Amazon will deliver from nearby stores

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.