In-store pickup is a possibility if you have a website, and a store. Amazon, the e-retail king, lacks one of these two very necessary ingredients – stores. Store-based retailers are able to bypass shipping costs by offering the in-store pickup programs described in my previous post. A large percentage of the price paid on items purchased from Amazon comes from the cost of shipping. In-store pickup provides shoppers with more product options, while also allowing retailers to sell items cheaper due to the cost saved in bulk shipping. Today, with retailers rolling out in-store pickup services very rapidly, Amazon needs to find a way to keep a hold on to its niche. To keep its prices competitive, the online retailer needs to find a way to reduce shipping costs much like Walmart and Best Buy.
Yesterday, we saw the first glimpse into the strategy that could possibly keep Amazon ahead of the game. The strategy involves a partnership with the Seven & I Holdings subsidiary, 7-11. Amazon is testing a system that will place computerized lockers in 7-11 stores. The first set of computerized lockers can be found in the 7-11 store at 1522 East Madison Street in Seattle, WA. The lockers are poised to launch in the UK in the near future too.
When Amazon customers place their order, they receive a barcode that they can print out or display on their mobile device. They can scan the barcode at their local 7-11 store to receive their PIN, use the PIN to open their temporary P.O. Box and off they go!
RetailNet Group’s forecast for 7-11 (See RNG’s Sales and Stores Forecast for 7-11) shows that the convenience store banner will have 6,878 stores in the US alone in 2015! If the trial is successful, Amazon could strategically choose 7-11 locations that would bring the highest level of convenience to its gigantic list of frequent shoppers.