Seattle is one of the markets that Amazon currently offers local express delivery. Items eligible for local express delivery can be ordered as late as 1 pm for delivery that day. The parcel lockers allow Amazon to cut the delivery time on its shipments by reducing the number of locations where parcels need to be delivered. This should allow Amazon to expand its same day delivery service and possibly reduce shipment times for other shipments.
|7-11 Seattle, WA|
The picture shows a set of lockers taking up a small portion of the 7-11's floor space. 7-11 most likely is leasing the space to Amazon. The lease will likely cover all utilities and may include a requirements regarding how the area around the parcel locker is to be maintained Putting the parcel locker in a 7-11 helps reduce security concerns that would exist if the lockers were put outside which is common in other applications.
The close-up photographs show lockers of different sizes that could fit everything from a book to a small appliance.
|Amazon Parcel Locker|
Once the package is actually delivered, the customer receives an email notification along with a bar code to his smartphone and heads to the 7-Eleven. There he’ll stand in front of the locker system, which looks like the offspring between an ATM machine and a safety deposit box. The machine will scan the bar code on his handset to receive a PIN number. He’ll punch that PIN number and retrieve the package.
This is similar to how DHL describes the use of its Packstation: 1) register for the service; 2) choose a packstation; and 3) pick-up a parcel when notified by e-mail or text message. DHL now has 2,500 Packstations in urban, suburban and rural areas. Packstations have been installed in many small rural towns in Germany, with some of these towns as small as 7.000.
The difference between the Packstation and Amazon's kiosk is that Packstations are designed for shipping parcels as well. The credit card reader in the Packstation is missing as well as the slot for printed shipping labels. Also as most Packstations are located outside, they also include a canopy to allow use in inclement weather.
The front-on picture of the Amazon kiosk provides a better image of what are likely a touch-screen interface and the lockers of various sizes designed for small parcels.
|Amazon Parcel Locker|
The look of the Parcel locker clearly shows that it is a direct threat to the parcel business of the Postal Service. The size of the lockers fit smaller parcels. This includes parcels that United Parcel Service and FedEx deliver using the Postal Service's Parcel Select or Standard Parcel products, as well as shipments that fit into any of the Postal Service's Priority Mail flat rate boxes.
While Amazon is installing these parcel kiosks, the lack of branding raises some interesting questions about Amazon's long-term strategy for this significant capital investment.
- Are the kiosks only going to be available to only Amazon and Amazon marketplace sellers or will they be open to all shippers of parcels?
- If they are open to all shippers, what brand will Amazon chose to give it universal appeal?
- Could Amazon license the Postal Service brand to give it universal appeal?
- Who will have access to the lockers to put parcels in?
- Will Amazon have a single local carrier handle this or will the parcel lockers be open to UPS, FedEx, Postal Service and other parcel carriers?
- If they are open to all carriers, will Amazon charge a fee for their use, turning parcel pick-up into a profit center?
- Will Amazon open these parcels in all states or will its fight over sales taxes determine where it puts them?
- If the sales tax issue creates problem would Amazon operate these parcel lockers through a subsidiary with which it has an arms-length relationship?
|Post Danmark (Denmark)|
Investments of this type take a fairly long time to consider and an even longer time to implement. Amazon's decision to make this investment clearly indicates that it needed a different way to deliver to smaller and in particular smaller high-value parcels than what FedEx, United Parcel Service or the Postal Service now offer or appear to be likely to offer in the future.
Most importantly, the Postal Service's financial problems, legal and regulatory constraints, and Congressional meddling made it impossible for the Postal Service to provide the service that Amazon receives from the national post in every country where the national post has been corporatized or privatized. Furthermore, the seriousness of the Postal Service's financial condition has resulted in proposals that could add an additional day for drop-shipped parcels or eliminate delivery on Saturdays, options that make Amazon less competitive with stores like Walmart and Best-Buy that offer in-store pickup in an hour or less.