Amazon tests same-day delivery from malls

Discussion
Photo: Getty Images/adamkas
May 23, 2022

Amazon.com is testing a new program that leverages its Flex gig economy driver network to bring deliveries to consumers’ doorsteps from malls.

Amazon is testing the program with participating retailers at a few malls in Las Vegas, Virginia and Texas, according to CNBC and Bloomberg.

Consumers who want same-day or faster shipping are shown locally available products. Once the item is ordered from the retailer through Amazon, one of its drivers deliver it.

An Amazon spokesperson told CNBC a handful of “existing Amazon sellers” are participating in the program. Flex drivers operate as normal, but retrieve orders from mall-based stores rather than Amazon delivery stations or supermarkets.

“We have been delivering from third-party stores for years,” the spokesperson said in a statement. “This is another way we are able to connect Amazon sellers with customers via convenient delivery options.”

Bloomberg said, “The program, should it become a permanent part of the e-commerce giant’s delivery options, could help Amazon expand the variety of goods it has available for fast shipment.”

Amazon launched its Flex gig delivery service for its own orders in 2015 and Delivery Service Partner, which uses contractors driving Amazon Prime vans, in 2019. In early 2021, Amazon confirmed that the majority of orders from its platform were delivered internally.

Amazon stocks its own urban warehouses with merchandise from select third-party retailers to support fast delivery. In April, it launched Buy With Prime, which enables third-party retailers to tap Amazon’s shipping and fulfillment network for orders placed on their own site.

Amazon’s push into same-day mall delivery could pressure the leading on-demand delivery providers like DoorDash, Uber’s Postmates and Instacart. Instacart has added a wide range of non-grocery retailers, including Sephora, Best Buy, Staples, Walgreens and Dick’s Sporting Goods, over the last two years. DoorDash, with roots in fast-food delivery, has partnered with Macy’s and JC Penney.

Among bigger competitors, Target acquired Shipt in 2018 and Walmart last August launched GoLocal, an in-house delivery service with Home Depot, Chico’s FAS and Kelly-Moore Paint among its outside clients.

In May 2020, Deliv, which had offered a same-day service to mall shoppers, shut down with Target acquiring Deliv’s technology assets.

DISCUSSION QUESTIONS: What do you think is behind Amazon’s test of same-day delivery from malls? Will third-party retail locations likely play a large role in Amazon’s same-day delivery ambitions?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"One more way for customers to receive product on their terms. Amazon is certainly positioned to stand this up faster than anyone else in the market."
"This is one key way we can see retailers circumvent the supply chain crisis and delivery delays."
"This is more Amazon following and reacting to the market than leading."

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17 Comments on "Amazon tests same-day delivery from malls"


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Melissa Minkow
BrainTrust

This is one key way we can see retailers circumvent the supply chain crisis and delivery delays. Looking into alternative storage methods beyond the traditional warehouse is crucial, and leveraging locations that are closer to the consumer can make for a more sustainable fulfillment model.

David Naumann
BrainTrust

Great points Melissa. Leveraging stores as distribution centers has been very successful for Walmart and Target and it is a smart strategy for all retailers that have a broad network of stores. Adding same-day delivery from malls is just another service that fits with Amazon’s strategy to own as much of the retail supply chain as possible.

Rich Kizer
BrainTrust

Our world is shrinking quickly. We have educated customers that they can get anything in an immediate fashion. With that in mind I would expect Amazon, who knows their strengths, to do this as well as all the other delivery services that are filling our markets and customers’ minds.

Bob Amster
BrainTrust

Amazon or any other shipper that wants to ship same- (or any other-) day from mall stores requires two basic ingredients: 1.) very accurate inventory data, in real time from participating retailers, and 2.) those retailers’ ability to “commit” inventory to those shipments so that the same unit is not sold twice. Many retailers. unfortunately, have not reached that degree of sophistication. This model – whether by Amazon or another seller – will be limited until that happens.

Shep Hyken
BrainTrust

This is simply another distribution channel. Having options of delivering merchandise from a warehouse or a store (or from anywhere else) potentially increases the distribution efficiency. Technology has come a long way in helping Amazon (and other retailers) manage these options, which benefits both the retailer and the customer.

Andrew Blatherwick
BrainTrust

This is more Amazon following and reacting to the market than leading. Several companies already offer this service. Amazon does have the scale to seriously damage the competition, so the smaller delivery-only companies will find it tough to compete if Amazon pushes this out nationally. Target and Walmart are, however, already there so no longer does Amazon have an open market to exploit.

