Tuesday, October 27, 2015

Walmart's Newest Robotic Employees

Similar to Amazon, Wal-Mart is planning to utilize the newest drone technology for speedier, more convenient transactions with customers. The company plans to use the drones to deliver groceries to a nearby parking lot and to deliver shipments to houses right off of the shipment truck (Levine).

Wal-Mart has a long road ahead of them, however. For Amazon, it took a lot of threats and back and forth to get the approval they needed from the FAA, or the Federal Aviation Administration, to get drones (Newman). It is a possibility that Wal-Mart’s application can be fast-tracked due to recent approvals for drone testing, but Wal-Mart isn’t really that similar to Amazon (Layne). Yes, there is a Wal-Mart store within five miles of 70% of the U.S population, but these are not warehouses with space and workers like Amazon has.

Another important point is that Wal-Mart investors have begun to lose faith in the slowly advancing company, leading to a reported 32% fall in shares. Wal-Mart has reported a 12% fall in income for next year due to extra $1.5 billion that they must pay their workers due to higher wages. At the same time, Wal-Mart has invested a great deal of money into their online services. Given the above, it’s apparent that Wal-Mart has a little less money to play around with and therefore they must believe in any expensive investments like drones (Levine).

Home delivery by drones seems to be the hardest thing to get approved by the FAA right now. Even though the FAA has issued over 2,000 waivers to businesses for drone use, these applications of the technology are for surveillance or photography. Before the FAA can approve home delivery drones, they must write a new set of rules that apply to home delivery, which Bloomberg explains they have yet to do. For this reason, Wal-Mart must join the pioneer companies in drone technology, like Google (or Alphabet), and Amazon, to fight to finalize government approval (Levine).

The article used for this news did overlook a few aspects of Wal-Mart’s entry into drones. First, Wal-Mart isn’t like Google or Amazon, they mainly sell groceries. Yes, they are a retail store for technology, toys and home goods, but many customers use them only for groceries, which could have a less popular market for drone delivery than items that Amazon sells. Furthermore, groceries have specific heating, cooling and weatherproofing requirements that must be met for drone delivery. If it is a really rainy day, delivering a wet cardboard box of groceries would be impossible. Also, Wal-Mart doesn’t have the most highly-trained technical staff, at least a little less qualified than the programmers and computer engineers at Alphabet that are working with the same technology. An unskilled, perhaps technology-opposed (due to age), staff may not be the best group of people to be operating advanced drones.

Layne, Nathan. "Exclusive: Wal-Mart Seeks to Test Drones for Home Delivery, Pickup." Reuters. Thomson Reuters, 26 Oct. 2015. Web. 27 Oct. 2015.

Levine, Alan. "Wal-Mart Joins the Race for Drone Deliveries." Bloomberg.com. Bloomberg, 26 Oct. 2015. Web. 26 Oct. 2015. (Main Article)

Newman, Lily. "FAA Relents, Gives Amazon Permission to Test Delivery Drones in the U.S." Slate.com. The Slate Group, 10 Apr. 2015. Web. 27 Oct. 2015.

1 comment:

  1. After reading this post, I do not believe Walmart should implement a drone system to deliver goods to its customers. First of all, Walmart tends to market itself towards people of lower incomes with their mission of always having the lowest prices. People with lower incomes may not have the access to the internet needed to place an order, creating a problem for Walmart. Also, to cover the cost of buying robots, Walmart would need to raise their prices, thus reducing their profits. Since Walmart is experiencing a period of decline as a company, they should not do anything to jeopardize their success now. Hiring technology experts to set up the drone system would create jobs for people with higher levels of expertise; however, drones would eliminate some of the lower end associate jobs Walmart has currently, thus creating some unemployment. This unemployment could potentially be devastating to our lower middle class, who depend on these jobs for income. While I do believe drones and robots are good for some companies, I do not believe it would be the best business decision for Walmart to enter this market.


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