September 19, 2013
Staples, RadioShack End Tests on Amazon’s Lockers
The idea behind the Amazon.com locker test was pretty simple. Amazon would win by giving their customers an easy way to pick up orders they didn’t want left at their doors. Staples and RadioShack would benefit by receiving a fee for the lockers and seeing more boots come through their door, hopefully, leading to more purchases. Now that the two chains have pulled out of the test, it seems clear that the benefits, whatever they may have been, seem more weighted to Amazon’s side.
Demos Parneros, president of North American stores and online for Staples, told Bloomberg News that his company chose to end the test because it failed to meet the goals set up for the program. RadioShack made the change because it didn’t fit with the chain’s new, cleaner merchandising philosophy under CEO Joe Magnacca.
When RetailWire first covered the Amazon/Staples test last year, most were willing to give the idea the benefit of the doubt even as they acknowledged that the companies involved directly competed with one another. Sixty-three percent said they thought Staples’ business would be helped somewhat by placing Amazon’s lockers in its stores. Clearly, based on Staples’ decision, it did not help enough.
Amazon did not offer a comment on the news.
BrainTrust
Recent Discussions
Discussion Questions
Do you see a the future in Amazon’s Locker program now that Staples and RadioShack have chosen not to participate? Do you, for example, see Amazon opening its own locker storefronts in densely populated areas to serve the need?
Poll
Shocking, simply shocking. Amazon’s program was weighted in Amazon’s favor. Who knew?
Spoiler alert: Everything Amazon does is weighted in Amazon’s favor. Get over it or don’t play. I recommend the latter.
The Amazon locker program may not have achieved the goals of Staples and RadioShack, but that does not mean that the program is a failure. It worked for Amazon. Amazon needs to find better retail or non-retail partners.
Staples and RadioShack took calculated risks by letting Amazon into their stores. They hoped that program would increase footfall and drive incremental sales, more sales than Amazon, a competitor, would take away.
Amazon will find new ways to offer fast, secure delivery to its customers. Along the way there will be some missteps, but in the end, it will find a way.
I don’t think too many retailers are going to jump at the chance to use their store square footage for Amazon, particularly since the tests failed at 2 major retailers. I think it is a benefit for Amazon to facilitate local pickup, but the company may need to open its own storefronts in order to accommodate the demand, unless they can make it more palatable for retailers.
Amazon continues to test alternative delivery methods. While these tests apparently did not meet the goals of the two bricks and mortar retailers, I do not believe this signals the end of a locker program with an established retailer. Perhaps convenience stores and gasoline retailers would be a better fit going forward, or perhaps education sites, like elementary or middle schools, would provide symbiotic benefits.
I am confident that Amazon is investigating opening its own locker storefronts. This is something I expect the company will definitely test in the not too distant future.
Truly one of the “duh-oh” moments in retail. Desperation makes strange bedfellows.
Amazon delivery lockers are an excellent stand-alone solution for high-density urban areas that do not have a Walmart, UPS Store, or FedEx store nearby.
Independents in these major cities can probably do a better job managing as well as helping make better inroads than Walmart and Target into the growing urban market.
If I were Amazon, I would not give up on the delivery lockers and consider the approach I suggested.
Amazon always seems to find a path forward. The path of least resistance would be opening its own locker storefront.
Something that I would find very interesting is trying to provide locker space where impulse buys are more likely (although smaller transaction size) – say, a grocery store.
As they say, predicting the future is hard – particularly the part about saying what will happen. But the Amazon online partnership affiliate program for bricks retailers seems to be thriving, meaning that many affiliates are gaining enough advantage from Amazon – even though Amazon directly competes with them, too – that they persevere.
I see the locker program as simply an extension of this program, with the affiliate serving as a delivery point for Amazon’s own sales, just as Amazon is a sales agent for the affiliates delivery infrastructure.
I’ve read enough commentary by dissatisfied affiliates to understand how fraught the wedding of the online (Amazon) and bricks (affiliate) can be, but this is not an “Apple” type situation where Amazon can logically open its own bricks stores – not that they can’t, but I think it makes very limited sense to move in that direction.
Just think about this: What if Walmart allowed Amazon to take over managing Walmart’s own online business? Are there antitrust implications for major businesses trading services on a contractual basis?
I’m pushing this idea because Amazon has also partnered with C-stores as locker locations – C-stores presumably having no online presence, anyway. Okay, if SOME bricks retailers find it acceptable to let Amazon sell their bricks merchandise, why won’t some find it useful to trade BOTH selling AND delivery with Amazon. Staples and RadioShack may simply be the wrong partners. The Amazon locker program is probably far from dead. I don’t think Bezos is that short sighted.
I wonder how this program is doing in the C-stores that have cooperated, here and abroad. Learning is learning. Makes for smarter retail. Shouldn’t everyone be doing these types of things?
My guess is that this will work in some cases and not in others. With these retail outlets, it didn’t work. But don’t count Amazon out yet on this concept.
Why doesn’t Amazon work with the Post Office? Soon to be lots of room around them, and goodness knows they can use the money.
Partnerships with mailboxes etc, postnets etc., would be more of a win win than with brick and mortar retailers. Some day the locker will be right outside my door I bet. They could be called “transporters”….
This is another experiment in Amazon’s development strategy – try it and learn, then move ahead. Finding the right partner is always a challenge, finding national partners is very tricky. Amazon will locate the urban sweetspots and develop them, likely as they are doing with AmazonFresh.
