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[12 comments]

Staples Becoming Amazon's Locker Room

November 7, 2012

Forget about becoming Amazon.com's showroom. Staples will soon become the e-tail giant's locker room.

According to Reuters, Staples has agreed to place Amazon lockers in all its stores across the U.S. For those not familiar with the concept, lockers set up in various store locations are designed to hold Amazon packages that weigh less than 10 pounds. The lockers are touted as a means for people to receive orders from Amazon who either have no space or are uncomfortable with deliveries being left at their door. Staples joins 7-Eleven as the most prominent retailers offering the service.

The apparent advantage for retailers, beyond the fee paid by Amazon for housing the lockers, appears to be the prospect of getting consumers into stores they might not have otherwise visited.

A Motley Fool piece questions whether Amazon Lockers inside Staples might encourage comparison-shopping between the online giant and the office supplies chain. Ultimately, the author of the article reasons, Staples is probably better off housing the Amazon Lockers rather than having them show up at Office Depot or OfficeMax.

Discussion Questions:

In what ways will Staples be helped or hurt by having Amazon Lockers in its stores? What other chains beyond Staples and 7-Eleven would make good Amazon Locker hosts?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How much will Staples' business be helped or hurt by having Amazon Lockers in its stores?

Comments:

Two fundamentals of retailing -- Location, Location, Location, and Traffic, Traffic, Traffic. The Amazon-Staples locker initiative is the perfect combination of both. Click and collect is becoming the way we'll shop for so many things. So little of what is sold on Amazon competes with Staples. This idea is dead on.

Alison Chaltas, EVP, GfK

Staples' decision is pragmatic and makes complete sense. Make no mistake- customers are already doing comparison shopping long before they walk into a store -- any store! The Amazon lockers are a great way to generate actual traffic flow into a store from proven online shoppers. Staples has an opportunity to surprise and delight these folks with new innovative products and offers that may stimulate a new sale. Best Buy may be a great candidate for this service as would any major grocery chain. Anything that can leverage existing brick and mortar infrastructure in order to maintain its relevancy and its ability to become a preferred destination would be a candidate for this service. Machiavelli's guidance, as noted by Don Corelone in the Godfather: "Keep your friends close, and your enemies closer," could have been quoted in the Staples boardroom when this decision was made.

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Adrian Weidmann, Principal, StoreStream Metrics, LLC

Let's begin with "What business is Staples in today?" If there is a clear answer to that question, then the answer to whether Amazon Lockers will help or hurt Staples will lie therein.

Until Amazon Lockers prove that they have special magic with consumers it remains an "unknown" if other retailers will be good Amazon Locker hosts or just partners in another stab in the dark trying to find light.

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Gene Hoffman, President/CEO, Corporate Strategies International

As long as Staples can lock in some exclusivity to direct competitors, I think the partnership makes sense. This allows Staples to generate a small fee from Amazon while attracting customers to visit their stores. I don't think Staples should be worried about the showrooming threat. Staples has done a great job with their Private Label line and in store services including shipping, printing and technical.

Other locations that make sense include RadioShack and major grocery chains (Ahold, Kroger, Safeway). RadioShack has enough locations and needs the store traffic. Grocery chains have space at the front of the store that they could use and generate more revenue per square foot than they do today. Brings shoppers in the store similar to in-store bank branches, Redbox and Coinstar. Showrooming is less of an issue for RadioShack and grocery chains as well.

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John Boccuzzi, Jr., Managing Partner, Boccuzzi, LLC

Really? Not sure this helps Staples. The problem is illustrated with prices off the websites today. I think ink and toner is a pretty big category for the office supply companies today. Now you have a competitor selling it cheaper, and you are helping that competitor.

Amazon - HP 60 CD947FN#140 Ink Cartridge in Retail Packaging, Combo Pack by HP - $29.24

Staples - Model CD947FN#140 - $31.99 - Final Price: $31.99

Sure you get some foot traffic but at what price? Good place for lockers -- Walgreens, CVS, dollar stores, and chains with thousands of locations.

