Will Amazon Lockers change the face of the high street?

13th August 2012

According to Wired, the company is taking an unusual approach to finding its place on the high street using a system of PO boxes placed in late-opening stores. These imaginatively named Amazon Lockers aim to liberate customers from the burden having to wait in for their parcels without the company having to invest in bricks and mortar.

Marcus Wohlsen writes that the model, which is based on one used by America's Port Authority, works as follows:

"Amazon sends you an email with a pickup code, which you enter on a touchscreen to open the door of the locker containing your package. You have three days from the delivery date to pick it up."

A number of customers have already begun lauding the move as Amazon taking further bites out an already retail sector that has suffered some major casualties. Commenting on the story on Reddit, berlinbrown said "Amazon is just taking a tomahawk and just beating the c*** out of these brick mortar stores. And despite Amazon and other shops coming up with a new idea every month these brick and mortar idiots never change their business model".

So is this the last nail in the coffin for the high street?

The rise and rise of Amazon has certainly sent a number of businesses into a tail spin. Competitors such as Woolworths and Zavvi (formerly Virgin Megastore) have been brushed aside while HMV and independent book stores are also facing serious difficulties.

On the principle that price is the key differentiator the victory would seem all but assured. Yet Amazon's decision to move into physical stores, albeit so far only in post-box form, suggests that the online-only model has its own set of limitations.

Waiting in for parcels is just one demonstration of how the experience of online shopping must eventually bump up against the awkwardness of transporting goods. Providing a seamless system of the digital feeding into the physical was always the Elysium for online retailers but as yet it has remained elusive.

Some companies, however, have been making strides in this area. At WalMart more than half of purchases made online are picked up in store where customers can pay in cash, according to the New York Times. Not only is this convenient for them but it also offers the shop the chance to lure them into additional impulse buys while they are on the premises.

Although Amazon's move for a more limited physical presence may be cost effective, it also suffers from limitations. Going some of the way towards establishing itself on the high street but doing so in the back room of newsagents may not do much for the brand over the long term.

Furthermore the barrier to entry for competitors doesn't appear to be overly high in this case. What would a retailer gain by only hosting Amazon Lockers rather than a range of different brands?

This model may offer a short term fix for the company's delivery problems, but it is unlikely to prove the long term solution to the digital/physical debate.

 

More on Mindful Money:

The changing face of retail

Amazon on fire

M&S Bank – Brand diversification too far?

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