SEATTLE -- Less than 24 hours after Target agreed to purchase a delivery logistics company to expedite its delivery process, Amazon rolled out brick-and-mortar units where customers can pick up online orders in minutes.
These recent moves from two of America’s biggest retailers highlight the blurring of the lines between physical and online retail. As brick-and-mortar stores explore ways to get their products to customers faster, e-retailers—most notably Amazon—are building physical, customer-facing locations.
Click through for more information on the latest sector-expanding moves from Amazon and Target, and what this might mean for convenience stores and other retailers …
Amazon’s latest convenience store
While the smart c-store Amazon Go is still being primed for public use, the Seattle-based online retailer has released what seems to be another convenience-store concept, Amazon Instant Pickup.
Mashable reporter Karissa Bell said Amazon’s new service “provides what’s essentially the experience of a convenience store, but without the lines or human interaction.”
There are five Instant Pickup locations: Berkeley, Calif.; College Park, Md.; Columbus, Ohio; Los Angeles; and Boston. Amazon is launching the concept at college campuses, but it will eventually come to other areas this year, starting with Chicago’s Lincoln Park neighborhood, according to Mashable.
How it works
Amazon Prime and Prime Student subscribers can choose from a daily-curated list of basic items available for pickup two minutes or less after they place the order.
These items can include snacks, drinks, personal-care items and electronics, as well as Amazon-branded devices such as the Echo smart speaker.
Once the customer places an order, they are given a QR code on their smartphone that they scan at the Instant Pickup location. Once they scan the code, their locker opens with their order inside.
Targeting same-day delivery
Target, meanwhile, has agreed to acquire San Francisco-based Grand Junction, a transportation technology company, to improve the retailer’s delivery process.
Grand Junction’s first order of business with Minneapolis-based Target is to help launch its same-day-delivery pilot program at Target’s New York Tribeca location.
Once the acquisition is final, Grand Junction employees will become Target employees. The logistics company’s founder and CEO, Rob Howard, will become a vice president of technology for Target.
Wal-Mart used a similar strategy when it bought e-retailer Jet and named its CEO and co-founder Marc Lore CEO of Wal-Mart’s e-commerce arm in the United States.
If Amazon Instant Pickup units open nationwide, they have the potential to compete directly with convenience stores. At the moment, c-stores offer plenty of goods and services that Amazon’s new locations do not, including fuel, alcohol, cigarettes and ATMs, just to name a few; however, Amazon’s new stores target customers looking for a quick snack or personal item, the kind of on-the-spot purchase consumers would normally visit a c-store or drug store to fulfill.
Amazon’s grab-and-go c-stores also offer further evidence that younger shoppers prefer not to interact with other people as part of their shopping experience. “The original concept had a desk instead of these lockers, and the feedback [the students] gave us was, ‘I don’t want to talk to people, I want to do it on my phone,’ ” Amazon Director of Student Programs Ripley MacDonald told Mashable.
Meanwhile, Target’s exploration into same-day delivery is a clear counterpoint to Amazon and other direct-to-consumer concepts cutting into the retailer’s bottom line.
These actions make up just one example of the merging of online and brick-and-mortar retail. Both business models seem to be aiming for that sweet spot where consumers have the most convenient combination of physical and online shopping.