnati, St. Louis, Orlando, Tampa, and Miami.
Wing drones carry up to 5 pounds over 6-mile round trips. Delivery time is 30 minutes or less to customer yards.
Customers order last-minute essentials like ingredients or medicine through drone delivery. About 25% of customers use the service three times weekly.
Walmart+ members get free drone delivery. Non-members pay $19.99 per delivery.
Google Gemini AI Integration
Walmart and Google announced their partnership Sunday at the National Retail Federation’s Big Show. Shoppers will use Google’s Gemini AI to find and buy Walmart and Sam’s Club products.
Incoming CEO John Furner and Google CEO Sundar Pichai revealed the collaboration. No launch date or financial terms were disclosed.
The service launches first in the U.S. before international expansion. Furner called it “the next great evolution in retail.”
Walmart partnered with OpenAI’s ChatGPT in October. That deal introduced “Instant Checkout” for purchases within the chatbot.
OpenAI works with Etsy and Shopify merchants including Skims, Vuori, and Spanx. Walmart also operates Sparky, its own AI chatbot.
Drone Delivery Challenges
Human spotters are required for each drone under current regulations. This requirement limits growth potential.
Noise complaints, safety concerns, privacy issues, and weather constraints affect operations. These factors could slow expansion plans.
Amazon and DoorDash offer competing drone delivery services in select markets. The retail industry continues investing in last-mile delivery technology.
David Guggina, Walmart U.S.’s chief ecommerce officer, said AI helps meet customers earlier in their journey. The technology reduces dependence on Walmart’s app and website.
WMT stock has a Strong Buy rating on TipRanks based on 25 Buys and one Hold. The average price target of $125.75 represents 9.8% upside potential.
