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Brazilian Retailer Tests Drones to Move Merch From DCs to Stores

Brazilian multi-channel retailer B2W may have figured out a cost-efficient way to navigate the country’s headache-inducing logistics: drones.

As Boston Consulting Group (BCG) wrote in 2017, the Latin American nation’s political turmoil and economic straits mean “operating in Brazil is not for the faint-hearted.” BCG cited metrics illustrating the extent of Brazil’s challenges at the time: warehousing costs run the gamut from $0.11 to $4.28 per case, while the cost to transport could set you back as little as $49.25 or a whopping $1,665.50 per ton.

B2W, a subsidiary of Lojas Americanos, will see if drones can do a better job of ferrying goods from 15 distribution centers and 200 hubs to the 1,500 stores it operates across Brazil, according to a Reuters report.

Fábio Abrate, chief financial officer for B2W, told Reuters, “We are working closely with the air space regulation agency, Anac, to help create these rules in Brazil,” noting the as-of-yet unregulated commercial drone industry in the country.

By January 2021 Abrate expects its distribution operations will include the drones, which feature software provided by Brazilian engineering firm SMX Systems. The aircraft are capable of flying a maximum payload of 4.4 pounds at speeds topping out at 22.37 miles per hour.

B2W doesn’t have any plans to fulfill customer orders via drone “for now,” Abrate added.

The battle to dominate in the drone space is heating up worldwide.

Wing, a drone delivery service by Google, is already dropping coffee off to customers in Australia, and the company gained a critical FAA approval earlier this year. And despite setbacks in launching its Prime Air drones domestically, an undeterred Amazon revealed a new hybrid chopper-plane craft last month that could someday parachute the brand’s brown boxes onto your lawn.

Hewing to the mantra that “everything Amazon does, we can do better,” Walmart reportedly filed more drone patents in the past year than the Seattle-based tech innovator.

Of course in China, Alibaba rival was an early mover in incorporating drones into logistics.