Amazon Partnering With Retailers for Package Pickup

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Amazon.com (NASDAQ: AMZN) is expanding its package pickup Locker concept with Counter, a partnership with retailers that lets customers pick up an order in-store. Where Amazon Lockers let customers access a storage locker in a retail location to retrieve their parcels, Counter uses a store’s employees to fetch the item for them.” data-reactid=”11″>Amazon.com (NASDAQ: AMZN) is expanding its package pickup Locker concept with Counter, a partnership with retailers that lets customers pick up an order in-store. Where Amazon Lockers let customers access a storage locker in a retail location to retrieve their parcels, Counter uses a store’s employees to fetch the item for them.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The first retailer that signed up for the program, Rite Aid (NYSE: RAD), will start with 100 stores initially but will expand to 1,500 locations by the end of the year, and Amazon is looking for more retailers to join.” data-reactid=”12″>The first retailer that signed up for the program, Rite Aid (NYSE: RAD), will start with 100 stores initially but will expand to 1,500 locations by the end of the year, and Amazon is looking for more retailers to join.

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Image source: Rite Aid.

Risky business

There aren’t a lot of retailers that would be a natural fit for Counter because Amazon is competing against most of them. Making it easier for Amazon customers to do their shopping at the e-commerce site only serves to undermine the retailer’s sales.

Retailers in the past that installed Lockers in their stores, like Staples and Radio Shack, realized quickly they were simply facilitating sales of products they could have been selling themselves. Amazon customers were coming to their stores, but only to pick up their orders: They weren’t shopping.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Although Amazon has ambitions to break into the online pharmaceutical market, having bought online pharmacy PillPack last year for just under $1 billion, right now the e-commerce giant isn’t a particular competitor to Rite Aid, which also has Amazon Lockers in its stores. The pharmacy operator doesn’t have to worry it is pushing customers away from its own business and helping a rival succeed.” data-reactid=”28″>Although Amazon has ambitions to break into the online pharmaceutical market, having bought online pharmacy PillPack last year for just under $1 billion, right now the e-commerce giant isn’t a particular competitor to Rite Aid, which also has Amazon Lockers in its stores. The pharmacy operator doesn’t have to worry it is pushing customers away from its own business and helping a rival succeed.

Growing healthcare push

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="That was the fear when Kohl’s (NYSE: KSS) agreed to serve as a package return drop-off location for Amazon. The department store was making shopping on Amazon a virtually pain-free experience by bearing the cost of packaging the item to be returned and shipping it back to Amazon for free.” data-reactid=”30″>That was the fear when Kohl’s (NYSE: KSS) agreed to serve as a package return drop-off location for Amazon. The department store was making shopping on Amazon a virtually pain-free experience by bearing the cost of packaging the item to be returned and shipping it back to Amazon for free.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="However, since Kohl's is rolling out the program nationally, it is apparently having the intended effect of getting people into the department store and then shopping its racks — there's even data analysis that seems to back it up — but it still looks like a risky endeavor.” data-reactid=”31″>However, since Kohl’s is rolling out the program nationally, it is apparently having the intended effect of getting people into the department store and then shopping its racks — there’s even data analysis that seems to back it up — but it still looks like a risky endeavor.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Rite Aid shouldn't have that worry because the two don't compete at the moment, but Amazon is diving deeper into the space, having also launched a healthcare joint venture with Berkshire Hathaway and JPMorgan Chase. Amazon says that when it launched the program in the U.K. with clothing retailer Next, the service was well received and drove "strong customer engagement and additional foot traffic for partners."” data-reactid=”32″>Rite Aid shouldn’t have that worry because the two don’t compete at the moment, but Amazon is diving deeper into the space, having also launched a healthcare joint venture with Berkshire Hathaway and JPMorgan Chase. Amazon says that when it launched the program in the U.K. with clothing retailer Next, the service was well received and drove “strong customer engagement and additional foot traffic for partners.”

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="That's what Rite Aid needs. Its first-quarter earnings report last week was another disappointment, with falling sales, widening losses, and declining retail pharmacy revenues. Anything that gets people into its stores could help.” data-reactid=”33″>That’s what Rite Aid needs. Its first-quarter earnings report last week was another disappointment, with falling sales, widening losses, and declining retail pharmacy revenues. Anything that gets people into its stores could help.

The need for physical locations

It also expands on Amazon’s own bricks-and-mortar retail ambitions. Having driven a ton of sales online and away from physical retailers, it has since discovered that more of an omnichannel approach is necessary.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="First, home delivery of packages isn't always possible or convenient, so having a physical place where packages can be retrieved is essential. It's one of the reasons Walmart is proving to be adept at digital sales, because it offers a vast network of thousands of stores that can serve as pickup locations for orders purchased online.” data-reactid=”36″>First, home delivery of packages isn’t always possible or convenient, so having a physical place where packages can be retrieved is essential. It’s one of the reasons Walmart is proving to be adept at digital sales, because it offers a vast network of thousands of stores that can serve as pickup locations for orders purchased online.

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