Amazon, which continues to send shivers up the support beams and load-bearing walls of brick-and-mortar retailers with its drive to deliver ever-more quickly to consumers’ doors, is borrowing yet another strategy from the traditional retailers’ handbook.
The online giant in 2017 hooked-up with Kohl’s to sell gadgets as a test, and Kohl’s earlier this year agreed to accept Amazon returns at all its stores, with the web giant receiving warrants to buy up to 1.1 percent of Kohl’s shares.
Retailers such as Walmart Inc. are challenging Amazon’s delivery prowess and free next-day shipping proposition for Prime members. Walmart last month launched its own free next-day delivery options, pointedly noting that Amazon’s Prime offer carries a $119 annual membership fee.
Now Amazon is fighting back.
The Seattle-based e-commerce giant on Thursday revealed the launch of Counter, a network of staffed pickup points in stores where consumers can collect their packages. Counter initially is available at more than 100 Rite-Aid stores across the country. Amazon expects to roll out the service to more than 1,500 stores in the U.S. by the end of the year, and is actively looking to bring additional partners onboard, including small to midsize businesses and other large chains.
Amazon said tens of millions of products sold on its site are eligible for delivery to a counter location for pickup. The new service can be used for items that are delivered same-day, two-day and standard shipping at no extra cost.
Amazon said it designed and built Counter from the ground up, and originally launched the service in the U.K. at women’s apparel retailer Next, and in Italy with Giunti Al Punto Librerie, Fermopoint and SisalPay stores.
The number of products that can be ordered for next-day delivery from Walmart.com pales in comparison to Amazon.com, mainly because Amazon carries more products from third-party vendors than Walmart does currently. Marc Lore, president and chief executive officer of Walmart U.S. e-commerce, admitted during a Q&A with Wall Street analysts that the retail giant can’t offer nearly as many products, but said that Walmart is making progress.
On the other hand, Walmart operates more than 5,000 stores in the U.S., and it’s unlikely that Amazon could ever open as many locations — the digital behemoth in 2016 acquired the 465-unit Whole Foods Markets for $13.7 billion — unless it bought a dollar store chain.
That same year, Walmart spent $3.3 billion to buy Jet.com, which was founded by Lore.
The two acquisitions by the mega-retailers have been compared and contrasted. Whole Foods isn’t seen as being immediately synergistic with Amazon, according to some experts, who doubt the food retailer will inspire shoppers to become Prime members. So far, there’s un-manned pick-up lockers at some Whole Foods stores and special discounts for Prime members.
When Walmart acquired Jet, part of the deal was giving Lore a role at walmart.com. While Jet continues to be run autonomously in Hoboken, N.J., it’s raison d’être has shifted over the years. Earlier this month, Lore said some of Jet’s teams would be integrated into Walmart U.S. e-commerce and that the smaller site will target urban shoppers rather than consumers nationwide.
Lore envisioned Store No. 8, the retail giant’s start-up incubator tasked with dreaming big and developing capabilities that will solve problems plaguing retail consumers in the future. Its portfolio companies include member-only shopping over text message service Jetblack, which recently finished its beta test phase and has launched in Manhattan.
Intelligent Retail Lab, located at Walmart’s Neighborhood Market in Levittown, N.Y., is the only retail Artificial Intelligence lab operating in a real-life setting, with AI-powered services and experiences. These and other technology-driven strategies have the imprint of Lore, who’s seen as a key force in moving the lumbering Arkansas-based brick-and-mortar giant into the digital age.