Amazon to Expand Drone Delivery Service to Nearly 500 Cities

Amazon.com announced Wednesday that it plans to offer drone deliveries in nearly 500 U.S. cities and towns by the end of the year, a sign of momentum for a project that’s been slow to develop since founder Jeff Bezos first laid out his vision for the service almost 13 years ago. The planned expansion for Prime Air would represent a sixfold increase from its current footprint, the company said in a blog post. Amazon is hoping it can transform drone delivery from a futuristic concept to a critical piece of its speedy delivery playbook. Most Prime Air packages arrive in about one hour, but the company says it has completed some drone deliveries in as little as a few minutes post-checkout.

Total Retail's Take: Drone delivery finally appears ready to take off as a core component of Amazon's logistics network after being promised for the better part of a decade. If the service works as intended — 30-to-60-minute delivery that's economical and at scale — competing retailers (that's everyone when it comes to Amazon) will need to up their delivery games. For example, things such as better local inventory visibility, more sophisticated demand forecasting, faster store fulfillment, and access to ultrafast last-mile networks will become table stakes, not goals to be strived for.

And, in fact, we're starting to see other retailers and delivery services invest in drone networks. Walmart is expanding drone delivery through Alphabet's Wing, DoorDash recently secured FAA certification for its own commercial drone operations, and Uber announced a partnership this week with Zipline.

In a broader sense, this appears to be another step by Amazon to eliminate or significantly reduce the remaining speed advantage that traditional brick-and-mortar retailers have held over the online retail giant. The key to this ultra-fast delivery will be execution. Amazon must have the right products (e.g., medication, grocery items, household products) positioned extremely close to demand.