Amazon Adds Rite Aid Locations to Package Delivery Network
June 27 2019 - 3:30AM
Dow Jones News
By Sebastian Herrera
Amazon.com Inc. is adding another option for customers to get
packages from the online retailer: picking them up at Rite Aid
drugstores.
The digital marketplace said Thursday that shoppers will be able
to pick up purchases at specialized counters in more than 1,500
Rite Aid locations by the end of the year.
While financial terms of the arrangement weren't disclosed,
Amazon will gain access to a nationwide delivery system and Rite
Aid will potentially gain foot traffic and the sales that could
come with it.
The deal is Amazon's latest effort to expand last-mile delivery
options and to work with traditional bricks-and-mortar retailers
that have long been seen as its foes. Rite Aid, among the chains
that have been stung by competition from Amazon, now finds itself
in a position to benefit from the site's efforts to broaden the way
it gets packages into the hands of consumers, including placing
lockers inside apartment complexes and turning cars into personal
drop-off points.
Amazon, which will initially roll out its Rite Aid delivery
option in about 100 stores, plans to add other retailers to the
program. The online behemoth already has arrangements with
department store chain Kohl's Corp. and consumer-electronics
retailer Best Buy Co. In March, Kohl's said it would expand the
sale of Amazon products to about 200 stores following a trial
period in about 30 locations.
It has been working with Kohl's to sell Amazon products and
process returns. Last year, Amazon said it would join forces with
Best Buy to sell television sets powered by Amazon's Fire TV
operating system.
"We designed this program to be used by partners that are large
and small," said Patrick Supanc, director of Amazon Hub, which
includes the counter and locker programs. "You'll see this network
continue to expand."
Customers living near eligible stores will see in-store pickup
as an option when they check out and pay for their items on
Amazon.com. Shoppers will have two weeks to pick up their orders at
the location, where staff members will handle orders at counters
that feature Amazon branding. Amazon said tens of millions of items
will be available with the in-store pickup option, including
clothing, appliances and other best-sellers.
The service will be free. Customers won't be able to return
items to the Rite Aid locations.
Jocelyn Konrad, an executive at Rite Aid, said the company
expects the counters program "will create a stronger customer
experience for new and existing customers and drive increased foot
traffic to Rite Aid."
Rite Aid may welcome the boost. The drugstore chain's operating
loss widened to $667 million in the most recent fiscal year amid
sluggish sales. In March, the company replaced three of its top
executives, including the chief executive, months after
shareholders rejected a prospective merger with grocery chain
Albertsons Cos in a bid to stand out among competitors, from Amazon
to Walmart Inc.
That may be where Amazon and Rite Aid's interests really align.
The Rite Aid pickup program is another spoke in Amazon's delivery
strategy as it competes with Walmart and Target Corp. and other
big-box chains that have long offered in-store pickup for online
orders throughout their thousands of stores. Rite Aid stores have
the space to accommodate Amazon deliveries that some of its other
delivery partners might not have.
Amazon has thousands of self-service kiosks in 900 cities in the
U.S. at various convenience stories and at Whole Foods Market, a
chain it owns. Thousands of apartment complexes throughout the
country have installed lockers for residential package pickup, and
Amazon also drops off packages inside customers' homes, garages and
cars through its Key by Amazon operation. The so-called counter
program started in May at locations in the U.K. and Italy, and
Amazon tested the service at some Rite Aid stores in recent
months.
At Whole Foods, foot traffic during the first quarter for micro
visits, or in-store trips that take less than five minutes,
increased by about 10% from the same quarter a year ago, according
to marketing campaign firm inMarket. The firm linked the bump to
the presence of Amazon's lockers.
Write to Sebastian Herrera at Sebastian.Herrera@wsj.com
(END) Dow Jones Newswires
June 27, 2019 03:15 ET (07:15 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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