Drones Inside Retail Spaces

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As drone technology improves, drone applications are changing the retail landscape. Drones can be used inside of retail spaces for a variety of purposes, including security, advertising, item tracking and in-store delivery.  This emerging trend presents competitive advantages as well as potential legal issues.

The use of drones for advertising was recently illustrated when DC Comics collaborated with Intel to promote the Wonder Woman film. DC and Intel attached small lights to drones and programed them to create a “light show” of a flying Wonder Woman logo. This very same technology will soon find itself inside of retail locations.

Drone-mounted inventory tracking systems are also useful to track retail inventory and mitigate shrink.  Lost merchandise and poorly tracked inventory causes substantial losses – in 2013 Walmart alone lost $3B due to lost inventory and inventory discrepancies.  Now, however, with improvements in RFID (“Radio Frequency Identification”) technology, drones equipped with RFID readers can quickly locate inventory in stores or warehouses.

Patent pending technology will also allow drones to find merchandise in-store and deliver it to check stands. Instead of waiting for a store employee to run and find the exact item you desire, a drone will find, pick up and deliver the item to a check stand while you wait. Walmart recently submitted a patent application for technology that will make such a delivery system possible.

While novel uses of drone systems can benefit both consumers and retailers, there are risks to consider. Indoor drone use may increase the risk of injury and property loss.  And, much like outdoor drone use, indoor drone use will likely become regulated, resulting in more complex compliance thresholds and increased operating expenses. Heavy regulation could outweigh the value of adopting in-store drone-mounted technology systems. Additionally, there are privacy concerns at issue with widespread indoor drone usage, as drones fitted with cameras can be more intrusive than conventional surveillance.

As online marketplaces grow, innovation for traditional retailers is increasingly important. Drones – the future – will have an increasing impact on profitability. Retailers should consider the potential issues associated with implementing this technology in-store.  Retail operations seeking to use drone technology for security monitoring, advertising, inventory tracking, or in-store delivery should consult their liability insurance carriers and study existing drone regulatory frameworks.

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