Amazon has a major problem: the cost of deliveries. Its $99 Prime membership helps to defer some of this expense, but basically, delivery costs are a major weakness in Amazon’s model.
Amazon at some point will move to on-site pick-up. Buyers will drive to a nearby location to pick up their stuff. First, Amazon must find such sites. Maybe in strip malls. Maybe somewhere else. A recession would help Amazon: cheap locations to buy.
Wal-Mart will make this shift first.
Wal-Mart’s United Kingdom-based business ASDA just launched a fully-automated collection point for online grocery pickup for shoppers in the United Kingdom. It’s the first of its kind for Walmart ASDA given that it’s just a collection point for online orders that are picked at nearby stores and dropped off at the distribution hub within minutes of the customer’s desired pick up times.
Kieran Shanahan, vice president of grocery home shopping at Walmart Global eCommerce, demonstrated how the new pickup model works at a media session Wednesday (June 3) as part of Wal-Mart shareholders week in Bentonville.
He said shoppers start their orders online either by phone or desktop devices. They pay online and select a convenient pick up time. They notify ASDA by alert when they start toward the destination. They scan a QR code into the kiosk upon arrival and their order is dispensed with seconds. The frozen food is bagged separately and kept cold. Fresh food is bagged together at the correct temperatures.
Shanahan said the collection point is fully automated with robots that dispense the orders which are loaded by the drivers who bring the orders from the nearby stores. He said the launch was just a week ago and if the format proves successful it will be replicated.
Grocery pick up is being tested in five U.S. markets now by Wal-Mart and in all Sam’s Club. The team in San Bruno, Calif. – home of @WalmartLabs – has fashioned a more streamlined check-in process which Mobile Check. Eytan Daniyalzade of @WalmartLabs demonstrated this new feature. He said one thing they noticed with grocery pick-up was that the time spent waiting to retrieve their order could be shortened to improve the overall experience. . . .
“We are testing this now. When we nail this down on a service perspective it will be rolled out,” he said.
My time is too valuable to drive to pick up items anywhere. At 57.5 cents per mile — the IRS business deduction — I would prefer to pay a UPS fee. Either the item comes to my door or else I shop online elsewhere. But there may be millions of customers out there who will be happy to drive to a nearby location to pick up items. If so, Wal-Mart will find out long before Amazon does.