Amazon has had no shortage of disruptive ideas when it comes to the retail industry, and its latest, Instant Pickup, has the potential to affect local retailers like drugstores and corner stores. The idea behind instant pickup is pretty simple—customers can purchase items online, then go pick them up at local storage lockers within minutes. The company plans to test-market this service on five college campuses this year, and if things go well it will be rolled out in larger areas.
This might not seem revolutionary on a surface level, and when compared to the main benefits of a Prime membership it really isn’t, but Amazon has the capital and the network to get people to at least try the service right away, and if they can prove that this experience is worthwhile to consumers it will likely catch on.
Consumer Benefits
The benefit to the consumer is mainly in the speed at which they receive their products. Orders from Amazon Prime normally take two days to arrive. Consumers are fine with waiting that long for larger products like electronics, clothing, etc., but when it comes to snacks and toiletries they’d rather receive them as soon as possible. That’s why the convenience store market has traditionally been a bit more difficult for Amazon to penetrate—If you run out of toothpaste, you’re not going to want to wait two days for Amazon to deliver more. Instant pickup solves this issue but allowing for pickup within minutes. It all comes down to convincing consumers to play ball.
More Logistics Than Retail Industry Focused
Sure, there are benefits to consumers, but the real benefit of Instant Pickup might be to Amazon itself. Shipping is costly, even for massive companies like Amazon. Devoting capacity to delivering a single, small item to a house is inefficient. Instant pickup allows a carrier to drop off multiple people’s orders to a single location instead of having to deliver them to each person’s home individually. This saves both time and money for Amazon. It’s another example of the changes retail in incurring due to digitization.
One might wonder what will attract consumers to Instant Pickup. Convenience and grocery stores already offer a fairly instant way to pick up most of these items. The answer is simple: price. If Amazon can offer these items at prices that beat local stores, they’ll start attracting more and more consumers to the service.
It remains to be seen whether or not this will be another success story for Amazon, but rest assured that Instant Pickup is now on the radars of companies like Walgreen’s and CVS, as well as other eCommerce players.