Retail Report

Drone Package Delivery Closer To Reality Than Ever Before

Back in 2013, Amazon made headlines with a video depicting a branded drone that could quickly and efficiently deliver customer orders. At the time, many retailers scoffed at the idea. In fact, eBay CEO John Donahoe mocked the notion of drone deliveries as a “fantasy.”

Things have changed over the past two years. Sam’s Club made headlines earlier this year when it announced that it might start selling drones to its members. Now, Reuters reports that Walmart has applied to the Federal Aviation Administration for a permit to test fly drones itself.

Walmart indicated multiple uses for the tiny aircraft. These include performing routine tasks at distribution facilities, as well as deliveries to both stores and customer homes.

Specifically, in addition to having drones take inventory of trailers outside its warehouses and perform other tasks aimed at making its distribution system more efficient, Walmart is asking the FAA for permission to research drone use in “deliveries to customers at Walmart facilities, as well as to consumer homes,” according to the Reuter’s piece, which cited the retailer’s FAA application.

The FAA is currently working on rules that will govern the commercial use of drones. If Walmart receives permission for testing, it would be using drones manufactured by China’s SZ DJI Technology Co Ltd., according to Reuters.

The decision to move forward with drone testing is likely related to Walmart’s ongoing efforts to develop its e-commerce and omnichannel platforms. Walmart has been trying to catch up with Amazon’s online success, and the retailer has initiated a mix of initiatives, including an increase in the number of distribution centers, grocery delivery and curbside pickup, and a popular smartphone app.

Despite these efforts, however, Amazon has continued to up the ante with innovations such as one-hour delivery for prime customers in some local markets. Drone delivery testing may prove a major change agent in the ongoing battle for retail sales.

Outdoor Equipment Retailer REI to Close for Black Friday

While some retailers have made a practice of starting Black Friday sales as early as Thanksgiving Day, outdoor recreation retailer Recreational Equipment Inc. plans to take Friday off.  Entirely.

REI, headquartered in Kent, Washington, will be celebrating Black Friday by giving its store associates a paid day off, encouraging them to spend the day outdoors. The decision has left some analysts scratching their heads, though others have praised the move.

REI’s decision has a lot to do with its brand. Unlike some retailers, REI is a cooperative. Its members are also its customers, people who believe in the REI brand and what it stands for. By refusing to participate in the commercialism of Black Friday and encouraging employees and customers alike to get outside, REI reinforces its branding while also generating media attention.

In the media, CEO Jerry Stritzke was quoted as saying, “For 76 years, our co-op has been dedicated to one thing and one thing only: a life outdoors. We believe that being outside makes our lives better, and Black Friday is the perfect time to remind ourselves of this essential truth. We’re a different kind of company — and while the rest of the world is fighting it out in the aisles, we’ll be spending our day a little differently. We’re choosing to opt outside, and want you to come with us.”

Of course, some analysts have noted that REI is losing revenue by staying closed on the day after Thanksgiving, a loss that REI executives are apparently willing to risk.

REI won’t remain entirely without revenue on Black Friday, though: Customers will still have the option of shopping the REI website.

Walmart Adopts New, IFCO Sustainable Produce Containers

Walmart and IFCO North America, a packaging solutions provider, recently announced that Walmart has adopted IFCO’s wood-grain, reusable plastic containers for Walmart’s produce. These containers will be used for both shipping and store displays.

The new containers combine several features that make them a good fit for Walmart’s commitment to both sustainability and improving its fresh offerings.

The containers are both reusable and have multiple applications. The sturdy, wood-grain crates serve as both shipping containers and merchandising tools.

The crate material protects the produce while also helping to maintain cool, consistent temperatures. This helps to ensure that customers will have access to produce that is fresh, visually appealing and tastes great.

By prioritizing produce quality and merchandising, Walmart continues in its commitment to providing communities with healthy food options.

IFCO has worked with Walmart since 2000 and share’s the retailer’s commitment to quality. Crates are sanitized using state-of-the art processes and products.

Both companies are excited about this development.

“This agreement expands IFCO’s long and successful partnership with Walmart that began in 2000,” said IFCO president Daniel Walsh in a recent press release. “IFCO is committed to deploying our logistics expertise, production capacity, and global infrastructure in service to our retail partners. We are pleased Walmart, the world’s largest retailer, has once again turned to IFCO, the leading global provider of reusable packaging solutions to ensure the successful implementation of its [reusable containers] program.”

Walmart also praised the partnership.

“IFCO is one of Walmart’s most important partners and is a natural fit to help us meet our ambitious fresh produce goals in 2015 and beyond,” said Walmart’s vice president of produce, Dorn Wenninger. “No other [reusable containers] company can match IFCO’s scale and experience, and we look forward to working together to enhance the in-store experience for Walmart shoppers.”

According to the press release, the initial shipments will focus on dry produce, such as apples, potatoes, and citrus fruits, though eventually they will also be used in the shipment of wet items.