[3/4/17] When will retailers learn that Amazon.com is not their friend? Over and over again, retailers think that by partnering with the e-commerce king, they’ll benefit through some sort of halo effect that will allow the tremendous traffic Amazon drives to trickle down to them and boost their own sales. Rarely, though, does it seem to ever happen, and Amazon continues to undermine its competition in the process.
The latest rival willing to embrace its enemy is the U.S. shopping mall, which is agreeing to install Amazon Lockers in their centers. Undoubtedly believing they’ll drive more traffic to the mall, they’re more than likely just undermining the very tenants who are paying their bills.
Locking up the market
Amazon Lockers were first launched in 2011, and today they’re found in major cities like Boston, Chicago, Los Angeles, and New York City. Amazon says there are hundreds of locations across the country and they’re always adding more. The concept behind them is smart: Since you’re not always going to be home when a package you ordered is delivered, sending it to a nearby location where only you can retrieve it is a good backup plan. You order an item online, receive a code to open a locker when the package is delivered, and go get it when you can.
And for businesses hosting the lockers, they can make sense, too. For example, an Amazon customer going to a local 7-Eleven store to retrieve his package might also pick up a Slurpee while he’s there. The potential to push incremental sales is what causes stores to partner with the e-commerce leader, not to mention earning a small rental fee for the locker space.
Yet what a lot of retailers end up finding out is all they’re really doing is boosting Amazon’s sales and undercutting their own.
Handing over the keys to the kingdom
A few years ago, office-supplies retailer Staples and electronics store RadioShack thought they could benefit from the e-tailer’s sales prowess. Although they were losing sales regularly to Amazon, they thought placing lockers in their stores could also result in the sale of an extra ream of paper or a few capacitors and potentiometers. Instead what they found was customers were simply buying their paper, ink cartridges, and electronic gadgets on Amazon and picking them up in their stores. After just a year, Staples and RadioShack abruptly ended the program.