Amazon offering partners, including Best Buy, same-day local fulfillment
Amazon on Thursday announced a set of services, dubbed Amazon Local Selling, which offers in-store pickup and local delivery for businesses, according to a company press release.
Customers can purchase items from merchants and select same-day pickup at the seller's local store or opt for delivery in specific zip codes. Businesses can also offer add-on services like installation or product assembly.
Local Selling is currently available for national retailers and small- and medium-sized businesses, per the announcement.
Amazon is expanding the scope of its omnichannel services. This time it's helping ease a friction point that is becoming increasingly tense heading into the 2021 holiday season — delivery.
Local Selling is an additional sign of Amazon broadening its capacity when it comes to supply chain and logistics, similarly to what Walmart is constructing through selling its omnichannel capabilities to other businesses.
Amazon has been on a logistics-related expansion spree as it works to internally control its supply chain. The company spent $35 billion in capital expenditures in 2020, dwarfing Walmart's $10 billion. Amazon has directed much of its investments to establishing a footprint close to consumers. Now, 63% of the U.S. population lives within an hour drive of Amazon's fulfillment and redistribution centers.
Over half of all products purchased on Amazon are sold by third-party sellers, and the e-commerce giant is increasingly reliant on those merchants to bolster its revenue streams. In the company's second quarter this year, revenues from services for its third-party marketplace sellers rose 38% to $25.1 billion, and marketplace growth outpaced the company's own retail sales growth.
Amazon Local Selling may ease a friction point that is becoming increasingly tense heading into the 2021 holiday season — delivery. https://t.co/Yzl5DsFuXh
— Retail Dive (@RetailDive) October 22, 2021
Additionally, consumers may be primed to pick up items at local stores due to pandemic-related shopping patterns. Last-mile delivery, and the cost it incurs, has long been a retail issue. But, last year saw a significant increase of retailers of all sizes offering BOPIS services, cutting back on the time and expense of getting goods in the hands of consumers. That trend was in part fueled by concerns regarding timely holiday fulfillment.
Those delivery concerns are prevalent this year as well, along with widespread supply chain bottlenecks as consumer demand surges. UPS CEO Carol Tomé estimated that during this year's peak season, volume would exceed capacity by 5 million parcels each day.
The services may also give Amazon third-party sellers additional options when met with costly delivery expenses. This year, both UPS and FedEx announced surcharges ahead of the peak shipping season, and smaller businesses typically don't have clout or scale to negotiate with these services on price.
Third-party sellers on the Amazon site, including some major chains, can now fulfill online orders for local customers in designated stores.
Amazon is introducing Amazon Local Selling, a new set of services that enables local, regional, and national retailers operating on Amazon Marketplace to offer both in-store pickup and fast delivery to local customers. The e-tail giant is collaborating with retailers including Best Buy, Sears Hometown Store, Mattress Warehouse, 4 Wheel Parts, Electronic Express, Appliance Connection, Beach Camera, Mavis Discount Tire, Adorama, DataVision, Exclusive Furniture, World Wide Stereo, MODIA, Focus Camera, and others, to enable customers to select in-store pickup for Marketplace purchases and receive a notification when it is ready that day, or select fast delivery service.
Sellers can provide regional offers across all product categories, as well as offer products they could not sell before, such as large or fragile items. In addition, third-party Amazon sellers can offer customers add-on services, such as product assembly or installation, for the products they deliver.
Amazon has also released another set of tools aimed at making it easier for U.S.-based third-party sellers to offer their products in its 21 stores worldwide, including a global customer service/support solution, an artificial intelligence (AI)-based product guidance tool, global inventory viewer, and a service for integrated global listings.
“Local Selling presents enormous opportunities to a large number of sellers who want to bring more product selection to their Amazon business, enabling many to expand their multichannel offerings by integrating their physical stores and delivery capabilities with their digital operations,” said Jim Adkins, VP of recreational and vocational categories at Amazon. “Our research shows that many customers will opt for local pickup when given the choice. This new capability is an exciting way to help sellers reach and delight more customers with great products and convenience.”
“Amazon has been the foundation of our national online selling for years. Now we are bridging our online business with our in-person experience, which means more customers are getting to know our brand and full range of services,” said Bear Hendley, manager of Walt’s Television, a Tempe, Ariz.-based small retailer which participated in a trial of Amazon Local Selling. “New local customers are finding us and giving us very positive feedback on the convenience of buying online and picking up at one of our locations. We’ve seen a significant increase in local sales, and we’re excited about the ability to offer installation and repair services to Amazon customers.”
During 2020, Amazon says it invested more than $18 billion in logistics, tools, services, programs, and teams to help third-party sellers get started, build their brands, and leverage Amazon’s scale to reach more customers. According to Amazon, its third-party sellers have created an estimated 1.8 million U.S. jobs managing, operating, and supporting their Amazon-related businesses.
Third-party Amazon sellers who are interested in joining Amazon Local Selling can apply at sell.amazon.com/local as the program expands during 2021 and 2022.
