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Amazon Lockers are a two-way threat

April 3, 2014

When Amazon.com began testing lockers in retail stores, it was billed as a secure means for customers to receive orders that for whatever reason could not be left at their homes or workplaces. Now, Amazon is making it easier for these very same customers to return unwanted purchases by using its lockers, as well.

To return an item, customers go to Amazon's return center. If the product they bought is eligible for return, Amazon sends a drop-off code via email. The customer then simply enters the code on the touch-screen and follows the instructions to place the item for return in a locker.

By accounts, the locker service has worked out well for the e-commerce giant even though not all of its partners have felt the same (RadioShack and Staples removed lockers from their store). According to The Wall Street Journal, Amazon has continued to expand its service even though Google will close its similar service which is offered through BufferBox.

Discussion Questions:

What do you see as the future of Amazon lockers? Why do you think Amazon has apparently been able to make lockers work while Google was not able to do so?

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:

Will lockers become more or less important as a customer service and order delivery vehicle in the years ahead?

Comments:

Amazon Prime is a service that among other benefits, provides free shipping to its customers. The Amazon Lockers does the same thing for customers not wanting to pay the fee for Prime. So for a small amount of effort by the customer (going to the locker location) they get free shipping and or returns. Once the service is expanded it will see more users and then retailers will be begging for them as they will help increase traffic and hopefully some impulse buying. I would also think that starting in rural areas may also jump start the concept.

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Frank Riso, Principal, Frank Riso Associates, LLC

Smart move by Amazon. Secure drop boxes for customers to pick up their items and secure drop boxes for returns. The easier Amazon can make the overall shopping experience, the stronger the customer loyalty.

Amazon has been able to build loyalty through an incredibly broad selection, great prices and peerless customer service. That's what it takes to build a successful retail operation, whether it's online or brick and mortar.

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Max Goldberg, President, Max Goldberg & Associates

While the case can easily be made for the security aspect, the store impact is questionable. The ONLY reason for a retailer to hand locker space over to Amazon is the expectation that users will be in their aisles more often. My guess is that didn't happen at Staples and RadioShack.

Sure, the rent is nice, and some stores are likely to see this as a more realistic use of the space used by a local bank. But if Amazon lockers don't generate incremental foot traffic inside the store, it's kind of like setting some of the eggs outside the hen house for the fox.

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Dan Raftery, President, Raftery Resource Network Inc.

Amazon is not just about low price. It has spent years earning the trust and loyalty of consumers. For Alibaba, eBay or Google to compete in the U.S., they must be able to offer similar levels of service and experience.

The great thing about Amazon is that they view innovation as a process, not an event. They also completely understand that it is always about the consumer!

Amazon has succeeded with lockers because of where they put the lockers. The lockers of Amazon are in high traffic areas that consumers frequent.

Returns are typically harder for consumers than purchases. The ability to use the lockers for returns is a new unparalleled level of service and convenience for consumers. In short, the ability to make returns in Amazon lockers is another meaningful differentiator over the thousands of other online retailers.

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Chris Petersen, PhD, President, Integrated Marketing Solutions

Amazon has succeeded with lockers because, unlike Google, Amazon is known for selling products, not facilitating search. Google is working hard to change perceptions and to retail-ize its brand, but Amazon still has the edge.

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Carol Spieckerman, President, newmarketbuilders

It makes eminent sense to use AmazonLocker for product returns as well as deliveries.

The concept's long-term success will depend on providing a sufficient number of convenient locations. This is a medium-term balancing act for Amazon - without sufficient user traffic, the lockers won't pay off.

I'll take a wild guess and speculate that Google discovered its locker payback would be trivial, compared with other initiatives. For Amazon, however, it may be a pillar of its overall service vision.

AmazonLocker's value to host retailers presents another question. The earned rent may not be enough benefit if it merely creates non-productive in-out traffic to the stores. Concerns have been raised that locker deliveries may even cannibalize some store sales in some instances.

For shoppers, locker access is limited to store operating hours. That may be one advantage of c-store locations over office supply stores.

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James Tenser, Principal, VSN Strategies

Enabling two way functionality for Amazon lockers is a great concept for Amazon. For the retailers there is minimal increased value, unless the delivery aspect is generating additional purchasing traffic. As noted in the article, several retailers tried the concept and found it didn't work as well as alternative uses for the space.

7-Eleven's new concept store in New York incorporated Amazon lockers. The rationale may be that they are trying to attract more Millennials.

The difference between Amazon and Google is you don't hear people talking about buying on Google. Google may be where they look to find items, but Amazon is where they are buying.

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Steve Montgomery, President, b2b Solutions, LLC

Interesting concept that if it is made simple to use, should be a pretty good customer service add-on. Where it is located in the store, and what merchandise or services are adjacent, probably would affect its effectiveness.

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Jerry Gelsomino, Principal, FutureBest

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