No question this was a smart test for Amazon and it likely also validated for Staples and RadioShack who their most menacing competitor is. Amazon will likely find alternative partners if it hasn’t already. Lesson learned for retailers that don’t have Amazon Locker’s: if your goods are for sale at Amazon, this might not be a good idea. If your goods aren’t for sale at Amazon, they likely will be; but in the interim they might be looking for partners!
Great idea, bad execution. It would make far more sense to choose locations where people need to go anyway, such as convenience stores or grocery stores. I buy groceries every week. I can’t remember the last time I was in either RS or Staples.
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Shocking, simply shocking. Amazon’s program was weighted in Amazon’s favor. Who knew?
Spoiler alert: Everything Amazon does is weighted in Amazon’s favor. Get over it or don’t play. I recommend the latter.
The Amazon locker program may not have achieved the goals of Staples and RadioShack, but that does not mean that the program is a failure. It worked for Amazon. Amazon needs to find better retail or non-retail partners.
Staples and RadioShack took calculated risks by letting Amazon into their stores. They hoped that program would increase footfall and drive incremental sales, more sales than Amazon, a competitor, would take away.
Amazon will find new ways to offer fast, secure delivery to its customers. Along the way there will be some missteps, but in the end, it will find a way.
I don’t think too many retailers are going to jump at the chance to use their store square footage for Amazon, particularly since the tests failed at 2 major retailers. I think it is a benefit for Amazon to facilitate local pickup, but the company may need to open its own storefronts in order to accommodate the demand, unless they can make it more palatable for retailers.
Amazon continues to test alternative delivery methods. While these tests apparently did not meet the goals of the two bricks and mortar retailers, I do not believe this signals the end of a locker program with an established retailer. Perhaps convenience stores and gasoline retailers would be a better fit going forward, or perhaps education sites, like elementary or middle schools, would provide symbiotic benefits.
I am confident that Amazon is investigating opening its own locker storefronts. This is something I expect the company will definitely test in the not too distant future.
Truly one of the “duh-oh” moments in retail. Desperation makes strange bedfellows.
Amazon delivery lockers are an excellent stand-alone solution for high-density urban areas that do not have a Walmart, UPS Store, or FedEx store nearby.
Independents in these major cities can probably do a better job managing as well as helping make better inroads than Walmart and Target into the growing urban market.
If I were Amazon, I would not give up on the delivery lockers and consider the approach I suggested.
Amazon always seems to find a path forward. The path of least resistance would be opening its own locker storefront.
Something that I would find very interesting is trying to provide locker space where impulse buys are more likely (although smaller transaction size) – say, a grocery store.
As they say, predicting the future is hard – particularly the part about saying what will happen. But the Amazon online partnership affiliate program for bricks retailers seems to be thriving, meaning that many affiliates are gaining enough advantage from Amazon – even though Amazon directly competes with them, too – that they persevere.
I see the locker program as simply an extension of this program, with the affiliate serving as a delivery point for Amazon’s own sales, just as Amazon is a sales agent for the affiliates delivery infrastructure.
I’ve read enough commentary by dissatisfied affiliates to understand how fraught the wedding of the online (Amazon) and bricks (affiliate) can be, but this is not an “Apple” type situation where Amazon can logically open its own bricks stores – not that they can’t, but I think it makes very limited sense to move in that direction.
Just think about this: What if Walmart allowed Amazon to take over managing Walmart’s own online business? Are there antitrust implications for major businesses trading services on a contractual basis?
I’m pushing this idea because Amazon has also partnered with C-stores as locker locations – C-stores presumably having no online presence, anyway. Okay, if SOME bricks retailers find it acceptable to let Amazon sell their bricks merchandise, why won’t some find it useful to trade BOTH selling AND delivery with Amazon. Staples and RadioShack may simply be the wrong partners. The Amazon locker program is probably far from dead. I don’t think Bezos is that short sighted.
I wonder how this program is doing in the C-stores that have cooperated, here and abroad. Learning is learning. Makes for smarter retail. Shouldn’t everyone be doing these types of things?
My guess is that this will work in some cases and not in others. With these retail outlets, it didn’t work. But don’t count Amazon out yet on this concept.
Why doesn’t Amazon work with the Post Office? Soon to be lots of room around them, and goodness knows they can use the money.
Partnerships with mailboxes etc, postnets etc., would be more of a win win than with brick and mortar retailers. Some day the locker will be right outside my door I bet. They could be called “transporters”….
This is another experiment in Amazon’s development strategy – try it and learn, then move ahead. Finding the right partner is always a challenge, finding national partners is very tricky. Amazon will locate the urban sweetspots and develop them, likely as they are doing with AmazonFresh.
No question this was a smart test for Amazon and it likely also validated for Staples and RadioShack who their most menacing competitor is. Amazon will likely find alternative partners if it hasn’t already. Lesson learned for retailers that don’t have Amazon Locker’s: if your goods are for sale at Amazon, this might not be a good idea. If your goods aren’t for sale at Amazon, they likely will be; but in the interim they might be looking for partners!
Great idea, bad execution. It would make far more sense to choose locations where people need to go anyway, such as convenience stores or grocery stores. I buy groceries every week. I can’t remember the last time I was in either RS or Staples.