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Amazon has a new service for those who know what they want from a nearby store, but just don’t have the time to pick it up.
The ecommerce company said Monday that it is rolling out a service for Prime members in several cities that offers same-day delivery service from retail stores. This follows a report last month from CNBC that said Amazon was testing a service that made deliveries from malls.
Here’s how it works:
- Prime members can shop from a curated selection of national brands on Amazon’s website or app, and select same day delivery.
- Once the order is made, an associate at the store fulfills the order.
- An Amazon delivery partner then picks up the order and brings it to a customer’s door.
A few more key details:
- Brands available at launch include PacSun, GNC, SuperDry and Diesel. Sur La Table and 100% Pure are expected to join in the coming months. Categories available include everyday essentials, beauty, pets, toys, electronics and apparel.
- Cost: The service is free for Prime members, provided that they spend $25. It's $2.99 for members who spend below $25.
- Locations: The same-day delivery service is initially available in select ZIP codes in 10 cities. These include Atlanta, Chicago, Dallas, Las Vegas, Miami, Phoenix, Scottsdale, Seattle and Washington D.C.
“The expansion of Amazon’s Same-Day Delivery to include beloved brands delivered directly from nearby retail locations is just another way we are offering customers even greater selection, at faster speeds,” said Sarah Mathew, director of Amazon Delivery Experience, in a statement. “We are excited to see this new model come to life and look forward to adding more brands, stores, and locations to the program.”
Amazon goes to the mall
Amazon rose as a disruptor of stores at malls and shopping centers, putting its scale and speed to work to dwarf incumbents. Now, it is making these more traditional retailers part of its network.
Monday's announcement signals that the company is continuing to add delivery capabilities as it seeks to continue growing. In recent years, Prime added increasingly faster delivery times as it built out its fulfillment network, from two-day to same-day to same-afternoon. As it built, a key piece of the equation was proximity. Being able to place items close to a customer could make delivery more efficient.
Tapping into the inventory available at retail stores located in shopping centers near a customer is a way to continue to grow the items available for fast delivery. At the same time, it can do so without building new warehouses or adding full-time employees. Amazon is leveraging store associates employed by the retailer to become part of the fulfillment process, while deliveries are completed by independent contractors.
The ecommerce giant's work with brick-and-mortar stores shows how physical and digital retail are blending. With a return to more in-store shopping following the relaxing of pandemic restrictions, many retailers have noted that shoppers are moving between digital and physical realms, rather than choosing one or the other. As a Google executive noted at the Retail Innovation Conference & Expo in May, a search may start online, but a person may end up completing the order at home. Amazon’s new service brings both sides of that equation into its own network. Given that Jungle Scout shared last year that 74% of consumer product searches begin on Amazon, the company has plenty of existing strengths from which to build on this front.
For Amazon, this also appears to be part of a new wave of expansion to grow work with other retailers, and work outside its own facilities. In other recent developments, a report from Recode indicated the company is testing delivery partnerships with local stores in rural areas. Meanwhile, it is moving beyond its own platform in the ecommerce realm. The recently-announced Buy with Prime service will bring checkout and two-day shipping guarantees of the membership service to the websites of direct-to-consumer brands. A Grubhub subscription offered with Prime is also offering delivery from local restaurants, though those orders will be managed by Grubhub at launch.Coming after Amazon closed 68 of its own physical stores like Amazon Books, Amazon 4-Star, and Amazon Pop Up earlier this year, these moves show how Prime is becoming a gateway to many different third-party retailers. The company’s expansion in grocery and recent opening of an apparel store shows continued willingness to explore in brick-and-mortar, but it won’t only be taking a direct approach. As this becomes the case, Amazon’s ability to put its vast logistics capabilities to work will only become more of an advantage. Additional offerings like advertising and tools like the recently-launched store analytics point toward an opportunity to expand relationships with these retailers through services. The fact that those involved in the new same-day delivery service are adding items to the digital shelf shows how Amazon's ecommerce marketplace can still be at the center of this expansion.
Trending in Retail Channels
The job market continues to hum.
The labor market continued to show strength to start 2023, as the monthly jobs report posted big numbers.
Key data from the U.S. Bureau of Labor Statistics’ monthly jobs report:
- Unemployment fell to 3.4%, ticking down from 3.5% in December to remain at historic lows.
- The economy added jobs to the tune of 517,000, which bested the 2022 average of 401,000.
- Average hourly wages rose by $0.10, marking year-over-year growth of 4.4%.
The Current’s view: The labor market continues to be an economic outlier. While there are signs of consumer pullback and belt-tightening among tech companies and retailers after months of high inflation, the job picture remains bright. While tech companies and some retailers are cutting back markedly, there are few signs of the widespread “pain” that economists predicted in this indicator of the economy.
What brands and retailers are thinking: Jobs are a major indicator of demand, and the labor market continues to hum along. That means the consumer pullback is tied to choices about discretionary spending and holding off on certain purchases in the face of high prices, moreso than being unable to afford items altogether.
What the Fed is thinking: Here’s more evidence that a soft landing might be possible. The Fed has been raising interest rates to bring down inflation. There is risk that this will slow down the economy, including employment. There was some slowing in job growth in December, but this report indicates labor market softening still hasn’t happened for a sustained period, even as inflation is cooling. After the central bank scaled back its latest interest rate hike to 0.25% on Wednesday, Fed Chair Jerome Powell said he sees a “path” to bringing down inflation without a significant rise in unemployment. Here’s one more piece of data to bolster that belief.
Keep in mind: The labor market is still out of balance between supply and demand. This report shows a big rise in jobs and the labor force participation rate remaining the same. Job openings actually increased in December, the Labor Department found. So there a still the case. Eventually, it will likely have to come into balance. But given the unpredictability of this economic era, it’s tough to know when, or even how.