Walmart's 270+ Store Drone Expansion & Why Everyone Wants Deliveries in 25-45 Minutes | NRF 2025

Hello everyone, this is Omnitalk Retail.

I'm Chris Walton.

And I'm Anne Mazinga.

And we are coming to you live from New York City NRF 2026 from the Vusion booth, booth number 4921.

And standing between us is Greg Cathy.

He's been on the show before.

We're excited to have him back.

And Greg is the SVP of digital fulfillment transformation at Walmart.

Greg, welcome back to Omnitalk.

Happy New Year.

Happy New Year.

Yeah, you know, we're not going to cut you any slack.

We're just going to dive right in because we have about a thousand questions.

So, you know, casual first question.

What's your biggest priority in 2026?

Greg, when you think about fulfillment at Walmart, let's talk about it.

Two things that customers want.

Yes.

They want great items and they want them fast.

Yes.

So what we're working on and focused on is getting customers whatever they want as fast as they want it.

Okay.

So speed for us is where all the focus is.

Yeah.

And I can attest to that as, as a Walmart plus customer.

The speed is just remarkable.

It's faster every single time I use it.

I feel like.

So yeah, Walmart's or Ann is the biggest Walmart plus convert in the human history of the world.

Greg, I don't know if you know.

That, but I, I wanted to tell.

I got some data on, got some data on that.

And the, this wonderful blouse that you're wearing looks awfully familiar.

Yes, that's because it's also was delivered to me as a Walmart blouse because customer from the Walmart six miles from my house.

That's awesome.

Now Greg, I don't want you to drone on too long on this next question, but as competitors keep getting faster, they keep pushing the envelope on speed.

What is Walmart doing to continue to beat the competition when it comes to speed of delivery?

Yeah, we're focused.

As I said, we're focused on speed every single day and we're getting faster and faster.

We changed our promise.

We used to give it very static like it would be a one hour promise or a three hour promise or something along those lines.

Now what we'll do is we will tell you we're going to deliver this in 25 to 40.

Yeah, right, I've seen that.

Yeah.

So we love the fact that we can narrow that down for customers and they understand exactly when they're going to get this, their items.

The other thing, and we just announced this this morning, John and Sundar Announced this, our CEO and CEO of Google that we are expanding our relationship with Wing, which is an Alphabet company, and we are going to 150 more stores with drone delivery.

So with this announcement, we will be making this program a coast to coast program.

So we will have operations all the way from Miami, think St. Louis, Cincinnati, all the way to LA.

And we're really excited about this.

So, Greg, I'm curious because I remember when drones first burst on the scene.

Right, and so now you guys seemingly are putting more investments into it.

You've had the successful test that we've talked about in the past.

You're now expanding the rollout.

What's working for you about it?

What insights can you share about why you're making these investments?

Yeah, we did our test in Dallas and the test was wildly successful.

We like the results.

The reason why we're expanding it is because customers want us to do it.

And so the number one piece of feedback that we get from a drone regarding drones is when is it coming to my neighborhood?

When will I have the ability to, to do this?

Like, the word of mouth is just huge.

And so we had it in Dallas with wing and about 2324 stores.

We did 100 store announcement back in June of last year, taking it to five cities across the southeast and now another 150.

So we'll have over 270 stores nation across the nation that will have the ability to do drone delivery and who's.

Using it and what are they buying.

Are there like specific occasions that people like what triggers a drone delivery?

Everyone's using it.

Okay.

There's not one cohort really that goes higher than another cohort.

Typically there's a couple of use cases.

Okay.

So one is I forgot an item, so I'm going out of town.

I need a charger.

My kids take my charger, so maybe a kid took a charger.

I need a charger.

I need it quick because I got to get to the airport.

Drone delivery.

I forgot an item.

So we forgot eggs.

We want to do breakfast and we don't have any eggs.

It's hard to do breakfast.

We have a lot of items for child care, so it is.

Diapers are not very effective without wipes.

So you need wipes and if you forget those, you need, you need to make sure that you're, you're getting that.

Take that one to the bank for sure.

Greg, you heard it here, right?

And probably my most favorite use case that we see in the data is people love getting things for their pets, their fur Babies.

So we see a lot of pet treats, pet toys, things like that that folks are wanting.

And then the final one that I'll give you is surprise and delight.

So if it is your child's birthday party and you want the candles and ice cream to show up and all of the kids go outside to be able to watch this drone, it is a magical experience.

And that's normally what gets posted on social media the most because people are just amazed by the service.

Like a new age pinata almost for a birthday party in a lot of ways.

We do not, we do not need anybody messing with a package as it comes.

Right, right, right, right.

Don't, don't pin.

It goes on the ground and then you just open it up.

It's like frenzy once you open it up.

Right, right, right, right.

Well, Greg, I'm curious from your perspective, like, what had to be true or what, what technology had to be in place?

How far did it have to come for you as an organization to say, yes, we're going to continue to roll this out.

Were there things that just like, it finally got there or it made sense?

It pencils now, like what, what was the trigger to kind of go forward on more stores?