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Robert DiPietro, GVP Product Strategy & Business Development, Affinion Group

I wonder how much Staples has thought through the execution issues involved in housing Amazon Lockers in their stores. Their store operations will be required to receive, process the receipt, and place within the lockers. They will also need to manage the removal and return of packages that aren't picked up by customers within the 3 day time for pickup. They will also need to respond to customer inquiries on existing or missing packages and deal with other problems associated with the lockers themselves.

I'm not sure what the cost is associated with the time to train and complete these daily tasks, but in the retail industry keeping inventory in stock and out of the back room has always been a challenge and adding additional responsibilities to employees who struggle to maintain ordering and replenishment, in addition to serving customers better have a huge payback!

Lastly, the idea that the increased foot traffic will add incremental sales is highly suspect. The US Post Office added general merchandise (envelopes, shipping materials, pens, etc.) to their locations years ago. However, I don't believe that this has improved their bottom line; it is my experience that the goal of most people when visiting the USPO is to get in and out as fast as possible, period.

Charles P. Walsh, President, OmniQuest Resources, Inc

Great move. In Asia, many stores (and especially C-Stores) allow for pick up of web-ordered items. The upside for the "host" retailer is traffic and incidental sales.

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Liz Crawford, VP, Strategy & Insights, Match Drive

Staples certainly will not be hurt by this. It will bring more people to their stores and while there, some people will purchase stuff. "That Was Easy!"

For those of us who live in a doorman building, receiving packages of any sort is no problem at all. But, in a single person household or one where both partners work that doesn't have a doorman, leaving a package is a problem. How convenient to know it is going to be a Staples or 7-Eleven. Easy to swing by on one's way home from work or errands to pick it up.

And knowing this, the shopper is more likely to buy from Amazon than from another retailer, who will send the package to an empty house.

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Gene Detroyer, Professor, Independent

Well the proof will be in the implementation (as I am prone to saying), but on its face, Amazon lockers in Staples stores seems like a good idea.

It allows Amazon to aggregate some deliveries, and lower costs. Even if we assume an Amazon-hired field rep will arrive to load the lockers a couple of times each day, that may be considerably less costly than paying USPS, UPS or FedEx.

Staples acts like a mall landlord in the scenario I visualize -- collecting a monthly fee for being the locker host, and maybe a tiny percentage of the gross. It also gains a certain quantity of store visits, which may bring some incremental sales.

For the Amazon shoppers, Staples stores may be more appealing places to pick up packages compared with the local C-stores. Locker delivery costs may be minimal or free, while home delivery carries a higher price.

The system will allow many Amazon deliveries to be "same day" -- that is, in the lockers in time for the evening commute.

The concept may break down if applied to perishable food deliveries or bulky, heavy items that don't fit easily into lockers. Will be interesting to see how they iron those wrinkles out.

Overall, this is a good -- not spectacular -- choice by Staples and a very innovative tweak to the Amazon.com model.

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James Tenser, Principal, VSN Strategies

Amazon is racing for the bricks, just as the bricks are racing to online. The convergence will occur with online-bricks, otherwise known as mobile.

People are slow to come to grips with the idea of everyone having a supercomputer on their hip or in their purse. Talk about big, BIG data in shopping! The first outlines are just emerging, but this Third Wave of retailing will sweep all before it. Either get on and surf, or get flushed in the backwash. ;-)

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Herb Sorensen, Ph.D., Scientific Advisor TNS Global Retail & Shopper, Adjunct Senior Fellow, Ehrenberg-Bass Institute

I'm a big fan of this. During the '90s, petroleum companies looked at the feasibility of using gas stations as depots for dry cleaning and DVD rentals. We know that the game of retail is changing, and hats off to the adventurous ones who look for new ways to retain relevance.

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Cathy Hotka, Principal, Cathy Hotka & Associates

It's a confusing partner for Amazon. 7-Eleven makes so much more sense as do grocery outlets since the convenience and traffic are already there. If I'm Amazon entering a local area, would I rather have Staples or the local Safeway? Also, why not the UPS or FedEx store? Perhaps the square footage required is prohibitive in that grocery can make more $ per foot from something else. Doubt this will move the needle for Amazon or Staples.

Jeff King, Head of Strategy, Partnerships, eBay, Magento

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