Amazon and 7-Eleven in Drop-Off Location Test

Discussion
Sep 15, 2011
Bernice Hurst

Amazon customers are being offered a new way to receive their purchases. Instead of waiting at home, standing in line at a depot or getting to the post office during relatively short opening hours, they can head for a nearby store (or mall in the U.K.) with longer opening hours and simply open a locker.

Amazon will e-mail a barcode to exchange for a PIN to unlock said locker, releasing the package. Locations are intended to be more convenient for customers to reach at their convenience, perhaps during a coffee or lunch break, on their way to or from home or even after a night out. American trials were expected to start at 7-Eleven stores in Seattle with potential roll-out in summer 2012 if all goes well, according to The Inquirer. Different sizes will be available, with keypads and monitors similar to those in cashpoints.

At more or less the same time, lockers will be installed in several London shopping centers, reported Retail Week. Unfortunately for stores hoping to lure passing Amazon customers into their own premises, “the lockers are located in secondary space in the shopping centres — at One New Change, for example, are in a corridor leading to the public toilets,” according to Retail Week.

Both Amazon and 7-Eleven have declined comment. Meanwhile, sarcasm and skepticism abound, with Engadget’s Amar Toor describing the units as seven-foot tall “box-style cabinets … completely devoid of Amazon branding.”

Anonymous wrote on the U.K.’s Retail Week site, “The key benefit to internet shopping is not having to go anywhere to get the stuff, otherwise it’s just like going to the shops! People easily get items delivered to work anyway so why there is a demand for this I have no idea.”  Another comment on the same site suggested having the pickups at train stations or office complexes.

Consumer Reports noted the potential convenience for customers, but pointed out, “This may be another blow to the struggling U.S. Postal service.” The Inquirer declared it “so 1999 … and we are happier to have our goods handed to us than have to go out and track them down.”

Discussion Questions: What do you think of Amazon’s move to test drop-off delivery at 7-Eleven locations? What benefits do you see for Amazon and the convenience store chain?

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14 Comments on "Amazon and 7-Eleven in Drop-Off Location Test"


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Doron Levy
Guest
Doron Levy
9 years 8 months ago

Great idea but I would insist on better placement. The heavenly hallway to the toilets is not the best place to have these lockers. As for 7-Eleven, everything in the store is basically high margin, quick service food or impulse so putting them near the back and forcing the customer to walk the entire length of the store is the ultimate strategy for these Amalockers. Quick question for the store that has the lockers next to the outhouses: Will there be a concierge standing next to it handing out sanitizer or refreshing towelettes?

Ed Rosenbaum
Guest
9 years 8 months ago

Count me in the skeptics column when it comes to going to a 7-Eleven to pick up an order. I can’t picture in my wildest imagination where these pick up places would be in the store. Maybe behind the coffee counter? Or possibly next to the hot dogs?

Let’s get realistic when it comes to selecting a partner for this program.

Richard J. George, Ph.D.
Guest
9 years 8 months ago

Long overdue. The final mile issue has concerned customers and companies since the advent of online shopping. This is simply another channel of distribution. Online retailers should be exploring shipments to any places that their customers regularly visit, e.g., schools when children are picked up, gyms, etc. Make it easy for customers.

For 7-Eleven, a real win in terms of traffic generation.

Ryan Mathews
Guest
9 years 8 months ago

I thought Amazon had already been doing this (with 7-Eleven) in Japan for years.

The theoretical advantage to 7-Eleven is obvious — trading floor space for a potentially significant increase in foot traffic.

As for Amazon, it’s easier to understand the potential benefit in dense urban areas like Manhattan where congested streets and (in some neighborhoods) the lack of a secure postal or drop box for customers makes delivery and customer service more challenging than it is in suburban or rural areas.

But the question is, “What percentage of U.S. shoppers would prefer going to, say, a 7-Eleven to pick up their Amazon deliveries as opposed to finding them waiting for them at home?”

I think the jury is decidedly still out on that one.

Steve Montgomery
Guest
9 years 8 months ago

Not as sure about the mall as a place to pick up something — especially if I could have just gone to the mail and purchased anyway. Am sure the reason the decision was made to use the space on the way to the restrooms was because they have been unable to find any other commercial use.