The, the biggest thing for us is customer demand and the overwhelming customer and markets.

We just opened Atlanta.

Atlanta was wanting us to come to their market and do this.

So they were asking for it.

We're opening Houston next week, I believe.

I think it's next Thursday.

We're going to open the Houston market.

They are asking for this service.

So people are asking for it.

The governmental officials, mayors are saying, hey, can you come to our city?

We'd love to have this technology.

One of the good, one of the big things is it takes vehicles off the road.

Right.

So if you, if you've ever been to Atlanta, there's a bit of some traffic issues from time to time.

So the more that we can convert over to drone, the more it'll make it easier for those customers and it's better for the environment.

So we're excited about it.

That makes sense.

Okay, I want to shift into AI a little bit.

Fun question for us to be able to ask people is just how you're using AI.

So how is AI most useful right now for you and your team when it comes to delivery and fulfillment at Walmart?

We, yes, we lean in from an AI standpoint, generative, physical, AI, agentic AI.

So we spend a lot of time in that space.

A couple of use cases.

One, as we think about mapping and mapping locations Moving from a very rigid, inflexible mapping solutions to more of an agentic and generative mapping solutions that help us marry up all of our associates customers that need merchandise.

And even in very rural areas, there's towns in Texas that are sub 4,000 people.

Right.

Very small towns where right now we can deliver in sub 30 minutes because we're using this AI to help route and where we're going and where we're moving merchandise.

Wow.

Yeah, so.

Oh, go ahead.

I was just gonna say the other, the other one that I was sitting here thinking of is we also use it in the, in the rare case that a customer can't get what they need, like they've ordered something and for whatever reason, we didn't have it when we were gonna fulfill it for that customer.

We use a lot of AI to help from a substitution standpoint.

Okay.

So to make sure that we know and give you offerings for exactly what you would want.

And customers love, love that they understand from time to time and to be able to give them the solution that they want and something that'll make sense.

It really makes sense.

Something closer, I imagine, to what they would have wanted.

Yeah, that makes sense given the importance of grocery in your business too.

No doubt.

All right, so it sounds like a lot of things are going well for you guys at Walmart.

So I'm curious, what do you think though?

Put you on the spot a little bit here, Put your feet to the fire.

What do you think the biggest challenges are for you in 2026 and how are you planning to navigate them?

Greg, the biggest challenge, I think, for everyone in retail, not just us, is customers are continuing to raise their expectation.

They are wanting more items, they're wanting those items faster.

A little bit of how I started.

And so I believe that the customer expectation is only going to grow.

It's getting higher and higher.

And we see that from a delivery standpoint, they are asking for items faster and faster and faster.

And so I think as customer expectations grow, what we've done year after year after year is deployed.

Associates and our technology people led tech powered to be able to serve those demands for those customers.

So we're excited the expectations are rising, we're ready to meet those expectations and we're excited for 2026.

Greg, I'm curious, is that demand across the board, you know, when you look at all the Walmart customers, is it generally speaking, like, can you attribute it to everyone that wants that or is it a certain segment of the Walmart customer population?

It's a really interesting question because you would think maybe one cohort would want that over another cohort.

Everybody wants.

Everybody's wanting it.

Everyone is time starved.

Yeah, people are time starved.

Just wrote an article about this.

That's why I was asking.

Yeah.

So what they're looking for is for us to give them time back in their life so that they can do the things that really matter for them.

Yeah.

Okay, well, Greg, you gave us a couple of examples, but you already reached 95% of the country with 3 hour or less delivery.

How are you going to get that last 5%.

And always raising the money?

Is that on the annual goals there, Greg, that last 5%?

You sound like an executive at Walmart that you could.

You'll fit right in.

We.

So proximity is our superpower.

We do have a Walmart store located within 10 miles of 90% of the US population.

Okay.

So our ability to use AI and think about routing software and how we get items to people, that's a huge benefit for us.

We'll also think about.

You mentioned drones.

Drones may be an opportunity for us to think about how do we get to those, to those final 5%.

Because a lot of those, a lot of times those are in major metros.

Right?

Like major, major metros.

And so if you look at where we're going with drones, first, places like Atlanta, places like Houston, places like.

Right.

Miami, that allows us to get more items to more people faster.

Right, Right.

I'll come back next year and let you know how we did on the.

I expect that number would drop at least three.

Okay.

Oh, my Lord.

Just 100% of cell blocks.

We're tracking it, Greg.

We're tracking it.

And we're gonna hold you to that, too.

All right?

Next year we'll be, we'll be revisiting with you on how drones is going.

So, man, thank you so much.

You bet.

This was a blast.

I really enjoy it.

Always look forward to this.

Really enjoy it.

And the candor, too, that you guys always bring to the party is just excellent.

So again, Greg Cathy of Walmart, thanks to Vuzion for sponsoring our coverage here today.

We're gonna be here for a little bit more today and we'll be back Monday and Tuesday as well.

If you want to stop on by, see them, see us.

Come to booth 4, 49, 21.

And until next time, Anne, be careful out there.