Photograph by Spencer Platt/Getty Images
An Amazon delivery locker system at a Gristedes grocery store in New York
With two national retailers, Staples (SPLS) and RadioShack (RSH), pulling the plug on Amazon.com's (AMZN) Locker program, it's easy to wonder why either decided to experiment in the first place.
The incentive for any business hosting an Amazon locker isn't the monthly stipend the online retailer pays--"not even worth it," says the manager of a Manhattan copy shop--but the lure of higher store traffic given the online retailer's enormous sales volume and the gazillions of brown boxes sent across the nation each day.
Amazon has the lockers in nine large metro areas and touts the delivery option as a customer convenience for the many people who can't reliably get their online purchases at work or at home. For a bricks-and-mortar business, the idea is that people coming to collect their Amazon purchases will buy other stuff on their way out the door.
Raymond Bonhomme, general manager of CopyKat Printing on Manhattan's Upper East Side, which has had an Amazon locker since last winter, likens the retail gambit to the average American's trip to the supermarket. "You go in for one thing, and you end up getting something else," he says. True enough. But Amazon's ability to place future lockers may also come down to the mundane matter of competition: Coffee shops, parking garages, supermarkets, pharmacies, and copy-printing stores don't have Amazon as a rival, whereas a retailer such as Staples will quickly realize that Amazon sells virtually everything it does--and possibly cheaper.
That's one reason 7-Eleven, home of the microwave burrito and gargantuan Slurpee--neither sold fresh by Amazon--seems to like its lockers just fine. (You can purchase a $24.99, 7-Eleven-branded Slurpee Maker machine on the site, however.) Company spokeswoman Margaret Chabris says the program "looks promising" and that 7-Eleven may expand the number of stores with lockers. She declines to say how many 7-Eleven outlets have Amazon's lockers.
Staples ended its test with the lockers because it "didn't meet the criteria we set up together," a Staples executive said in an e-mail to Bloomberg News. "We evaluate many new products and services in our stores, and this was another example," company spokesman Mark Cautela said in a Sept. 20 e-mail, declining to comment further. A RadioShack spokeswoman says the company ended its locker trial earlier this year. "While Amazon is a great brand, their locker program didn't fit into RadioShack's move forward strategy," Merianne Roth says. A spokeswoman for Philz Coffee, a San Francisco-based chain, says the lockers have proven most popular at its Berkely and Palo Alto shops, where university students had requested lockers so they could more easily collect their Amazon goods.
Bonhomme says his copy shop's traffic has gradually picked up over the six months that the business has had a locker. The one downside has been his electricity bill--Amazon will need to pay CopyKat more to renew the deal because of the power it consumes, he says. "It's a gradual thing," Bonhomme says of the locker's effect on sales growth. "In the beginning it was less. But now more people know we have the box over here."
