Tuesday 24 April 2018

Wal-Mart eyes new floating warehouses

The world's largest retailer has applied for a US patent for a floating warehouse that could make deliveries via drones, which would bring products from the aircraft down to shoppers' homes. Stock photo: Reuters
The world's largest retailer has applied for a US patent for a floating warehouse that could make deliveries via drones, which would bring products from the aircraft down to shoppers' homes. Stock photo: Reuters

Matthew Boyle

Wal-Mart has opened a new front in its battle with online retailer Amazon.

The world's largest retailer has applied for a US patent for a floating warehouse that could make deliveries via drones, which would bring products from the aircraft down to shoppers' homes.

The blimp-style machine would fly at heights between 500 feet and 1,000 feet, contain multiple launching bays, and be operated autonomously or by a remote human pilot.

Amazon was granted a patent for a similar vessel in April 2016.

The migration to the skies represents the latest volley in a clash between Wal-Mart and Amazon to grab shoppers' attention, loyalty and dollars.

In the process, the companies are increasingly treading on the other's turf: Amazon is opening physical stores and agreed to pay $13.7bn (€11.6b) for upscale US grocer Whole Foods.

Wal-Mart, meanwhile, has beefed up its e-commerce business through acquisitions and offers like free two-day shipping.

An unmanned airborne warehouse - laden with drones - could help retailers lower the costs of fulfilling online orders, particularly the so-called "last mile" to a customer's house, which is usually handled by a local or national logistics company.

To avoid that expense, Wal-Mart and other retailers often encourage shoppers to pick up those orders at the store, where they might grab a few additional items.

"The core challenge of traffic and driving distance in any major city or in a very rural location can be helped by a floating warehouse," said Brandon Fletcher, an analyst at Sanford C Bernstein.

"Movable warehouses are a really nice idea because any flexible part of a logistics system allows it to be more efficient when demand varies wildly. The e-commerce world suffers from highly variable demand and more creative solutions are needed."

A moveable warehouse could serve a wider distribution area, Fletcher said, compared with a traditional warehouse that can only fill orders within a fixed driving distance.

Bloomberg

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