US shopping giant Walmart’s moves to deliver customer packages by drones is good news for Elsight as a partner to the company making it happen.

Walmart has partnered with operator DroneUp to enable households in six US states to get groceries and supplies delivered by flying, remote-controlled drones by the end of 2022.

In the country’s first large-scale drone delivery program the retailer said it has partnered with DroneUp to change the face of deliveries.

The news provides a flow on positive impact for critical connectivity technology company Elsight (ASX:ELS) who announced in January it had partnered with DroneUp to provide its Halo platform.

The Halo platform is the in-house communications platform which delivers fast and secure data transmission and end-to-end connectivity for unmanned aerial vehicles (UAVs).

As a leading drone manufacturing company in the US and preferred supplier working directly with some of the world’s largest retail and logistics groups, the DroneUp deal gives Elsight the ability to grow as it grows.


No milk? No worries!

Need some detergent, forgot your milk, even eggs, nappies, or paracetamol? Customers can place an order from among thousands of products allowed to be carried by drone under regulation.

Once they place an order on the Walmart App or site, the product will be brought to the drone hub outside a nearby store, where it’s then packed, inspected, weighed, and put onto the drone for delivery.

Flying at an altitude of ~60 metres, the customer gets a text that says their product is inbound and to make sure all pets and people are inside.

Once the drone gets over the house it will lower to ~30 metres and then lower the package via a tether down and gently set it on to the back veranda or ground before flying back to base.

In an interview with NewstalkZB in New Zealand, DroneUp CEO Tom Walker said it’s not about delivering what can’t break.

“We deliver eggs, we deliver soft drinks and sodas, and you can take them right out of the package and open them and they’re not fizzy because we fly gently and the product is set down gently,” he said.

“The type of thing we wouldn’t carry is hazardous materials, like gas products, anything that may be flammable or considered hazardous material – and it needs to weigh less than 10 pounds (4.5kg).”


Faster than traditional delivery

Walker said the average delivery time will be about 22 minutes. He said deliveries will be much faster because drones don’t have to follow traffic routes.

“The product literally comes straight out of the store, out on to the drone, straight to your house, set gently on your back porch – it’s very fast,” Walker told the station.

He said deliveries should get even faster in time, as products are loaded onto the drone more efficiently.

“We actually think we will be delivering in 15 minutes,” he said.


Safety first

Walker says safety and customer acceptance were the two main concerns.

While safety was always at the forefront of their operations, he was surprised at how willing customers were to embrace the technology once they realised the convenience it affords.

“We talk about safety every minute of every day, but the other was customer acceptance. And that’s what’s been the most surprising, communities are asking for it. The customers within the communities love that it’s fast,” he said.

“Having seen us do thousands of these, they now appreciate that we’re very safe.

“It’s very convenient, when you’ve got that last minute item that you realise that you forget for dinner and to be able to go online and have it delivered in 20 minutes, they really like that.

“Or those diapers or that children’s Tylenol that you need at eight o’clock at night and don’t want to have to load the kids on the car. It’s been received very well. “


Potential for drone delivery is vast

Walker said once regulations start to ease and with improving technology the distance a drone could travel, and weight it can carry will also expand.

“We’re seeing and testing drones right now that are able to carry up to 100 pounds (45kg),” he said.

“I think we’re going to see a lot of creative ways that delivery drones are going to be used.

“For example for first responders activity – being able to deliver things like AEDs, epi pens, Narcan in a rapid fashion faster than any other method you could ever use to get there.”

He said food delivery was also expected to be another big growth area without the food having to be driven around in someone else’s vehicle slowing time from restaurant to customer.

“The way we’re doing it, it comes straight out of the restaurant on to the drone, is flown straight to your house and set down,” he said.

“There’s never a person involved in it from the time it leaves the restaurant until it’s delivered.”


Drone deliveries beyond the US

Walker said it was already looking at other counties to expand with several different opportunities and drone deliveries will become widespread.

He said other drone companies will be looking into deliveries, which will be embraced as people realise the convenience and look more at ways of getting vehicles off the road and emissions down.

“I think it will be more commonplace just over the next couple of years than most people even imagine,” he said.


Elsight’s foothold in burgeoning sector

DroneUp’s partnership with Elsight marked an important validation for its Halo platform in the commercial drone sector, earmarked to become a multi-billion-dollar industry.

The Halo technology “provides DroneUp with a robust connectivity solution for command-and-control redundancy certification, critical and secure data transmission, and uninterrupted connectivity,” Elsight said at the time.

The technology will be used as a key part of the end-to-end link between each individual drone, the DroneUP field drone and the DroneUp control centre.

With its technology becoming a crucial componentry of drones, Elsight is in the hotseat as the sector is set to soar.


This article was developed in collaboration with Elsight, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.