Amazon Ends Instant Pickup Service

Last year, Amazon launched Instant Pickup at five locations on US college campuses where it was already operating regular Pickup Locations. The service allowed customers to order certain items and then retrieve them a short time later from nearby lockers, somewhat akin to a vending machine that you could order online from and then go pickup yourself. Amazon made available items like phone chargers, snacks, and drinks, which were placed in the lockers by an Amazon staffer after the order was placed.

“I want to buy a can of coke because I’m thirsty,” Ripley MacDonald, Amazon’s director of student programs, said at the time. “There’s no chance I’m going to order that on Amazon.com and wait however long it’s going to take for that to ship to me.”

Today, Amazon said it has ended the program. Its regular Pickup Locations efforts will continue at these locations.

Instant Pickup was an interesting experiment for Amazon to test out stocking items that fit the impulse purchase scenario at its Pickup Locations.

Since last year, Amazon has expanded its retail efforts substantially, through the growth of Amazon Books, the launch of Amazon Go stores in Seattle and Chicago, and the launch of the first Amazon 4-star store in New York City.

Is Amazon Building Multiple Four-Story Fulfillment Centers in the US Right Now?

Traditionally, e-commerce warehouses have taken the format of massive one-story buildings, due to the nature of the logistical work required to sort, stock, pick, and ship — with thousands of people, robots, and vehicles making the system work.

That’s why we were intrigued to read reports of Amazon reportedly (although nothing has been confirmed) building multiple four-story fulfillment centers currently — in Oak Creek, Wisconson (near Milwaukee), Garner, North Carolina (near Raleigh), Bakersfield, California (somewhat near Los Angeles), and Brooklyn Park, Minnesota (near Minneapolis). Per Bisnow,

Though no centers have been publicly confirmed as meant for Amazon, reporting across the country has connected the tech company to four nearly identical plans, each for a four-story warehouse totaling around 2.5M SF…

Modern distribution centers tend to require such high clearances and so much truck activity that multistory buildings have not made financial sense in the past, but in urban areas like Atlanta and New York where space is so tough to come by and access to the population center is so important, developers have started to make it work.

Amazon’s investment in logistics provides it a substantial competitive advantage over e-commerce competitors. If Amazon is able to build four-story warehouses in areas that only allow for buildings with smaller footprints than what would be needed for a traditional one-story FC of that size, that advantage is likely going to get bigger.

SOUQ Launches Amazon Global Store, Opens 1M Amazon.com Items to Saudi Arabia

Amazon has announced that is is launching an Amazon Global Store on SOUQ, its e-commerce site and platform serving customers in the Middle East. Per Amazon:

Amazon Global Store on SOUQ offers a completely localized and effortless experience for customers in the KSA: Customers can shop in Arabic or English and pay in SAR using their local credit cards or cash on delivery (COD). Customers will see prices in SAR inclusive of import fee deposits at checkout (where applicable) – without any unexpected fees added later. With Amazon Global Store’s hassle-free customs clearance, purchases are delivered right to customers’ door steps. SOUQ offers two convenient delivery options for Amazon Global Store, from click to delivery: priority (2-5 business days) and standard (6-10 business days).

Let’s take a look at how the integration looks. First, here’s how the Amazon Global Store is promoted on the SOUQ home page (it’s pretty prominent — just below the fold):

Now, let’s compare the listings of an item for sale on Amazon.com in the US with the same listing in AGS on SOUQ.

 

They’re remarkably similar, with real-time inventory data syndicated to SOUQ as well.

The logistical operation here is impressive. In addition, Amazon is offering, “Local Customer Service and hassle free returns within 30 days.”

Amazon is doing a lot of work behind the scenes to make international e-commerce simpler for merchants and customers. That is going to pay off in the long run.

Large Restaurant Brands and the Future of Amazon Restaurants

Amazon Restaurants, which is live in 20 cities as of today, is looking to accelerate the growth of its restaurant supplier network by partnering with the largest restaurant brands in America.

“National restaurants play an integral role in the Amazon Restaurant Delivery business strategy,” according to a current job posting for a business development position. The listing goes on: “Amazon Restaurants is seeking an entrepreneurial, results-oriented Technical Business Development person to lead negotiations with the largest 200 restaurant brands such as Applebee’s, P.F., Chang’s, Red Robin and point of sale (POS) brands such as NCR.”

A few locations of national restaurant brands such as Subway, Firehouse Subs, Five Guys, Applebee’s, and Which Wich are already on the Amazon Restaurants platform. However, based on our review of restaurants available in each city currently, the large majority are local brands.

Last summer, Amazon announced the launch of Amazon Pay Places, a service that enables select QSRs running the Clover POS to accept takeout orders via the Amazon app. Amazon says it charges restaurants, “10% of each order that’s processed through the Amazon App. This cost covers marketing and payment processing, including fraud protection. Amazon’s marketing may include a variety of paid social media, email, and in-app marketing.” We do not yet know what the specific pricing model is for Amazon Restaurants partners.

Restaurant food delivery is a highly competitive landscape, with a slew of startups operating in the space including DoorDash, Grubhub, Eat24, Caviar, Postmates, and more – in addition of course to Uber Eats (which Uber CEO Dara Khosrowshahi said in May has a $6 billion bookings run rate).

As former Uber growth leader and current Andreessen Horowitz General Partner Andrew Chen articulated recently, the nature of transportation marketplace businesses favors platforms that can keep transportation suppliers continuously in demand throughout the day. While the nature of Amazon’s local transportation demands differ from Uber’s, it does seem generally better equipped to keep more couriers busy more often than the vertical food delivery platforms, and thus to be more economically viable, in the long run.

One potential long-term play for Amazon, given its large volume of both customer relations and inventory of perishable food in its Fresh warehouses and Whole Foods stores, is to enter the virtual restaurant business. A “virtual restaurant” is a restaurant that doesn’t exist for physical customers, but rather appears as a restaurant brand in your food delivery app only. Fulfillment can occur in a space shared with other “virtual restaurants,” perhaps also in a lower-rent location than many traditional retail establishments. Delivery logistics are thus also simplified since the number of food source locations is potentially reduced. (In some cases, restaurant entrepreneurs are creating virtual restaurants inside their physical ones in an effort to grow.)

Another potential option for Amazon long-term is to create “private label” restaurant brands with fulfillment provided by existing third party (physical or virtual) restaurants, somewhat analogous to how it has created private label products in many hardline and softline retail categories. (Given how much Amazon has already aggregated demand, it has more options than most when evaluating how to go about aggregating supply.) We have seen no evidence of Amazon’s intent to pursue either of these strategies yet, but Amazon is at least getting more sophisticated in some aspects of retail food preparation through offerings in its Amazon Go and Whole Foods stores.

For now, Amazon is racing all of its competitors to bring on as many restaurants as it can to the platform, and national restaurant brands are a fast way to gain footprint.