A recent consumer survey indicated that upwards of 80% of consumers would shop with a retailer that offers delivery via drone. Another amazing statistic shows that 77% of consumers would also prefer to shop with these same companies if their drone service offered delivery within one hour of purchase.
Amazon (NASDAQ:AMZN)is one major retailer at the forefront of this idea. It is testing drones and has worked with the Federal Aviation Administration to move toward them being made legal for commercial uses. Now, Wal-Mart (NYSE:WMT)is getting in on the action with plans to use drones not just for delivery but also for other operations at its warehouse facilities.
Listen to the full podcast by clicking here. A full transcript follows the video.
Sean O'Reilly: If you're just joining us, the big story of the day -- it was announced that Wal-Mart has applied to the Federal Aviation Administration for access and allowance to test drones in the skies. Vince, are you scared?
Vincent Shen: I'm just curious to see if they start shooting each other out of the sky when Amazon has their drones in the air.
O'Reilly: This actually would be drone wars. Actually shooting each other with lasers and stuff. On an unrelated note -- although Wal-Mart may very well have seen this and I'm sure they've done a lot of market research -- Walker Sands Communication, who are a consultancy for 2015 retailers, released an interesting report around consumer preferences. It actually had some really surprising numbers. What did it say?
Shen: Basically, the customers they spoke to, their main takeaways were, and 80% said they would be more likely to shop at a retailer that offers drone delivery within an hour. On top of that, 77% said they would pay for this service.
O'Reilly: That is a far more interesting number.
Shen: Amazon obviously made headlines not long ago when they said their Prime air service -- which they have a page for on their website -- is targeting this idea of using drones regularly to deliver packages. Bezos sees it as common as seeing a mail truck driving down the street, eventually.
O'Reilly: They've actually made more headway in the United Kingdom, as I recall.
Shen: Yeah. The thing is, right now it's not really the technology that's holding them back. If things really went full scale, I'm sure there would be plenty of companies willing to fill that space. It's really regulatory issues where the U.S., the FAA has been trying to figure out how to regulate this new technology. In the U.K. they've been much more supportive of the idea.
That's part of the worldwide -- more so for Amazon -- but both of these companies with their worldwide operations. They're going to have to deal with a lot of different regulatory bodies getting this technology in place -- if and when it does, maybe the next five to 10 years. But it's interesting that Walmart has obviously shifted a lot of focus into e-commerce, as well in its online sales, and this is part of those ongoing efforts.
O'Reilly: In your opinion, Google and Amazon clearly have a head start over Wal-Mart. This just came out, and I would not have imagined this, but they clearly see that customers are willing to pay for instant delivery within an hour through a drone. Are they doing this just because Amazon is doing it, or do they actually think that -- I only go to Wal-Mart to get things?
Shen: Wal-Mart is a huge operation. The drones don't just present a delivery method for them. Sure, that's a great part of it in terms of publicity, and the way it looks, it definitely puts them in a position of appearing to be more forward thinking and innovative. At the same time, I could see a lot of companies with these major operations like Walmart using drones to just improve some of their operational efficiencies.
O'Reilly: That's what they've been using inside their warehouses, I think.
Shen: There you go. If that's the case, there are a lot of applications here, and on the delivery front, it's just that people seem to be interested in them.
O'Reilly: Right. "Get my stuff immediately!"
Sean O'Reilly has no position in any stocks mentioned. Vincent Shen has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.