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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
Labor disputes on the West Coast could cause further disruption heading into peak season.
When the first half of 2023 is complete, imports are expected to dip 22% below last year.
That’s according to new data from the Global Port Tracker, which is compiled monthly by the National Retail Federation and Hackett Associates.
The decline has been building over the entire year, as imports dipped in the winter. With the spring, volume started to rebound. In April, the major ports handled 1.78 million Twenty-Foot Equivalent Units. That was an increase of 9.6% from March. Still it was a decline of 21.3% year over year – reflecting the record cargo hauled in over the spike in consumer demand of 2021 and the inventory glut 2022.
In 2023, consumer spending is remaining resilient with in a strong job market, despite the collision of inflation and interest rates. The economy remains different from pre-pandemic days, but shipping volumes are beginning to once again resemble the time before COVID-19.
“Economists and shipping lines increasingly wonder why the decline in container import demand is so much at odds with continuous growth in consumer demand,” said Hackett Associates Founder Ben Hackett, in a statement. “Import container shipments have returned the pre-pandemic levels seen in 2019 and appear likely to stay there for a while.”
Retailers and logistics professionals alike are looking to the second half of the year for a potential upswing. Peak shipping season occurs in the summer, which is in preparation for peak shopping season over the holidays.
Yet disruption could occur on the West Coast if labor issues can’t be settled. This week, ports from Los Angeles to Seattle reported closures and slowdowns as ongoing union disputes boil over, CNBC reported. NRF called on the Biden administration to intervene.
“Cargo volume is lower than last year but retailers are entering the busiest shipping season of the year bringing in holiday merchandise. The last thing retailers and other shippers need is ongoing disruption at the ports,” aid NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “If labor and management can’t reach agreement and operate smoothly and efficiently, retailers will have no choice but to continue to take their cargo to East Coast and Gulf Coast gateways. We continue to urge the administration to step in and help the parties reach an agreement and end the disruptions so operations can return to normal. We’ve had enough unavoidable supply chain issues the past two years. This is not the time for one that can be avoided.”