Battle of the Drones: How CVS and Walgreens' upcoming drone delivery coverage compares
Now that UPS ($NYSE:UPS) has been granted a Federal Aviation Administration certificate to make drone deliveries, it's making deals with retailers to put its flying robots to work. Yesterday, CVS ($NYSE:CVS) released a statement saying it would begin making drone deliveries in partnership with UPS.
This move follows a similar one made by Walgreens ($NASDAQ:WBA) last week. That pharmacy announced it had begun drone delivery testing in Christiansburg, Virginia in partnership with drone company Wing.
Given customer needs and traffic patterns, experts are saying rural areas like Christiansburg (population of 21,000) are most likely to be the focus of CVS and UPS's drone launch. These areas will help serve locations in which customers may be far enough from CVS and Walgreens locations, but close enough to make drone delivery sensible.
We track close to 20,000 store locations between CVS and Walgreens. As the map above indicates, store locations are clustered in population centers. Those areas, where populations are already well-served, are unlikely to see drone delivery service, at least in its nascent.
By running a heatmap on the above store-location data to determine how well-served various populations (by CBSA) are, we get a better sense of where CVS and Walgreens may look to add drone delivery first.
The map above shows how well-served various areas are by extant CVS and Walgreens locations, by looking at the number of stores per population of 1,000.
In Christiansburg, where Walgreens is already testing drone delivery, store density is considered sparse. Meanwhile, enough infrastructure — multiple stores, major routes — exists to make the area a good candidate for drone delivery.
Looking at CVS's store density on its own shows a heavy density of stores on the east coast, but given the location populations of those areas, one can see several communities that may be served well by drone delivery service.
So far, UPS's drone delivery testing has been focused in Raleigh, NC, as it mentions in an October 1 press release. That release also mentions the construction of a "centralized operations control center" which, one could surmise, would dictate where it may begin delivery testing, especially in the retail space.
In the meantime, UPS has been on a hiring spree of massive scale as it heads into the holiday season.
In early September, UPS was hiring for 4,120 positions. As of this week, that number is more than 9,830 — an increase of 139%. We saw a similar uptick in hiring at UPS this time last year. Given the surge in hiring, UPS looks positioned well to handle the incoming logistics a new drone fleet would entail. UPS's drone fleet will be based on aircraft designed and manufactured by Silicon Valley company Matternet ($MATTERNET).
About the Data:
Thinknum tracks companies using information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.