Amazon is dominating e-commerce and now brick-and-mortar, or at least making every attempt to. In order to do so the online giant will have to increase its retail footprint, by doing so, Amazon will be able to accomplish what all their customers demand, faster and cheaper delivery.
Delivery time and price is now the deciding factor by which customers use when online shopping, but trying to achieve an effective strategy that gives both Amazon and customers what they want is a tough goal to achieve. In order to get a better hold on delivery time and price Amazon has to seek out “last mile” distribution space, but with such a limited amount of space available in appealing locations Amazon has to find other solutions to their problem.
Instead of scouting out new warehouses or building new distribution centers Amazon has partnered with department stores like Kohl’s to handle Amazon returns. In return, Kohl’s can now sell Amazon devices within their stores, “this is a win-win for Kohl’s and Amazon,” says Gregory Healy, Senior Vice President of Supply Chain and Logistics consulting with Colliers International. Allowing Amazon customers the ability to come in store to Kohl’s to return their Amazon purchases adds foot traffic to stores that may have had difficulty bringing in new and old shoppers.
In addition to partnering with Kohl’s, Amazon has struck similar deals with 365 stores, which are grocer’s neighborhood-sized store by Whole Foods. Utilizing these locations back-store space’s for “last mile” e-commerce distribution operations will allow Amazon to cut back on the money associated with buying or building a new distribution location but it also allows them to establish a physical presence in already highly populated areas.
Playing catch-up with established retailers like Walmart has allowed Amazon the ability to find innovative ways to establish their presence and cater to their customers’ needs. For example, Amazon has been able to cater to the needs of their customers with “Amazon Now,” neighborhood storefronts with lockers for easy package pickup at and around many grocery stores and pharmacies. This and other future actions by Amazon will require an already established presence by other popular retailers and the space to operate them, which is why retailers and CRE investors should keep their eyes and ears open for any opportunities Amazon might have to to expand or establish themselves in a new city.
To learn more about Amazon and their recent need for retail space, check out http://www.nreionline.com/industrial/why-amazon-may-be-picking-more-retail-locations .