In this age of instant gratification, eCommerce retailers like Amazon face a dilemma. A consumer can make a purchase in seconds with a few clicks of a mouse or taps on a screen—it doesn’t get much more instant than that. Then, though, customers must wait for days or weeks before they get their hands on the purchased item.
It is arguably the last advantage brick-and-mortar stores have over the eCommerce industry: when customers make a purchase at a physical store, they can walk out with the item(s) in hand.
So, Amazon is making a continuous effort to shorten delivery times—to close the gap between the “buy now” click and the unboxing of the goods. In October 2014, the company launched a same-day pickup service which allowed customers to pickup items ordered before 11:45 am by 4:00 pm the same day, at one of a number of locations throughout the nation and around the globe.
A few months later, the company rolled out PrimeNow, through which Amazon Prime customers in select locations can get household essentials like paper towels and shampoo, small items like books and toys, and even big-screen televisions delivered to their doors in two hours at no added cost, and in one hour for an additional $7.99. Amazon even partnered with restaurants and grocery stores in certain markets to offer delivery from those locations.
Tuesday, the giant announced another leap forward, Reuters reports—Amazon Instant Pickup. The service lets customers pick up their orders within two minutes. It is currently operational only in Berkeley, CA and Los Angeles, CA, per Amazon’s website. According to Reuters, the program will expand to college campuses in Columbus, OH; College Park, MD; and Atlanta, GA in the near future, and to additional locations by the end of the year.
When a buyer places an Instant Pickup order, an Amazon employee culls the purchased item from the shelves and puts it in a locker, which is sealed using a unique bar code. When the customer arrives at the pickup location, they can scan the barcode, open the locker, and retrieve the item.
Amazon considered automating the fulfillment process, Reuters says, decided against doing so at this time. Automation could occur down the road, though.
The service will cater toward impulse buyers: the majority of the several hundred different products available at Instant Pickup locations will be high-volume, quick-purchase items like phone chargers, snacks, and drinks. The last two offerings will make Instant Pickup an alternative to vending machines.
“I want to buy a can of coke because I’m thirsty,” said Ripley MacDonald, Amazon’s director of student programs, per Reuters. “There’s no chance I’m going to order that on Amazon.com and wait however long it’s going to take for that to ship to me.”
That is, MacDonald says, until Instant Pickup came along.
However, Forrester analyst Amanda Chakravarty told Reuters that while the new service will be convenient for some items, vending machines will not disappear anytime soon. “[Instant Pickup] might work for some electronic gadgets that are not commonly available at vending machines,” she said. “Two minutes is too long to wait for a soda can.”
But, many analysts expect Amazon to build Instant Pickup into something beyond a high-tech vending machine: a full grocery store.
“This is a natural extension of [Amazon’s] larger push into the grocery space,” Morningstar analyst R.J. Hottovy told Reuters.
Amazon acquired Whole Foods in a $13.7 billion deal in June. TechCrunch notes that Amazon could make Instant Pickup available at some or all of Whole Foods’ 467 physical locations. Customers could build a grocery cart on their way to the store and pick up their food when they got there. Moreover, the Whole Foods stores have plenty of space for inventory, so Amazon could make them Instant Pickup locations for a host of products beyond food.
In eliminating shipping costs, Instant Pickup may allow Amazon to reduce prices, Reuters points out.
Featured image via Flickr/Robert Scoble