However, 7-Elevens are found in most communities, far more numerous than malls, and found along all consumers commutes to and from work. In other words they are convenient. True, the goods could have been delivered to the door by the Post Office, UPS, or FedEx but leaving something on the doorstep doesn’t provide the security of having it delivered to a locker. Bottom line — a good idea and certainly worthy of being tested.

Carlos Arambula
Guest
9 years 8 months ago

It’s an interesting concept. I don’t believe consumers will equate picking up an order from a c-store as going to the mall, so the internet shopping experience will remain — although evolved.

If the experience completely avoids the store clerk, I can see the concept appeal. But if the store clerk needs to be involved, then it can be a logistical and customer service nightmare.

For 7-Eleven it’s an opportunity to offer additional services, or automated services, beyond the quick drink, snack, and safe ATM location. The benefit for Amazon is that it keeps them in the cutting edge of online commerce — who else is trying new approaches?

Bill Emerson
Guest
Bill Emerson
9 years 8 months ago

This is puzzling. Amazon is introducing another layer of complexity in managing its inventory (never a good idea) not to mention losing leverage on a major piece of working capital. The benefit? Being able to go to a mall? I thought Amazon was supposed to be an alternative to that.

I don’t get it.

Max Goldberg
Guest
9 years 8 months ago

It’s interesting how a number of “experts” in the article took shots at this plan. For relatively little expense, Amazon has made it easier for its customers to get their shipments. What’s wrong with that?

Kimberly Nasief-Westergren
Guest
Kimberly Nasief-Westergren
9 years 8 months ago

This seems like it is adding complexity. If I understand this correctly, Amazon has to mail the package to the locker. Email the barcode to the customer. Customer has to get in car to go to the 7-Eleven, and get the package. If Amazon has to mail the package anyway, why not mail it to the buyer’s home or place of business. To me, it seems like more room for error. Certainly a win for 7-Eleven, though.

Charles P. Walsh
Guest
Charles P. Walsh
9 years 8 months ago

Presumably Amazon has conducted an ROI analysis on the project before embarking on a test.

They certainly have mountains of demographic and product specific data that enabled them to identify the “size of the prize.”

The size of the prize in this case must be fairly large and as such would be valued at more than “niche” status.

Where and how consumers shop and their purchasing dollars (the pie) is being split into ever smaller slices. It is going to be increasingly important for retailers of all types to identify and exploit these changes. Alternative shopping (e-tailing), the rise of smaller store formats and an increasingly segmented market (loss of middle class) has resulted in the steady pressure on many retail businesses (such as Walmart).

These seemingly small or niche concepts (Amazon drop off delivery, Groupon, et al) are seemingly small and inconsequential, but they are horizontal indicators of change that the dominating retail chains have to come to grips with.

Herb Sorensen
Guest
9 years 8 months ago
Retail works because the people who want and need stuff are not the same people who produce the stuff. If you build a box, and put the stuff people want in it, they will come and get it. These simple facts have driven the explosive growth and prosperity of self-service retail for 100 years. However, the fact is that self-service retailers are largely logistics organizations, with Walmart being the preeminent example, and are not very good at, you know, actually SELLING anything. Order taking for 100 years has served them VERY well, and hamstrung their brains! But now, Amazon has become the preeminent SELLING organization in the world. In the present example, they propose to use other retailers’ large boxes to put their own small boxes inside of, to handle the final logistics of the sale. Never mind the branding of the boxes, etc. That can come later. But this represents a significant advance in the Convergence of Online, Mobile and Bricks (COMB) retailing. Amazon is moving further to become physically close to the shopper… Read more »
Lee Peterson
Guest
9 years 8 months ago

Super interesting test … what’s next? No mall, just boxes — oh yeah, that’s what it was like in the ’50s. This is one of those things where I just can’t tell whether it’s a really, really good idea or a really, really bad idea. Guess we’ll find out soon enough.

Mike Spindler
Guest
Mike Spindler
9 years 8 months ago

Love this idea. First advanced by my first retail client at MyWebGrocer in 2000. I would say the second of three shoes is descending toward the floor!

This has some pretty good strategic implications. I don’t think they have thought it through all the way yet (evidence 7-Eleven), but Amazon is certainly getting closer.

Kai Clarke
Guest
9 years 8 months ago

This offers little convenience and adds a tremendous burden to the customer…They have to pay sales tax since the transaction would occur in the state they live in, rather than online! This is a tremendous benefit to shopping online, and one Amazon is clearly not thinking about….

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