Walmart's Aerial Advantage: Drone Deliveries Can Boost Sales and Customer Loyalty
Key Points
- Walmart is focusing on convenience as a part of its shopping experience.
- It has been expanding into drone deliveries.
- Value investors may think the stock looks a little rich.
- 10 stocks we like better than Walmart ›
Low prices have been a superpower for Walmart (NASDAQ: WMT), but it's been quietly adding a new competitive advantage over the last several years: Convenience.
By offering pickup or express shipping, Walmart has enhanced the ease with which customers can receive items, even if they don't physically set foot in a store.
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That's being enhanced even further through drone deliveries, another resource that can keep customers happy, attract new ones, and boost sales.
Image source: Getty Images.
Drone delivery is here
It may sound futuristic, but the global drone delivery market is already in flight. To illustrate how it will become more common, Precedence Research projected that it was a $530 million market in 2022, expecting it to climb to around $10 billion by 2030.
In 2020, Walmart was already exploring drone delivery. At the end of 2027, the retailer expects drone deliveries to be available from 270 locations across the U.S.
Making shopping easy
Quick shipping is a powerful draw, and Walmart is seeing growing demand in its delivery services.
"One of the fastest growing benefits, obviously, with free shipping is the express delivery and fast delivery services. That was up 60% year on year," CEO John Furner said in the company's fiscal fourth-quarter 2026 earnings call.
Delivery speeds can be taken to a whole new level with drones. There are certain restrictions based on order weight and weather conditions, but drone deliveries can be made in 30 minutes or less. That just makes it even easier to receive a product, which could lead more people to turn to Walmart for their shopping needs. That can then lead to sales increasing.
Walmart stock looks expensive now, with a forward price-to-earnings ratio of 43.2. Conservative investors may want to wait until that ratio drops before starting a position. More aggressive investors could consider paying up now for a company that is growing its competitive retail advantages.
Should you buy stock in Walmart right now?
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Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool has a disclosure policy.
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