Amazon’s Quick Commerce and Drone Advances Ignite Delivery Race With Walmart

It looks like Amazon wants to heat up competition in the delivery space against rival Walmart.

Amazon is testing 15-minute grocery delivery in India as part of its push into the “quick commerce” sector, which is expected to surpass $6 billion in annual sales this year. The eCommerce giant seeks to offer fast, wide-ranging selections to customers across the country, challenging rivals like Walmart-backed Flipkart and Reliance, both of which have launched similar services.

While quick commerce is gaining momentum, traditional retailers in India have raised concerns over steep discounts and fast delivery times, with some calling for investigations into alleged predatory pricing. Amazon’s move reflects its broader strategy to expand its grocery offerings globally, although its grocery delivery service has yet to match Walmart’s success.

Meanwhile, Amazon launched its new MK30 delivery drone, which offers double the range and half the noise of previous models. Approved by the Federal Aviation Administration in October, the drone began operations in November in select areas of Arizona and Texas, delivering small packages weighing up to five pounds.

The MK30 features advanced safety systems, including redundancy to prevent loss of control, and can operate in light rain while avoiding obstacles. This launch is a key step in Amazon’s goal to scale up drone deliveries, with the company aiming to deliver 500 million packages annually by the end of the decade.

Will Amazon’s delivery efforts move the competition needle against Walmart?

“In the earlier days in which advertising benefits were used to promote and differentiate brands, the convenience-in-buying factor was not typically a killer benefit as often described in the vernacular of retailing,” Tom Collinger, clinical associate professor emeritus at Medill-Northwestern University, said in an interview with PYMNTS. “Then, along came Amazon, who began to train consumers to expect a new and improved quality of convenience that they’ve honed and improved upon since creating Prime. This is one more step.”

However, Collinger noted, “it’s not obvious to me that this edge will be a game changer. It may, however, attract the heavy user of grocery delivery apps, so that even the slightest amount of new triers could convert to regular users, and in grocery, lifetime value is substantial. I’m guessing that the greatest advantage here will be to possibly scrape off a few heretofore non-customers who now see this uncommon convenience being what they want or need. How large will these numbers be? It’s hard to say, but the LTV on these customers may, alone, make this a great idea. Add to it the only-when-I-need-it-now buyers, and it may well have an impact. In the end, however, if the experience is not at least as good as the less convenient experience, the cost and effort to do this will not have been worth it.”

In an interview with PYMNTS, Zachary Robichaud, instructor at the Ted Rogers School of Management and researcher at Toronto Metropolitan University, said the development underscores Amazon’s commitment to pushing the boundaries of convenience and using its technological infrastructure and logistics network to meet evolving consumer expectations.

“Rapid delivery aligns with the growing demand for instant gratification in eCommerce, particularly in the grocery sector, where freshness and immediacy are critical factors,” he said. “However, this strategy isn’t without challenges. Achieving such fast delivery requires substantial investment in local fulfillment infrastructure, such as micro-fulfillment centers and advanced inventory management systems. Additionally, it demands seamless coordination between technology and human resources to ensure accuracy and efficiency at this speed.”

Walmart, Robichaud said, “continues to leverage its extensive brick-and-mortar network and well-established grocery operations to compete. Its strengths lie in its scale and ability to blend physical and digital retail channels effectively through services like curbside pickup and same-day delivery.”

Here’s a look at other developments from Amazon and Walmart in the past week:

Amazon Highlights

• Amazon Launches Hyundai Car Sales

Vehicle buyers in 48 U.S. cities can now buy a new Hyundai directly through Amazon, marking an expansion of Amazon Autos. The online platform allows customers to browse local dealer inventories by make, model and other criteria, receive instant trade-in valuations, secure financing, and complete their purchase online, with transparent pricing and no haggling. Once the purchase is finalized, customers can schedule a pickup at their local dealership. In addition to streamlining the buying process, the platform offers Prime members fuel savings of 10 cents per gallon at approximately 7,000 participating gas stations. Amazon plans to expand the service next year with additional automakers, new cities and added functionality. The initiative aims to provide customers with a simple, transparent and familiar shopping experience while giving dealers a new sales channel.

• Amazon Targets Paid Reviews With Influencer Surveys

Amazon is surveying influencers about product testimonials they’ve posted on social media platforms like YouTube, TikTok and Instagram, signaling the company’s focus on combating paid reviews. The questionnaires, which ask influencers about their interactions with product sellers, come amid new Federal Trade Commission regulations that ban businesses from paying for consumer reviews and impose penalties for violations. While paid reviews have been prevalent for years, the rise of influencer culture has intensified concerns about undisclosed product promotions. Amazon’s move follows its ongoing efforts to fight fake reviews, with the company claiming to have blocked over 250 million suspected fraudulent reviews in 2023 and pursued legal action against more than 150 fake review brokers. It remains unclear how Amazon will use the responses from the surveys or how effective the initiative will be.

Walmart Highlights

• Walmart to Roll Out Caroline’s Carts for Accessibility

Starting in early January, Walmart will introduce Caroline’s Carts at all its U.S. locations. The carts are designed to improve accessibility for individuals with disabilities or mobility challenges. They feature a wide, built-in seat and a weight capacity of up to 250 pounds. Caroline’s Carts are specially designed to accommodate children and adults, providing a safer and more comfortable shopping experience. The move is part of Walmart’s plan to enhance accessibility, which includes other initiatives such as sensory-friendly shopping hours and same-day prescription delivery. The rollout of Caroline’s Carts, expected to be completed by 2025, will see 8,000 carts distributed across the retailer’s 4,614 U.S. stores.

• Sam’s Club Unveils Tech-Driven Redesign

In the fall, Sam’s Club reopened its Grapevine, Texas, location with a redesigned, tech-driven experience aimed at enhancing shopping and work environments. The new layout features a spacious, register-free “dance floor” where members can explore products, access online exclusives, use Scan & Go, and have items shipped directly to their homes. The store also includes various services like a sushi island, home meal solutions, and full-service pharmacy and optical centers. Technology upgrades, such as artificial intelligence, computer vision and automated systems, have been implemented to improve associates’ workflow, allowing them more time to engage with customers. The remodel prioritizes convenience, digital shopping and improved in-store experiences, setting a new standard for Sam’s Club’s future retail strategy.

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