A previous post on Amazon’s expansion of its parcel locker network understated its investment in this delivery technology in New York City. Amazon now has 30 parcel lockers in New York City and not the 20 that were reported last month. As the chart below shows, Amazon has 5 lockers in Brooklyn, 7 in Queens and 18 lockers in Manhattan including one on Roosevelt Island. Combined with the 10 Amazon has in and around Seattle, WA and the 7 in Northern Virginia, Amazon is now far ahead of the Postal Service in implementing goPost.
Parcel Lockers Create Proprietary Address and a Competitive Advantage for Amazon
Amazon’s network of parcel lockers creates a set of proprietary addresses that are accessible only to Amazon and retailers that use fulfillment by Amazon. The development of a proprietary set of addresses, and more than likely the delivery infrastructure to delivery parcels to the parcel locker should allow Amazon to cut its delivery costs to customers who chose to use them. Customers that use parcel lockers as their address are unlikely to add extra delivery costs for amazon for repeated delivery attempts as well as reducing the per-order delivery cost by allowing the delivery carrier to make many deliveries to a single location. The combination of a proprietary address and lower delivery costs will increase Amazon’s competitive threat to brick and mortar retailers and online retailers that do not use fulfillment by Amazon. In addition, Amazon will likely use a local delivery courier to deliver to parcel lockers thereby cutting the volume of Amazon’s business that the three largest parcel carriers, FedEx, United Parcel Service and the U.S. Postal Service, now handle.
For more information about Proprietary Addresses check out: Examples of Proprietary Address at Amazon and the USPS: It’s Not Just the Format
Parcel Lockers Make it Easier to Offer a “Real” Next Day Delivery Service
Parcel lockers provide Amazon with a better opportunity to offer more viable same day delivery option in New York City than it now offers. Amazon has offered same day delivery in New York City since 2009 but it appears its original plans were too ambitious as since the announcement it moved the cut-off time for orders from 10:00 a.m. to 8:30 a.m. Cities with nearby warehouses including Baltimore, Boston, Las Vegas, Philadelphia, Seattle, and Washington, DC have order cut off times at 10:00 or later with Amazon offering same-day delivery in Seattle until 12:00 noon. In order for same-day delivery in New York City to be a real service, Amazon needs to have the order cut-off time at 10:00 a.m. or later.
Even With Parcel Lockers, “Real” Same Day Delivery Not Coming to the NYC Metro Soon
A month ago this blog noted that Amazon’s opening of a warehouse in New Jersey will allow it to expand its next day offering the New York metro area. The expansion of parcel lockers further makes same day delivery service easier by allowing the delivery carrier more time to make deliveries within the short window that same day delivery permits. Given that the sites for the warehouses had not been chosen as of May, 2012 it is unlikely that Amazon will be able to improve its same day delivery service for at least another year or two.