Tuesday, July 7, 2015

What Amazon.com could teach the Postal Service

As post offices shut down, Amazon.com is opening in 7/11 stores and at colleges

What Amazon.com could teach the Postal Service

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Travel Deals

Not content with its national network of sweatshop warehouses, fast-growing online retail giant Amazon.com is moving its distribution out to where the people are. It's installing delivery lockers at 7-Eleven convenience stores  and experimenting with others at colleges and other public locations. Amazon.com 7-Eleven via GeekWire here (GeekWire also says it's found Amazon boxes at Bellevue College in Washington State) and TheDaily here. 

There's a lesson here for the US Postal Service, which is cutting back as Amazon expands. But first (we ask) why this innovation at downmarket 7-Eleven? 

To draw more customers, of course, as with 7-Elevens previous deal to install Citibank ATMs. "I would imagine that 7-11 is going to watch (profitability) closely on the lockers – does the locker square footage generate enough fees from Amazon, or are they better off doing something else with that space?" asks Fiona Dias, chief strategy officer at the ShopRunner online retail service in King of Prussia.

(This isn't mobile commerce, more like mail-order, Dias notes.  "Mobile commerce is all about now. For example, in the travel space, 50% of mobile bookings is for travel the same day." Versus traditional travel planning agencies for your trip next summer. 

("Retailers that have inventory in their stores are much better set up for mobile commerce. For example, when I was running Circuitcity.com (at GSI Commerce), 50% of orders that were bought online for store pickup, were picked up by customers the same day. With mobile commerce, I believe we will see even more of that: customers ordering on their mobile apps, and picking up the same day. Lowes is probably the best retailer for that. They are able to have orders ready to be picked up in a store a mere 20 minutes after being placed online.")

Back to our question: How is Amazon.com able to expand delivery while the US Postal Service is cutting back? "If the Postal Service had any vision, they would have done what 7-Eleven is doing years ago," says Dias. "Buy online at any ecommerce site, and have your packages delivered to your local post office. USPS has 32,000 locations, more than anybody. Instead of finding ways to use that terrific Main-on-Main real estate, they’re trying to shut down post offices." 

Lessons here for Wawa, too: "As you can order your sandwiches off kiosks in Wawa stores, it’s a small jump to provide a sandwich-ordering mobile app. That way you could order your favorite sandwich, and have it waiting for you when you arrive. Rather than you having to wait for the sandwich."

Dias's company has a deal like that (includes free delivery) with Domino's Pizza: "Domino’s has become a huge online retailer, as people now place their orders on their mobile app. The innovative part of the app is they have a pizza making tracker – you can track the status of your pizza: being made, in the oven, on the way to you. Great for people who would otherwise call to see where their pizza is." They track your actual pizza, really? 

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About this blog

PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, distefano251@gmail.com, 215.854.5194 or 302.652.2004.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

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