Drones are small, unmanned aircraft used for various civilian, commercial and military purposes. Their technical features, such as their potential speed, maximum flight time, flight altitude and scanning capabilities, vary widely. Some high-end drones have sense-and-avoid systems, advanced cameras and transmitters.

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The global drone market, both the civilian and commercial segments, has grown in recent years. Civilian demand has surged as falling prices on lower-end models make them more accessible for recreation or aerial photography. Commercial drone sales have also climbed as the technology and the regulatory outlook improve, particularly in developed markets. The retail industry, more than any other sector, has embraced drones as a way to speed delivery and delight customers.

How companies use delivery drones

Drone usage is still in its infancy, but we already see explicit adoption across many user groups:

• Prosumer and recreation. High-end recreational drones continue to gain traction as more Realtors, wedding planners and other professionals use them for aerial photography.
• Commercial. Drones can perform effective inspections at a lower cost and with less downtime compared with traditional methods. They are used across many industries, including agriculture (for plant health monitoring, pest control, yield monitoring and land mapping), oil and gas (asset inspections, refinery testing and gas leak monitoring), utilities (vegetation management and visual inspections), telecommunications (cell tower inspections), mining (operation planning and stockpile management), real estate (site monitoring and planning, and advertising), insurance (liability damage assessments) and healthcare (supply delivery to remote or inaccessible areas).
• Delivery. The possibility of using drones to deliver lightweight packages faster has gained retailers’ attention, though widespread use is unlikely for some time, especially in advanced markets. Companies investing in this technology include online retailers, fast food restaurants and parcel delivery services.
• Government and military. Governments, especially those in developed markets, are using drones for everything from surveillance and patrols to disaster mitigation and combat.

Key considerations with delivery drones

Drone technology is still relatively new, yet it has the potential to improve operations and customer experience across many industries. As technology gets better and costs stabilize, adoption will continue to grow, and companies will need to consider a number of factors:

• Technological limitations and variations. Even at today’s low adoption rates, drones on the market vary widely, and finding a fit-for-purpose machine requires diligence. Companies must evaluate a drone’s potential distance, speed and altitude, as well as its cameras, sensors and ability to support live streams. Certain aspects of drone technology still fall short in key areas, and even seemingly basic steps, such as the best approach to dropping a parcel, remain complex.
• Economics and return on investment. The limited commercial use of drones and uncertainties around the technology complicate ROI analysis. Still, ROI potential will likely increase as software and analytics integrate with drone hardware. This should make it easier for companies to predict how and when to run inspections that are likely to yield meaningful data.
• Regulations and air traffic control. Countries are regulating commercial drones to widely varying degrees. Besides air traffic control, some countries are evaluating a drone user’s liability when the device damages property and studying drones’ compatibility with existing property laws. One important aspect for companies to consider is whether the drone would need to fly beyond the visual line of sight.
• Security and safety. Companies must consider how they will protect packages and drones from theft or damage, and how they will prevent incidents that could harm people and property, such as poorly executed package drops, drone crashes and even hacking.