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Walmart seeks U.S. permission to test drones

Walmart (WMT) has asked the U.S. government for permission to test drones for home delivery and grocery pickup as it seeks to match arch-rival Amazon.com (AMZN), which is testing to better fill and deliver online orders.

“With this application, Walmart seeks to continue its role in not only making the present distribution system more efficient … but also to conduct research and development to support the future extension of that distribution system direct to customers,” Walmart said in its application to the Federal Aviation Administration, which was reviewed by Fortune. Walmart has been conducting indoor tests of drones and now wants to test them outdoors.

Reuters first reported the news of the application.

Earlier this month, Wal-Mart Stores, Walmart’s parent, frightened investors when it said its profit would take a big hit next year, as it poured hundreds of millions into its e-commerce operations. The retailer generates about $13 billion a year online, much more than just two years ago but only about a sixth of Amazon’s tally. In addition to Amazon, Google (among others) is conducting tests with drones ahead of the expected release of rules by the FAA in the coming months.

Walmart told the FAA in its application that it wanted to test drones for grocery pickup, a service it recently expanded and plans to offer in 43 markets next year. Other uses for the drones would include taking stock of trailers and other items in the parking lot of a warehouse, with the help of electronic tags. That would speed up inventory management, something key as the retailer begins to use its stores to help ship online orders.

Walmart also aims to test whether a drone could be deployed from a truck to “deliver a package at a home and then return safely,” according to the application.

“Drones have a lot of potential to further connect our vast network of stores, distribution centers, fulfillment centers and transportation fleet,” Walmart spokesman Dan Toporek told Reuters.