Amazon
’s
AMZN
delivery drones are set to come into play.
Reportedly, the e-commerce giant is gearing up to debut its long-awaited drone-delivery service later this year, for which it has picked Lockeford, CA, as the first location.
The drones are programmed to drop customers’ parcels in their backyards to offer them a unique delivery experience.
The drones are designed and equipped well to fly beyond-line-of-sight. Also, the detection system of the drones aids in avoiding mid-air collisions.
The latest move bodes well for the company’s growing efforts toward boosting its customer-oriented approach, which acts as a key catalyst in driving its customer momentum.
Amazon.com, Inc. Price and Consensus
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Delivery Drone Market Holds Promise
The growing proliferation of online shopping, driven by the increasing penetration of Internet and smartphone use, has led to the emergence of delivery drones, which are capable of making rapid parcel deliveries.
The demand for the particular drones is being aided by innovation in cargo transportation.
Per a report from MarketsandMarkets, the drone package delivery market is expected to hit $228 million in 2022 and is likely to witness a CAGR of 49% between 2022 and 2030 to reach $5.6 billion by 2030.
A report from Mordor Intelligence suggests that the global delivery drone market is expected to witness a CAGR of more than 12% between 2022 and 2027.
We believe that Amazon is expected to rapidly penetrate the booming market with the help of its innovative AI-powered delivery drones.
AI techniques help the drones navigate properly, reach their destination and drop off the packages by detecting telephone wires, people, animals and properties on the ground.
Concerning Factors
The latest move is in sync with Amazon’s strengthening endeavors toward expanding its quick delivery services, which have been playing a major role behind its dominant position in the e-commerce space.
However, Amazon, which has lost 37.8% on a year-to-date basis, is suffering from a slowdown in online shopping activities compared to the last two years as a result of normalization toward the pre-pandemic levels.
Notably, its online store sales dipped 3% from the prior-year quarter to $51.1 billion in the first quarter of 2022.
Apart from this, the Zacks Rank #5 (Strong Sell) company faces stiff competition from other companies like
Walmart
WMT
and
Alphabet
GOOGL
, which have already debuted their drone delivery services.
You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Recently, Walmart announced the expansion of its drone deliveries across six states in the United States — Arizona, Arkansas, Florida, Texas, Utah and Virginia — this year. The deliveries will be fulfilled from a total of 37 stores.
At present, WMT offers drone deliveries from a few stores near its headquarters in northwest Arkansas and North Carolina.
Meanwhile, Alphabet’s unit Wing, which offers drone delivery service, recently inked an ad partnership deal with
Walgreens Boots Alliance
WBA
.
Notably, Walgreens with Wing recently introduced drone delivery in the metropolitan area – Dallas-Fort Worth, TX. Customers in this area place orders via Wing’s mobile app, after which a notification goes to Walgreens’ team members about new orders.
Wing also operates drone deliveries in Christiansburg, VA; Finland; and Australia.
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