Scott Norris
Guest

Solid point – Shipt started as a neutral third party and Target does not seem to be mining its transaction data to poach customers and product info. That’s the trust factor which is lacking with Amazon – if their logistics and warehousing wing was spun out, they’d immediately cut loose all that doubt in retailers’ and vendors’ minds.

Brandon Rael
BrainTrust

Amazon’s scale, reach, and capabilities are unparalleled, and the e-commerce giant has multiple supply chain distribution channels to choose from to fulfill the products as fast as possible. Third-party sellers have always been a part of Amazon’s supply chain fulfillment ecosystem. Consumers are conditioned to expect products in one day or two maximum, necessitating mitigating the last mile by distributing the products from the local mall.

The last mile is where the hearts and minds of customers are won. If you could combine a good experience, competitive pricing, and fast, reliable fulfillment capabilities, then Amazon is clearly in a win-win situation with the third-party sellers. The last mile and fulfillment battle between Amazon, Walmart, and Target continues.

Ryan Mathews
BrainTrust

Amazon’s test of mall-based delivery makes total sense to me. Malls are increasingly large, under-productive infrastructure, generally located near population clusters. Seems like the perfect place to put a warehouse specializing in on-demand delivery. Third-party retail locations (like 7-Eleven in Japan) have been a key part of Amazon’s strategy for a long time. There’s no reason why they shouldn’t increase it depending on local conditions.

Gary Sankary
BrainTrust

One more way for customers to receive product on their terms. Amazon is certainly positioned to stand this up faster than anyone else in the market. I think this makes a ton of sense and is likely to be successful.

Dave Wendland
BrainTrust

Malls are often well-located and definitely under-performing as retail destinations. Makes total sense to me. If anyone can crack the code and improve last-mile delivery from malls, it will be Amazon.

Liza Amlani
BrainTrust

Fulfillment from malls is nothing new and Amazon is doing what it does best – leveraging every channel/vendor they have to get the customer what they want as fast as possible.

The most interesting part of the strategy will be around real-time inventory management. The data will be the critical driver in delivering the right goods at the right time. This will be a great lesson for other brands and retailers on the importance of real-time inventory management and why upgrading their tech stack is critical.

Lee Peterson
BrainTrust

Reminds me of what Target’s doing; reducing last-mile shipping cost by doing it from the back rooms of stores. If specialty can pull this off with Amazon (lots to work on there), they might do the same. The only question is, what took so long? Developer interference? Amazon reluctance? Specialty retail ego or cost? This will be a good one to watch, for sure.

Liz Crawford
BrainTrust

Finally, a use for those under-producing malls. But Amazon gets its tentacles into more of American life. (Yikes!)

Richard J. George, Ph.D.
BrainTrust

Given the challenges currently facing malls, this makes great sense for Amazon as well as other online retailers. Amazon is constantly focusing on the final mile. We have seen in recent days that retailers like Walmart and Target have experienced supply side problems that have had a deleterious affect on their bottom lines. Amazon recognizes the impact of their challenges and is upping its game accordingly. Recall the advice of Frederick, the Great: “Do not attack the enemy when he adheres to the rules, but profit from his slightest mistakes without delay.”

Anil Patel
BrainTrust

Over the years, I’ve seen Amazon experiment with numerous initiatives to improve its fulfillment capabilities. They first test new products and services within their ecosystem before making them available to other retailers. Speaking of small retailers, they are incapable of developing these lightning-fast fulfillment capabilities on their own. They will undoubtedly use the services of Amazon, Walmart, or Target. However, these brands are notorious for stealing utilising sellers’ data to develop their own products, putting small retailers’ sales at risk.

Oliver Guy
BrainTrust

There has been speculation before that Amazon might buy a large department store type retailer — such as JC Penney — with a view to using these as both experience centres, and also as locations close to population centres to allow them to act as distribution centres. The efforts taking place right now could be to create a foundation or to test the logic behind buying such a retailer.

wpDiscuz
Braintrust
"One more way for customers to receive product on their terms. Amazon is certainly positioned to stand this up faster than anyone else in the market."
"This is one key way we can see retailers circumvent the supply chain crisis and delivery delays."
"This is more Amazon following and reacting to the market than leading."

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