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Amazon Adds ‘Instant Pickup’ Points To Brick-And-Mortars

At designated locations on five college campuses, shoppers can retrieve 'fast-selling' items in minutes. Here's what that means for retailers.

Amazon is rolling out instant pickup points on five college campuses where shoppers can collect their items immediately after ordering, Reuters reported Tuesday — a move aimed at shortening delivery wait times as well as expanding the company’s brick-and-mortar ambitions following the launch of pop-up stores and its major acquisition of grocery emporium Whole Foods.

Here’s how it works: Shoppers on the Amazon mobile app can select from several hundred pre-available items at each “kiosk” location. Then, Amazon employees in a back room load the ordered items into lockers within two minutes, and customers receive bar codes on their mobile devices in order to access them.

The initial limited rollout reportedly sees Amazon making a physical push for fast-selling items that shoppers might not ordinarily order online — like drinks or snacks — as well as a few more substantial products, like phone chargers. So, is Amazon aiming to compete with vending machines?

The Retailer Response

While the rollout might at first appear to simply put Amazon in competition with Coke machines, the long view of the impact is quite different. This isn’t about soft drinks: As Forrester analyst Ananda Chakravarty put it, “this might work for some electronic gadgets that are not commonly available at vending machines, [but] two minutes is too long to wait for a soda can.”

Instead, this indicates that Amazon has the drive — and likely, the means — to begin putting instant pickup into practice for a much wider range of products. Might real-time pickup of shoes or books be next, further threatening brick-and-mortars?

Perhaps. But the silver lining for physical retailers is that their stores already function as instant pickup points; it’s simply about integrating the technology aspect so that customers can find or purchase their products on demand.

As we wrote earlier this year, brick-and-mortar businesses are actually the backbone of delivery enterprises like Postmates, which uses the city and the city’s retailers essentially as its warehouses. These types of partnerships could be one of the keys to competing with the likes of Amazon: The physical store locations act as stockrooms, and companies like Postmates provide the immediate or near-immediate local delivery — acting as a competitor to Amazon Prime.

“In a sense, yes, what we’re allowing these retailers to do is to emulate what Amazon is doing with Prime Now,” said Holger Luedorf, former SVP of business at Postmates. “They can do the same thing because they have a great variety of goods, and the only thing they are missing is the logistics piece. And that can be solved [through] partnerships.”

Additionally, retailers like Kohl’s have seen success through embracing buy online, pick-up in-store programs to address the “instant” aspect. After all, brick-and-mortars don’t need take their time rolling out instant pickup “kiosks”; they have the stores.

For its part, Target has taken a direct step to tackle one of the primary holes in its omnichannel strategy by acquiring transportation tech company Grand Junction to promise same-day delivery to customers — a clear step to address Amazon’s moves as retail undergoes a rapid transformation.

Amazon’s next steps are unknown. But the brick-and-mortar future will almost certainly continue to rely on on-demand partnerships — both with Amazon and with other competitors — and “instant pickup” is an option that existing retailers need to embrace now.