Photo credit: amazon.com

 

August 11, 2017

 

While Amazon is continually expanding its range of virtual services, unlike many other e-tailers, it has understood that the "make or break" will be in the last mile.

Supporting this view, Amazon has announced, with little fanfare, a new service called "The Hub"; parcel lockers installed in residential buildings, so that tenants can pick up parcels at times which are convenient for them.

"The Hub" is a development of a service that Amazon has been running for some time now, called Amazon Lockers; parcel delivery lockers that are located in public places and retailers to make pick up and delivery of Amazon parcels more convenient and efficient.

What is important here is that the service is carrier agnostic and will be available for parcels which are not fulfilled by Amazon. In their words: “You can pick up any package, from any sender, any retailer, at any time,”

Now this may well send panic waves to the likes of UPS, DHL or FedEx; is this the first step towards creating a "stand alone" Amazon parcel delivery business, which will compete directly with them?

After all, Amazon has already experienced success in their "in house" last mile delivery operations in places such as the UK, US, India, France and Germany.

Well, let's start by understanding why Amazon is working with Lockers at all. I believe that there are a few reasons, the key ones being that:

  • a great customer experience in the Last Mile requires both "to door" and "access point" delivery options
  • locker delivery is cost efficient as the courier is delivering 20+ parcels at a time, instead of a similar number of individual door step deliveries
  • most lockers are open for delivery 24/7..and will always accept the parcel (unless, of course, they are full)
  • lockers are proving to be highly regarded amongst users, where they are properly used

So what's the chance that Amazon has really decided that the (virtual) world is not enough, and plan to set up an independent Amazon Parcel Delivery operation?

As part of Amazon's Last Mile start-up team, I know where I would put my money...Any views?